Senate Finance Moves Forward On Energy Tax Credit Extension

Just before the summer recess in Congress was declared, the Senate Finance Committee passed a measure including a one year extension of production tax credits for wind and geothermal energy projects, making the incentive applicable to projects breaking ground any time until the end of 2013. The credit is set to expire at the end of 2012 unless both houses of Congress pass the measure, cobbled together by Senate Finance chairman Max Baucus and ranking member Orin Hatch. Reported out of the Senate Finance Committee on a bipartisan vote of 19-5, the bill includes a total of $205 billion in tax cut extensions for individuals and businesses.

While Committee passage of the bill is welcomed by energy businesses, some renewable energy advocates mourn that it does not go far enough. “A temporary tax provision I don’t think provides enough incentive for capital investment, and that’s what our industry needs,” according to Associated General Contractors of America Senior Executive Director of Governmental Affairs Jeff Shoaf.

American Council of Engineering Companies Vice President of Governmental Affairs Steve Hall, says the tax credits are “absolutely essential” for the health of the renewable energy economy.

The fate of this legislation when Congress reconvenes after the summer break is still uncertain. Tax credit extensions are just the first step in comprehensive reform of the Internal Revenue Code, and all such legislation may well be pushed back on the Congressional calendar until after the November elections. Furthermore, should some sort of tax cut extender bill get passed when Congress comes back into session, there will be heated debate over, and revisions to, the contents of this bill before anything reaches the Oval Office for signature.

Ball State University Replaces Coal Fired Boilers With Geothermal Energy

The first phase of the geothermal heating and cooling system at the 660 acre, 47 building Muncie, Indiana campus of Ball State University was dedicated March 21, 2012. Completion of this half of the project will save the University $1 million per year in heating and cooling expense, and cut in half the amount of coal burned annually by the University. Once the entire project is finished, four old coal fired boilers will be completely eliminated, and 5.5 million square feet of office, dormitory and classroom space in all 47 buildings will be heated and cooled by means of 3,600 geothermal bore holes across the campus.

At the dedication ceremony, U. S. Energy Secretary Steven Chu  touted the project, assisted by a $5 million stimulus construction grant, as a fine example of President Obama’s energy policy: “The President has made clear that we need an all of the above approach to American Energy, an approach that uses homegrown and alternative energy sources designed and produced by American workers.” Nearly all components of Ball State’s project were made in the USA, and 50 different Indiana companies were contracted to complete the project.

U.S. Leads Geothermal Power Production Capacity

According to the latest update from the Geothermal Energy Association, the United States continues to maintain world leadership in geothermal power production capacity. Total installed U.S. geothermal power production capacity is now nearly 3.16 million megawatts, representing 4% of 2007 total renewable energy consumption in the nation. Geothermal power output is currently concentrated in Alaska, California, Hawaii, Idaho, New Mexico, Nevada, Utah and Wyoming. In 2006 there were 34 such facilities in the U.S., and currently there are 132 on line.

Experts forecast 3% annual growth in the geothermal sector, though pending legislative cap and trade initiatives could double that growth to 6% annually. Success rates for geothermal power exploration are limited to about 25%, and exploration and production costs can range from $1,600 to $5,000 per kw of generation capacity. Once government policies are solidified, and available federal subsidies are identified more clearly, construction of such facilities in certain regions of the country could expand dramatically, with plans already on the drawing boards for facilities in Oregon, Mississippi, Florida, Louisiana and Colorado.