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Blustery states boost wind power over gas with U.S. tax break
Credit: By Jim Efstathiou Jr., Bloomberg, www.bloomberg.com 8 June 2011 ~~
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Translate: FROM English | TO English
A U.S. tax break has helped wind power stem the growth of natural gas as a power-plant fuel in blustery states.
The natural-gas share of electricity generation increased by less than 1 percent over the past decade in states such as North Dakota that have strong winds to drive turbines, a Bloomberg Government Study found. It grew 17 percent in states such as Florida, where there was no wind to compete with gas.
A production tax credit valued at 2.2 cents for every kilowatt-hour of wind energy has encouraged the growth of the alternative energy source. Natural gas accounted for 16 percent of U.S. electricity generation in 2000 and grew to 24 percent in 2010, according to the study.
“With the benefit of the federal and state subsidies, wind-generated electricity has tended to push out the more expensive sources of electricity generation,” Paul Hughes, a senior economic analyst for Bloomberg Government, wrote in the study. “In many cases that displaced energy has been generated from natural gas.”
In high and medium-wind states, coal generation fell by 5.5 percent and 1.9 percent, compared with decreases of 9.1 percent in states where less than 1 percent of electricity is generated by wind and 11.1 percent in those where none is. Coal generation produces more carbon emissions linked to climate change than natural gas, while wind generation is emission-free.
Renewable Requirements
Twenty-nine states, the District of Columbia and Puerto Rico set requirements for the use of renewable energy such as wind, solar and geothermal sources, according to data compiled by North Carolina State University with funding by the Energy Department.
The federal tax credit, aimed at encouraging the development of renewable power, was created in 1992 and extended in one and two-year intervals, according to the American Wind Energy Association, a Washington-based lobby group. The credit applies to the first decade of production and is set to expire at the end of next year.
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