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How to navigate changing winds in tax credits debate

Delta Wind Farm / flickr

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.

The bill, however, still must pass the full Senate and House of Representatives.

Effectiveness of tax credits

The tax credits have successfully advanced wind farm development, resulting in lowering of costs by more than 50 percent over the past five years. These tax credits have helped the U.S. become the top wind energy producer in the world. When the PTC was allowed to expire in 2013, construction of new wind farms dropped 92 percent, resulting in the loss of 30,000 jobs. When the PTC was subsequently renewed, wind energy jobs increased by 23,000.

While the fate of tax credits is uncertain, the equipment improvements and technological advancements are a constant. Industry analysts credit these factors as additional contributors to the growth of the wind energy industry. These advancements decrease the cost of developing, operating and maintaining wind farms while simultaneously increasing their potential output.

Improvements in equipment have come in a relatively short period of time. Today’s turbines are taller and rotor diameters and blades are longer. Improvements in gearboxes, generators and bearing have made them more reliable. Onboard sensors are more effective at measuring and recording data. Power output sizes and ratings have increased. Research and development in equipment improvements continue. Especially exciting is the work being done to improve the design and reliability of turbines used in offshore projects.

These and other equipment improvements have increased the energy capture of turbines and made their operation more efficient. That, in turn, provides incentive for developing more wind farms and makes their financing more attractive.

Advancements in technology

Equipment improvements, however, do not paint the entire picture. Advancements in technology are positively impacting the industry in a big way. Companies that keep up to date with the latest technology are better able to maintain an edge in a highly competitive energy market. As is the case with equipment improvements, new technology is making the development, construction, operation and maintenance of wind farms more efficient and profitable. That is especially important as uncertainties persist over the future of federal tax credits and state-sponsored incentives.

geoAMPS provides a Web-based software product called altAMPS that helps wind energy companies increase efficiencies. Companies can establish a centralized database of organizational and project information. Software featuring the Web platform’s dashboard-focused interface gives users quick and easy access to the central repository of information. Platform users can retrieve, edit, approve and complete assignments from any Web-enabled computer or mobile device.

Wind farm development and O&M

Wind patterns, topography, existing utilities and other infrastructure, population density, land use, proximity to utility lines and site preparation costs are just some of the many issues that factor into determining a suitable location for a wind farm. geoAMPS provides GIS mapping and software-generated algorithms to determine the optimal locations for wind farms and individual turbines in the wind farm.

Once the wind farm is developed, companies can use the software to establish systematic inspections and repairs of each of its turbines. The company can receive automated alerts of when inspections should be done. The outcome of the inspection and any repairs is uploaded into the system, creating a permanent record of work performed on each turbine, which helps eliminate duplication of work in the field.

The software also helps wind energy companies manage lease and royalty payments to landowners. altAMPS automates the complex process of meeting ongoing payments, eliminating the need for paper records or spreadsheets. The software is customized to company or project needs. All landowner and payment information is entered into the system once, or changes made once, and the system manages and tracks payments on an ongoing basis. Rather than relying on hundreds of manual calculations each month that are time-consuming and prone to error, the web-based software, operating from a central repository of project and company information, conducts automatic calculations, factoring in the myriad of variables that may exist.

Want to learn more about how geoAMPS can help your wind energy company save money through increasing efficiencies. Visit www.geoamps.com or call 614-389-4871. See altAMPS in action by scheduling a demonstration.

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Dan Liggett is Communication and Public Relations Consultant for geoAMPS.

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