Production Tax Credit shows signs of life in U.S. Congress

The U.S. Senate Committee on Finance has passed a bill that would extend the Renewable Energy Production Tax Credit (PTC) through the end of 2015.

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The U.S. Renewable Energy Production Tax Credit (PTC), which was repsonsible for spurring much of the wind energy development in the U.S. over the last decade, expired at the end of 2013, but is showing signs of legislative life and might return later in 2014.

The U.S. Senate Committee on Finance passed on April 3 the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act, which includes a number of modifications to the U.S. tax code, including the re-implementation of the Renewable Energy PTC. The EXPIRE Act still needs to be voted on by the full Senate, and then must pass the House of Representatives, before it can be sent President Obama for final authorization. Legislative experts predict, however, that the EXPIRE Act will not come up for full-Senate vote until after mid-term elections in November 2014.

The EXPIRE Act would retroactively extend the Rewable Energy PTC from Jan. 1, 2014 to Dec. 31, 2015, with the same incentives as under the now-expired PTC: $0.23/kWh of credit, available for electricity produced during the first 10 years after a turbine has been placed in service. 

The U.S. Energy Information Administration (EIA) reported in 2013 that by 2018, the cost of onshore wind energy production will make the resource competitive with many petroleum-based electricity generation plants, including coal and some natural gas. The EIA estimates that the levelized cost of new generation resources by 2018 will be:

  • Conventional coal: $100.10/MW-hr
  • Advanced coal: $123.00/MW-hr
  • Natural gas, conventional combined cycle: $67.10/MW-hr
  • Natural gas, advanced combined cycle: $65.6/MW-hr
  • Natural gas, advanced, with carbon capture: $93.40/MW-hr
  • Advanced nuclear: $108.40/MW-hr
  • Onshore wind: $86.60/MW-hr