Danish wind turbine maker announces mass layoffs, cites wind tax credit ‘uncertainty’
A Danish wind turbine maker has announced more than 800 layoffs of its North American workforce so far this year due to the uncertainty surrounding the extension of wind tax credits.
“The U.S. wind industry has slowed, largely due to the uncertainty surrounding the Federal Production Tax Credit extension,” said Martha Wyrsch, head of Vestas-American Wind Technology, Inc.
Orders were down 24 percent during the first half of this year compared to the same time period last year, and the company has previously said it could lay off another 800 employees in both Canada and the U.S. if the tax credit is allowed to expire.
Reuters reports that Vestas said it would “stop non-profitable projects as it battles worsening prospects” and begin to focus more on emerging markets to jumpstart growth and “offset cooling demand in mature Europe and United States markets.”
In September, German wind energy manufacturer Siemens announced it was cutting 615 workers in the US due to uncertainty over the wind tax credit extension, low-priced natural gas, and slow growing electricity demand.
The federal Wind Production Tax Credit was enacted in 1992 get the wind industry off the ground. Congress has renewed the credit seven times and let it expire three times since it was enacted, and now lawmakers on both sides of the aisle are debating the merits of another extension as the PTC is set to expire at the end of this year.
“Wind energy significantly reduces consumers’ electric bills by displacing fuel use at the most expensive power plants, even if some competitors now attempt to argue otherwise because they’ve invested in more expensive forms of power,” Peter Kelley, vice president of public affairs at the American Wind Energy Association, a wind industry group, wrote in an email to The Daily Caller News Foundation.
“But we aren’t finished with the job,” Kelley added. “All forms of energy have their incentives, and most of the rest have been permanent for up to 90 years; we need stable policies to allow this new American energy source and new manufacturing sector to continue to grow.”
Democratic Senate Majority Leader Harry Reid of Nevada said he was “very confident” that the tax credit extension would pass his chamber as several key Republicans sponsored legislation extending the tax credit, including Chuck Grassley of Iowa, Scott Brown of Massachusetts, and Dean Heller of Nevada.
“At this critical time for our economy we should not be contemplating a crippling tax increase on an emerging energy industry that is now adding new manufacturing jobs,” writes Grassley in Politico.
“With low taxes, wind power can deliver tremendous benefits — in jobs, investment and clean energy — to Iowa and the nation,” he added.
Republicans in the House, including Rep. Kristi Noem of South Dakota and Rep. Rick Berg of North, have written to House Republican leadership urging support for the Wind PTC extension.
The New York Times reports that more than 81 percent of installed U.S. wind capacity is located Republican-held congressional districts.
President Obama also favors extending the wind tax credit.
“You can expect to see this will be a top priority for the administration,” a senior White House official, speaking on condition of anonymity, told reporters.
Republican presidential candidate Mitt Romney has come out against an extension as have other key Republicans in the House and Senate.
“[Romney] will allow the wind credit to expire, end the stimulus boondoggles, and create a level playing field on which all sources of energy can compete on their merits,” said Shawn McCoy, a spokesman for Romney’s Iowa campaign.
Last month, 47 Republicans in the House, including Rep. Mike Pompeo of Kansas, wrote a letter to Speaker Boehner asking him to allow the wind PTC to expire.
“We believe that the Solyndra scandal has demonstrated that it is time for the federal government to stop picking winners and losers in the energy marketplace,” according to the letter. “Twenty years of subsidizing wind is more than enough.”
“Our nation can simply no longer afford to pick winners and losers in the energy marketplace,” the letter continues. “The PTC should expire at the end of the year under current law.”
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