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AWEA 2016: ‘We must be humble and paranoid’ 

Credit:  26 May 2016 by Ros Davidson and Diane Bailey | Windpower Monthly | www.windpowermonthly.com ~~

The US wind sector needs to be both humble and paranoid as it navigates through the five-year production tax credit (PTC) phase out and prepares to compete without subsidies.

So said GE North America wind general manager Andy Holt at AWEA Windpower 2016.

The opening session on day two of AWEA Windpower 2016 in New Orleans featured the large wind turbine manufacturers forum, with speakers from Gamesa, GE, Goldwind Americas, Nordex/Acciona Windpower, Siemens and Vestas.

The extension of the production tax credit (PTC) and its eventual phase out was a major theme of the discussion.

“We need to be humble through the long PTC runway we have, and we need to be paranoid that solar is going to steal our lunch,” said Holt.

Turbine makers active in the US expect a rush of orders at the end of this year as developers position themselves to take advantage of their last chance to get the full-value PTC.

“It will be a challenge,” said Mike Revak of Siemens.

Developers need to start construction this year to get the $0.23/MWh PTC, and can do that by locking in turbine orders.

They will then have four-to-five years to bring a project online under new guidance from the IRS.

“If you qualify now, that sees you up through 2020,” added Revak.

The US market will provide an unusual amount of certainty for the next four years.

“We’ve got a runway, we’ve got some volume. We’ve got stability. It’s what we asked for,” said Vestas senior vice president David Hardy.

Even so, a slight ‘valley of death’ could mark the post-PTC era according to Ed Zaelke, of law firm Akin Gump and a former chair of AWEA’s board of directors. “We’re continuing to be addicted to our PTC drug,” he noted.

Keeping up with the front-loaded demand – because the PTC will diminish over the next four years – will be key in the market until 2020, said panellists.

“[Such a market] can be challenging for an OEM,” conceded Scott Baron of Nordex/Acciona Windpower. “We need stability, and to manage our supply chain.”

Some of the levelised cost of energy gains made by the wind industry in recent years is the result of low commodity prices, leaving it competitively vulnerable should they start rise.

“If steel prices go up significantly, that’s going to have a lot more effect on wind than solar,” added Vestas’ Hardy.

Source:  26 May 2016 by Ros Davidson and Diane Bailey | Windpower Monthly | www.windpowermonthly.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial educational effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

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