Environmental Engineering Reference
In-Depth Information
report found that impacts of wind farms on birds and other wildlife varied by
region and by species, and the lack of comprehensive data on bird and bat
fatalities from wind turbines make it difficult to make national assessments of the
impact of wind turbines on wildlife.[25] In addition, wind energy may face
community opposition because it affects visual aesthetics and landscapes. For
example, the first proposed U.S. offshore wind project, consisting of 130 wind
turbines off the coast of Massachusetts, ran into opposition from local residents
and organizations who oppose the appearance of wind turbines in Nantucket
Sound.
Another challenge for wind energy is that the federal production tax credit—
the primary federal financial incentive to stimulate the deployment of renewable
energy systems—periodically must be legislatively extended, creating uncertainty
among investors whether the tax credit will be extended. The federal production
tax credit, initially established by the Energy Policy Act of 1992 for a limited
duration, had expired before being renewed by subsequent legislation in 1999,
2001, and 2003. The Energy Policy Act of 2005 extended it an additional 2 years,
until January 1, 2008. According to DOE officials and industry representatives,
the production tax credit has helped to offset the significant higher capital costs
per unit of generating capacity needed to start up wind power projects, compared
with projects for fossil fuel power generation. However, the uncertainty about the
production tax credit's availability has created a boom-and-bust cycle for
installing new wind power capacity—installation of new capacity fell
dramatically in years when the authorization for the tax credit expired and its
renewal was delayed, as compared with years when it was available without
interruption. Potential developers are reluctant to commit resources to the
planning and construction of new capacity without the certainty that the tax credit
will be reauthorized. Furthermore, according to the American Wind Energy
Association, 4 to 6 months before the tax credit expires, financial lenders hesitate
to provide capital for wind projects because of the uncertainty of whether the tax
credit will be extended.
DOE officials and industry representatives believe the continued availability
of the production tax credit, or other subsidy support, is vital to the potential
future growth of the wind industry. According to an industry representative, a
long-term production tax credit would facilitate steady market development for
wind power and other renewable sources by encouraging companies to enter the
market, allowing the industry to conduct long-term planning, and eventually help
the industry stand on its own. According to some stakeholders, renewable energy
sources require subsidies, such as the production tax credit, to level the playing
