Alternative-energy proponents argue that the Senate measure would extend tax credits for one year and provide incentives for more rapid growth of solar and wind power.
Congress has stumbled in earlier attempts this year to renew the credits, with a measure proposing higher taxes on the oil and gas industry to pay for it getting shot down.
Hunter Armistead, head of renewable energy for Babcock & Brown, the private-equity firm with 20 U.S. wind farms generating 1,600 megawatts, said the tax credits now facing the Senate will be revenue-neutral for the government, paid for by economic stimulus tied to construction of more giant turbines and the electricity they produce.
"It's pretty remarkable. ... Wind turbines are used in political ads, yet we stand on the verge of not extending the credit which supports the growth of the largest-growing sector of the utility and energy area in the country," he commented.
The American Wind Energy Association, a lobbying group, says that the possible expiration of the production tax credit for wind is causing a rush to complete projects by the end of the year, with increased risks and costs for the industry and eventually for customers.
Under the best-case scenario for the industry, Congress will extend the credit this month, easing the pressure for immediate project completion while reopening the pipeline for 2009. AWEA projects at least 7,500 megawatts of new capacity to be added in 2008.
Wind energy has been on the rise, outstripping newly developed megawatts from traditional power plants because of a less arduous regulatory process along with other incentives.
Babcock & Brown's biggest wind site of 2008, the Gulf Winds Project in Kennedy County, Texas, will ramp up this year, with a targeted output of 280 megawatts.
All told, Babcock & Brown plans to deliver 568 megawatts of capacity with an investment of more than $1 billion this year. That's in addition to its 585-megawatt Sweetwater Wind Farm in Texas, one of the largest in the nation.
To help secure financing, wind farms ink power-purchase agreements and other contracts with power companies.
Federal agencies such as U.S. Fish & Wildlife Service as well as the Federal Aviation Administration are involved in the process. Wind farms also apply for interconnection agreements with region power entities.
