Another wind power company is in serious trouble. Katana Summit, a tower manufacturer that employs 214 people in Columbus, Neb., and 79 in Ephrata, Wash., said it is seeking a buyer, and if one doesn’t pop up, it’ll shut down operations.
The company blamed its predicament on the failure of Congress to extend the production tax credit for wind, which will expire at the end of this year. In anticipation of that expiration, wind development plans are being shelved all over the country.
Against that brutal, real-world backdrop, the shape of the PTC debate this week sounded rather esoteric, pivoting on the question of wind power’s role in forcing negative wholesale electricity prices in some areas of the country.
The big energy company Exelon, which owns wind farms but sources more than 90 percent of its power from nukes, has cited this phenomenon in opposing the PTC extension. That prompted the Ameircan Wind Energy Association, the industry’s leading trade group, to toss Exelon from the organization.
So what’s going on here? Exelon complains that the 2.2 cents per kilowatt PTC gives wind power an unfair advantage over the company’s nuclear power plants when energy is in surplus — typically on nights when demand is low and when wind power has picked up. In such situations, energy generators ramp down production, but it’s not so easy to do that quickly with nuclear. Exelon argues that the tax credit allows wind producers to push the price of power below zero and still make money. Meanwhile, Exelon is faced with losing money on its power.
Exelon says that without the PTC, the playing field will be more even.
The AWEA, in a blog post this week, said Exelon is overstating how frequently this happens and also exaggerating the role of the PTC in bringing about such circumstances. “Because wind energy has no fuel cost and extremely low variable (operations and maintenance) costs, even without the PTC wind energy would enter into the market at close to $0/MWh,” the group said. “Thus, the PTC itself has very little effect on real-time electricity prices.
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