Political stability key to offshore wind, panelists say

newsletter-112-2NEW BEDFORD — Leaders in the American and German offshore wind industries emphasized the importance of a secure political climate in making New Bedford’s offshore wind aspirations a reality during a panel discussion at the Whaling Museum on Tuesday morning.
Multiple representatives of the German Port of Bremerhaven told an audience of about 80 that support of offshore wind in all political parties was crucial to the country’s development of the industry.
“Offshore wind starts with believers,” explained Andreas Welbrock, who sits on the board of BLG, Bremerhaven’s port operation company.
Jens Eckhoff, president of the German Offshore Foundation, said that in Germany “we never had any political fight over this topic.”
“That’s the main reason we were successful,” he said.
Eckhoff said he is a member of the conservative political party in Germany, but that his party did not resist the installation of offshore wind because of its potential for job creation.
Financing offshore wind development requires a large up-front investment because of the difficulties of deploying hundreds of turbines at once. Construction of an offshore wind farm can take up to eight years, so investors have to wait a considerable period of time to see a return.
Eckhoff said the bipartisan support for offshore wind was crucial to the success of the industry because the German government was able to create policy that provides incentives for businesses to invest in offshore wind.
“Investors want a guarantee that the political climate will not change between when they invest and when they get a return,” he said.
In the United States, it’s not so simple.
Here, a federal investment tax credit for renewable energy is set to expire at the end of 2013. With that program, investors can receive a cash grant covering up to 30 percent of their investment.
Still, that concept has been controversial among Republicans, who say it gives renewable energy unfair advantages on what is supposed to be a free market.
Last year, when Congress was nearing the fiscal cliff, one of the obstacles to raising the debt ceiling was that Republicans were resistant to extending the investment tax credit.
Cape Wind Spokesman Mark Rodgers put it another way, asking, “Do you have the Tea Party in Germany?”
“In the current United States political context, that’s been the most vocally anti-renewable energy block, and it’s been a big challenge and remains a big challenge,” he said.
To avoid an annual battle over the tax credit, U.S. Rep. William Keating, D-Mass., is proposing that the next investment tax credit extension expire not on a particular date, but once there are 3,000 megawatts of offshore wind energy in the United States. (For reference, CapeWind is a 455 megawatt project).
“We need to make sure our investors know that their return is going to be there,” Keating said.
Bill White, senior director of offshore wind development at the Massachusetts Clean Energy Center, called Keating’s proposed change to the tax credit “crucial for this industry to move forward.”
Rodgers of CapeWind agreed.
“An arbitrary expiration date makes it more difficult to obtain our financing objectives,” he said. “Shifting that to a 3,000 megawatt benchmark, that’s a number that would really launch an industry in the United States.”
Source: The Standard Times
By Ariel Wittenberg
November 06, 2013 12:30 AM

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