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Bill has help for energy projects

STIMULUS: Tax credits, direct aid offered to renewable developers

Renewable energy developers have reason to celebrate after the federal stimulus bill was signed Feb. 18.

The package, known formally as the American Recovery and Reinvestment Act, provides renewable energy researchers, manufacturers, developers and landowners who install individual projects nearly $27 billion in direct support, more than $7 billion in bond and loan programs and $3.1 billion for the states, as well as extensions and expansions of myriad tax credits, according to the American Council on Renewable Energy and American Wind Energy Association.

DEVELOPERS GEARING UP

What each state will receive is not yet clear, but renewable energy developers are getting many things that they have been requesting for years.

For example, biomass energy plant operators will have a route to be on equal footing for tax credits with other renewable energy sources, such as wind farms. For years, leftover wood from forestry and low-value hardwoods was given half credit under the federal Production Tax Credit. Willow wood for biomass, wind power and solar power was given full credit.

Eric L. Spomer, president of Catalyst... more [truncated due to possible copyright]  

STIMULUS: Tax credits, direct aid offered to renewable developers

Renewable energy developers have reason to celebrate after the federal stimulus bill was signed Feb. 18.

The package, known formally as the American Recovery and Reinvestment Act, provides renewable energy researchers, manufacturers, developers and landowners who install individual projects nearly $27 billion in direct support, more than $7 billion in bond and loan programs and $3.1 billion for the states, as well as extensions and expansions of myriad tax credits, according to the American Council on Renewable Energy and American Wind Energy Association.

DEVELOPERS GEARING UP

What each state will receive is not yet clear, but renewable energy developers are getting many things that they have been requesting for years.

For example, biomass energy plant operators will have a route to be on equal footing for tax credits with other renewable energy sources, such as wind farms. For years, leftover wood from forestry and low-value hardwoods was given half credit under the federal Production Tax Credit. Willow wood for biomass, wind power and solar power was given full credit.

Eric L. Spomer, president of Catalyst Renewables, which owns and operates the Lyonsdale biomass cogeneration plant, said all wood is treated equally by the expanded investment tax credit in the stimulus plan.

In New York, renewable energy plant operators make money from the base power price and from a contract for renewable energy credits with the New York State Energy Research and Development Authority. Biomass is expensive to produce because it needs a constant source of fuel - in Lyondsale, it's wood - which is more expensive than more polluting sources, such as coal.

"It can be very tough economically for biomass projects," Mr. Spomer said. "They compete with wind for renewable energy credits and compete with coal for base power price."

The Lyonsdale plant, which generates 19 megawatts of electricity by burning wood chips, will need retooling or reconstruction in the next few years. The plant spends about $5 million per year getting fuel from the local forestry industry and supports nearly 25 full-time jobs and 100 loggers.

"If you're going to provide local clean renewable energy in the Northeast, Southeast and upper Northwest, biomass has to be part of the mix," Mr. Spomer said.

Catalyst Renewables also has established a fast-growing willow plantation. But though willow wood is eligible for the full credit, it would be difficult to get more than 30 percent of a biomass plant's fuel from plantation sources, Mr. Spomer said. Most would still have to be from waste wood from the forestry industry.

Catalyst is planning a new plant in Solvay, called Onondaga Renewables Project. Under the stimulus bill, those investment costs will be eligible for the tax credit program and a grant program through the Treasury Department, which will fund 30 percent of the cost of eligible projects that start construction in 2009 or 2010.

The pluses of these two measures mean biomass energy developers are not dependent on the stagnant tax credit market.

The federal production tax credit allows companies to take $20 off federal income taxes for every megawatt of renewable energy produced. Many developers "sold" those credits to large corporations in exchange for investment in their developments. But in a time when many investment firms have no interest in tax credits because they're not making money, the credit becomes less useful.

The stimulus package does include an extension of the production tax credit through 2012 for wind facilities and through 2013 for all other renewable energy facilities.

When it comes to another renewable energy source, wind power, the credit will be worth millions for proposed Jefferson County wind farms - about $5.5 million for Iberdrola's Horse Creek project, $3.5 million for Acciona's St. Lawrence project, $6.2 million for BP Alternative Energy's Cape Vincent project and $11.8 million for Babcock & Brown's Galloo Island project - each year. Wind developers have said the credit makes renewable energy projects feasible.

The stimulus bill also removes caps for tax credits on small wind, solar and geothermal projects for individuals. It also increases credits for alternative fuel pumps, electric vehicles and retooling manufacturing facilities.


Source: http://www.watertowndailyti...

MAR 2 2009
http://www.windaction.org/posts/19337-bill-has-help-for-energy-projects
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