Recently, General Electric indicated that it has 400-500 wind turbines, valued at more than $1 billion, ready for projects that are on hold for the moment. These turbine would be released to market if the production tax credit (PTC) clarifications on continuous construction are provided soon by the U.S. Treasury. This is just one market of the wind energy industry experiencing frustration and confusion by the wait for PTC clarification. Other markets include construction, engineering, testing agencies, banking and “heavy metal” suppliers, just to name a few.
Costs associated with turbines is only a fraction of total development costs when it comes to wind power projects. And as can be seen by the GE announcement, those at-risk dollars can add up to some very serious amounts. It’s also important to note that some of these projects are backed by some of America’s biggest financial lenders. I will let someone else speak to the potential consequences of not launching these projects, but one doesn’t have to stretch their imagination very far to guess at what those consequences may be.
The market has already seen projects be put on hold indefinitely due to the poor clarification efforts on the PTC guidelines. Let’s also not forget that the qualification period expired last year. Developers, manufacturers and professional service firms are doing their best to predict the outcome of the final clarifications. We do have to remember, however, that a project isn’t truly qualified until it gets audited, which happens at final completion of the project. The reward is there as long as you can stomach the risk in the renewable market.