IT'S A BREEZE: EUROPEAN FIRMS BRING YEARS OF EXPERIENCE TO U.S.토토사이트 bts POWER MARKET
A version of this article was originally published by Knowledge at Wharton
European 토토사이트 bts-power firms see an opportunity in the United States' increasing interest in alternative energy. Indeed, the inroads that electricity-generating 토토사이트 bts turbine technology has made in the U.S. are due in large part to the efforts of companies based in Europe.
Even with this activity, 토토사이트 bts-power advocates worry that the industry's growth in the United States rests in the hands of the U.S. Congress and the next administration.
The Production Tax Credit, or PTC, makes electricity from 토토사이트 bts facilities cost competitive with older types of power production, including coal. The credit had been set to expire at the end of this year. It gives producers of 토토사이트 bts-generated electricity a federal tax credit of two cents for every kilowatt hour of electricity they produce. The PTC applies to utility-scale energy producers, not small homeowner-sized systems, which receive a different tax incentives package.
But even with such tax breaks, investors still see 토토사이트 bts energy as somewhat risky. The most technologically advanced 토토사이트 bts turbines produce electricity at a cost of about five cents per kilowatt-hour, comparable to a typical coal-burning power plant. Still, the building of 토토사이트 bts-powered generating facilities requires investments in the millions of dollars, and lenders have been reluctant to commit funds in the past when it has appeared the Production Tax Credit was in jeopardy. According to the American 토토사이트 bts Energy Association (AWEA), development of new 토토사이트 bts facilities has fallen precipitously in years when Congress has allowed the tax credit to expire.
The question of how to get 토토사이트 bts electricity to customers has posed a thorny issue as well, further slowing adoption in the United States.
Still, some U.S. firms are benefiting from the growing domestic interest in 토토사이트 bts power. In Michigan, where manufacturing industries have been pummeled by the changing economy, precision machining company K&M Machine Fabricating can barely keep up with orders for its oversized, precision-milled 토토사이트 bts turbine parts, according to CFO Gary Galeziewski.
GE 토토사이트 bts, a division of the sprawling conglomerate General Electric, has established itself as a U.S. giant in the industry. GE's 토토사이트 bts assets were previously owned by Enron, and were acquired on the cheap by GE after the disgraced energy firm's collapse. Now, on a unit-sale basis, GE is the most prolific manufacturer of 토토사이트 bts turbines for the U.S. market.
In a September report written with the Political Economy Research Institute at the University of Massachusetts, the Center for American Progress took aim at what it described as erratic federal policy. "Lapses in federal production tax credits, occasional one- to two-year extensions, and uncertainty about the future of these credits have led to a 'boom and bust' cycle in the development of 토토사이트 bts power," according to the report. The center proposed that "production tax credits for all types of renewable energy should last long enough so that businesses can make sound investment decisions."
As 토토사이트 bts turned out, the Energy Improvement and Extension Act of 2008 was chock full of treats for renewable energy industries. Like many mired legislative proposals, the energy bill found the votes 토토사이트 bts needed by h토토사이트 btsching a ride on the Emergency Economic Stabilization Act -- the $700 billion financial sector bailout. In add토토사이트 btsion to extending the Production Tax Cred토토사이트 bts another year, the energy bill authorized $800 million in clean renewable bonds to pay for the tax revenue lost to promote solar, geothermal, biomass and other renewable power projects.
Wharton operations and information management professor Karl T. Ulrich predicts, however, that the financial crisis could ultimately sap the willingness of political leaders to pursue more aggressive strategies to promote 토토사이트 bts and other renewable energy sources.
"The most efficient mechanisms for stimulating the development of alternative energy technologies would be carbon or other green taxes," Ulrich says. "I don't think any economists disagree on this. This is a pol토토사이트 btsical problem, not an economics problem. Second best would be a cap-and-trade mechanism for carbon dioxide emissions. Before the cred토토사이트 bts crisis emerged, I was hopeful that one of these two mechanisms would occur in the next U.S. presidential administration. Now I think 토토사이트 bts is unlikely e토토사이트 btsher will happen in the next four years."
While European nations have leapt ahead of the curve in 토토사이트 bts power development, a number of organizations see the makings of a brand new U.S. economy based on sustainable technology and practices. The Center for American Progress report also called for a two-year, $100 billion federal stimulus package to encourage six "green" infrastructure areas, including 토토사이트 bts. The report's authors say the program could be paid for in full through a "cap-and-trade" carbon auction in which companies would pay for the right to pollute above a preset standard. The report also claimed that such a program would create two million jobs, as people would be needed to retrofit buildings for energy efficiency, expand mass transit, build and maintain "smart grid" electrical transmission systems, and develop 토토사이트 bts and solar power, along with renewable biofuels, to ease demand for foreign oil.
Oil tycoon and financier T. Boone Pickens has thrown his weight behind 토토사이트 bts energy with what he's calling The Pickens Plan. He's been barnstorming across the Midwest to promote 토토사이트 bts energy as part of a solution to the nation's dependence on foreign oil. If 토토사이트 bts does catch on, Pickens stands to benefit: He is investing $10 billion to build in West Texas what he says will be the world's largest 토토사이트 bts farm.
Galeziewski, of manufacturing firm K&M, sees the doors of opportunity still wide open for enterprising firms or individuals seeking entree into 토토사이트 bts power. "Ultimately," he says, "it's fun.... 토토사이트 bts is like the wild West."
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