Escalating climate change, sustainability, energy costs, and resource depletion. These are a few reasons to why the renewable energy industry has been expanding swiftly for the last decade or so. Because of their nature, renewable energy projects face many threats and challenges. However, contract management can help reduce some of these threats.
It’s no secret that over the last few years the alternative energy industry has faced challenges. From new and developing technologies, special interest groups and government feuding, there have been tense moments during which the future of the industry seemed uncertain. This past week, though, another tally was added to the win column of the industry's scorecard as the Investment Tax Credit (ITC) and the Production Tax Credit (PTC) were both extended as part of the $1.8 trillion package sent to President Obama's desk for signature.
Wind farm developers in the United States may want to gear up planning for new projects, as action in Washington to extend the Production Tax Credit (PTC) could come before year’s end. The PTC has provided incentive for a dramatic increase in wind farms and growth of the wind energy industry. That growth has resulted in greater wind energy capacity since the PTC was established.
The PTC, however, was allowed to expire at the end of 2014. There is new legislation in Congress that would extend the PTC. It received strong bipartisan support in the Senate Finance Committee in May. Now, Marika Fredriksson, Chief Financial Officer of Vestas Wind Systems, the world’s largest wind turbine manufacturer, told Reuters that she believes Congress will approve an extension of the PTC in December 2015.
Common criticisms of widespread development and utilization of renewable energy, particularly wind and solar power, are that power is only being generated when the wind blows and the sun shines. Critics claim these facts in nature result in unreliability of renewable sources of energy.
But there is a technological response to this criticism: energy storage systems. Recognizing that there are downtimes of power production when the wind isn’t blowing or after the sun has set, researchers have been hard at work for some time developing systems that will store energy so it will be available to the grid on a 24-hour basis.
Increasing responsiveness and maximizing resources are important factors in how alternative energy companies improve their business in today’s data-driven, performance-based markets. The ability to deliver projects on time and within budget is one measure of that performance. Another is how efficiently operations and maintenance are managed and achieved. The effective delivery and maintenance of property and assets are fundamental to achieving a company’s objectives in any project that involves real land assets and property stakeholders. A well designed and implemented land asset and royalty management system can substantially improve these capabilities.
Major benefits of an alternative energy management system can be found throughout the lifecycleof a project.This blog will briefly review the benefits that an alternative energy management system will achieve when implemented properly.
In the development and operation of a wind farm, several issues enter the discussion quickly, issues that are critical to determining project costs. These issues include availability of wind, siting of the wind farm and its turbines, land use in the area, transmission of the electricity to the power grid, access roads, and power generation capacity of the turbines.
But there is another issue that gets little attention outside the wind industry world. Managing lease and royalty payments to landowners can be a time-consuming, labor-intensive task. Absent an effective strategy and the right technology, wind companies struggle with this necessary aspect of doing business.
The Production Tax Credit and Investment Tax Credit have been political footballs in recent years. Extensions have been approved, then left to expire, brewing uncertainty within renewable energy industries.
This remains the case. This summer, the U.S. Senate Finance Committee voted 23-3 to extend a number of renewable energy tax credits through the end of 2016. That measure would allow developers of wind, geothermal, biomass, landfill gas, incremental hydroelectric and ocean energy to take advantage of federal tax credits for projects begun before Dec. 31, 2016. Among those are the Production Tax Credit (PTC) and Investment Tax Credit (ITC). If passed, wind farms could receive a 2.3-cent-per-kilowatt-hour credit through the end of 2016.
This article also appears on www.altenergymag.com.
The 2014 numbers are in and it’s great news for alternative energy. All the primary sources of clean, renewable energy are being developed and consumed globally at greater levels.
As the respected Worldwatch Institute cites in its 2015 global status report, released in June 2015, renewable energy continued to grow during 2014 against the backdrop of increasing global energy consumption, particularly in developing countries, and a dramatic decline on oil prices.