Wind energy in the US on the brink, job losses cloud the horizon

A new report from Environmental Entrepreneurs (E2), a national group of business leaders that advocate for economic development through sustainability shows that 37,409 new jobs could be created from the clean energy related projects announced nationwide during the second quarter of this year. The bulk of those jobs will come to Michigan, Colorado, Ohio, New Jersey, Illinois, Nebraska and Mississippi – some of the states in this list have the highest unemployment rates in the country.

“The good news is that despite the challenging economic and political environment, the clean energy industry is still creating badly needed American jobs all across the country,” said Judith Albert, executive director of Environmental Entrepreneurs. “The bad news is that the threats to the wind industry because of uncertainty over the Production Tax Credit are very real, and are already taking its toll on job creation in that sector.”

In the first quarter of this year, E2 tracked 31 wind power generation project announcements that would create more than 9,100 jobs. In the second quarter, E2 tracked 12 wind generation project announcements that are poised to create about 2,300 jobs.

The data from E2 tracks broadly with the capital data seen throughout the renewables industry – according to Mercom Capital Group, which tracks mergers and acquisition activity in the wind sector, most of the large-scale project deals announced in the second quarter were announced in the US amounting to about $4 billion spread over 21 deals. Some of the largest are located in Michigan and California – two states plagued with fiscal difficulties.

The American Wind Energy Association announced that wind power in the US has blown through an historic milestone of 50 gigawatts of electric generating capacity, adding significantly to the renewable capacity of the US. Right now, there is enough wind power to power the states of Nevada, Colorado, Wisconsin, Virginia, Alabama, and Connecticut combined – or the generating power of 44 coal-fired power plants or 11 nuclear plants without the clean up required by those two power sources. It also avoids emitting as much carbon dioxide as taking 14 million cars off the road and conserves 30 billion gallons of water – another critical factor as 60% of the nation is suffering through drought conditions. The impacts of the drought are already being felt throughout food and fuel prices nationwide, a trend that is only expected to continue. As CivSource reported, the number of record-breaking-heat days in the US has skyrocketed making this year one of the hottest in history.

Despite all this positive news, there are clouds on the horizon. 2012 has seen unprecedented growth for wind power, largely driven by a federal production tax credit which makes some of immediate capital expenditure required to build out this infrastructure more affordable. This tax credit will expire this year and that’s creating uncertainty for projects further down the pipeline. Clean energy projects were announced in 30 states in the second quarter and nearly one-third of those announcements were in Midwest states, including Michigan, Ohio, and Illinois – all states with high unemployment and drought conditions, making the need for renewables real and immediate.

All four major manufacturers in the wind space have already announced layoffs as Congress has made no move to extend the credit and cash strapped states are slow to react. Layoffs announced this week include cities such as Tulsa, Oklahoma; West Fargo, North Dakota; Little Rock, Arkansas; and Dallas, Texas. According to the American Wind Energy Association, if the credit expires the industry can expect to see a job loss rate of 73-93%.

“Layoffs have begun up and down our American manufacturing supply chain, which the industry has so proudly built up in support of the US economy and made-in-the-USA manufacturing. And when incoming orders stop, so do factories,” said Denise Bode, CEO of the American Wind Energy Association.

The Obama Administration has announced that the federal government will expedite several state projects as part of the We Can’t Wait Initiative. The projects have been deemed nationally and regionally significant and are in Arizona, California, Nevada and Wyoming. Some states are trying to stem the tide of layoffs and improve renewable energy projects in their states with similar initiatives, Vermont, Pennsylvania and New York all have added to their renewable incentive programs. New York recently made $107 million available for solar projects, expanding a two year old program in an effort to add to the amount of solar power generated in the state.

“These truly are the best of times and could be the worst of times for American wind power,” said Bode.