Campaigns rap wind power as 'Failed Stimulus'

The wind power industry has become tangled in the election year spin-cycle.

Republican candidates who have heavily targeted President Obama's stimulus bill in campaign ads are calling funding for wind power projects a "failed stimulus" that sent jobs to China.

The $4.5 billion set aside for wind power hasn't drawn as much fire as bigger targets like House Speaker Rep. Nancy Pelosi and the deficit, but the attacks are troubling for an industry already hammered by sluggish power demand and falling orders.

"Wind turbines are being used in an inaccurate way to serve near term political agendas," said Rob Gramlich, senior vice president for public policy at the American Wind Energy Association in Washington. "That certainly could harm the industry if this myth is allowed to perpetuate."

A political ad supporting Austin Scott, who is running for Congress in Georgia against incumbent Democrat Jim Marshall, claims Mr. Marshall voted for "Obama's stimulus plan that's done little for American jobs and sent nearly $2 billion overseas to build wind turbines." With wind turbines spinning on the video as ominous music plays, the narrator says sarcastically that the program creates jobs "mostly in China."

In a New Mexico House race, Republican challenger Jon Barela alleges, in an ad, that incumbent Democrat Martin Heinrich voted for the stimulus plan "that's done little to create new American jobs." It goes on to say "Chinese workers were paid to build wind turbines. Call Martin Heinrich. Tell him you want your money back."

The Obama Administration used several mechanisms in the $787 billion American Recovery and Reinvestment Act to provide funding to the U.S. wind industry, which added 10,000 megawatts of power in 2009. The stimulus bill allowed wind developers to use either production or investment tax credits that can be converted to a grant that requires project construction by the end of 2010. The production tax credit first passed in 1992 and has been extended every two years although it expired on three occasions. The current production tax credit expires in 2012.

At least a dozen ads portray stimulus spending on wind power or renewable energy as an example of waste. Another dozen or more allege the stimulus sent jobs overseas to China. None explicitly calls for ending the tax breaks for the wind-power industry once they expire this year, but the wind association fears the criticism will make them harder to renew.

The Republican campaign committee claims it has identified 11 U.S. wind farms that used stimulus grants to buy wind turbines, with 695 of the 982 total coming from overseas suppliers. The Republican group is calling for more stringent Buy American provisions throughout the stimulus package.

The American Wind Energy Association disputed the findings, saying only three of the 33,000 wind turbines in the U.S. were made in China and that the vast majority of foreign suppliers produce turbines for the U.S. market in facilities here.

AWEA Chief Executive Denise Bode wrote to leaders of both parties' congressional campaign committees Oct. 22 to ask for a cease fire, arguing that the ads could undermine efforts to get Congress to extend renewable energy tax credits.

Wind power has long been an industry with political overtones, and the recent attacks show the downside of its reliance on government tax credits. The attacks catch the industry at a vulnerable moment. After a banner year in 2009, construction has slowed. The AWEA reported Friday that wind power installations of 1,634 megawatts in the first half of 2010 were down 72% from 2009.

General Electric Co., the largest wind turbine maker in the U.S., with 40% of installed capacity, said orders dropped by 30%, or $600 million, in the third quarter. The company, which has roughly $5 billion in wind turbine revenue each year, wants to expand by selling more units in China and the U.K.

GE's chief wind turbine rival globally, Vestas Wind Systems A/S of Denmark, said Tuesday it could cut 3,000 jobs at three plants in Denmark and one in Sweden to stay competitive.

Vestas has spent $1 billion to add 2,500 jobs in the U.S., where it has four factories. The company expects 30% of its revenue to come from North America in 2010. Chief Executive Ditlev Engel said Tuesday that U.S. stimulus spending and tax breaks "have definitely increased our competitiveness" in the U.S.

Other parts of the renewable energy community also worried about how election ads could affect tax credits, funding and growth in their industries.

"There is some worry in the geothermal community," said Karl Gawell, executive Director of the Washington-based Geothermal Energy Association. He said the federal stimulus directed $400 million in grants to geothermal research and projects so far. "We have seen continued growth for an industry at a time when the economy was in terrible shape," he said.