Renewable Energy Production Tax Credits and Rural Communities
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Ports-to-Plains Alliance Energy Summit April 20, 2012 Washington, DC Renewable Energy Production Tax Credits and Rural Communities PTC = Jobs John L. Cohen, Vice President, Government Affairs, Alstom, Inc.
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Renewable Energy Production Tax Credits and Rural Communities
- 1. PTC = Jobs John Cohen Vice President, Government Affairs April 20, 2011
- 2. Alstom: Three Areas of Innovation Leading global provider of equipment & services for… Power Generation Rail Transportation Power Transmission Alstom in the U.S. - P 2 | © Alstom 2011 © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 3. Strong & Sustained Sales, Worldwide Key Facts & Figures: Thermal Power Grid 92,700 employees in 100 $12.9 bn $4.8 bn countries 6% increase in sales from 2009/10 to 2010/11 Steady increase in R&D investment to more than $1 bn USD in 2010//11 Transport Leading provider of innovative clean technology 7.5 €bn solutions Renewable Power $2.6 bn Total sales 2010/11: $27.8 billion Alstom in the U.S. - P 3 | © Alstom 2011 © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 4. Alstom Innovation, Coast-to-Coast 6,000+ permanent employees in 45 states and the District of Columbia 10,000+ employees including contract workers 100+ years of U.S. market expertise in: Power Generation Rail Transportation Energy Transmission • Multimillion dollar investments in Chattanooga, Tennessee and Amarillo, Texas will create up to 600 green jobs for U.S. workers. Alstom in the U.S. - P 4 | © Alstom 2011 © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 5. Alstom Wind - North America Amarillo Nacelle Assembly Facility O p e r a t i o n a l Q 1 2 0 12 C o m m o n G lo b a l P r o c e s s r illo , T X - c e n t r a lly lo c a t e d - r a il a n d t r u c k s h ip p in g 115 , 0 0 0 f t 2 o n 2 0 a c r e s 2 7 0 U n it s ( 3 M W ) a n n u a lly 2 0 0 F u ll-t im e jo b s a t f u ll c a p a c it y L E E D C e r t if ie d S u s t a in a b le S it e Focused Facility for ECO 100 Platform to support US, Canada and Mexico © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 6. Alstom’s Wind business References in US - NAM Adams & Danielson wind farms Minnesota Adams & Danielson • 44 MW - 24 x ECO 86 wind farms NREL • Operational since March 2011 ECO 100 NIRE • Exceeding annual production estimates ECO 86 by 10% • Customer: Alstom’s first US wind farms in commercial operation are exceeding production estimates © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 7. #1 Message Policy Certainty Investment = Presentation title - 01/01/2007 - P 7 © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 8. PTC: Boom and Bust © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 9. Value of Policy Certainty – By the numbers • F OUR Y E A R S of consistent wind tax policy delivered: − 3 5 % annual growth − 4 0 0 manufacturing facilities in 4 3 states − 6 0 % of wind turbine’s value produced in U.S. (up 3 5 % since 2005) − $ 6 0 b il l io n of investment since 2005. − 6 ,8 1 6 megawatts (MW) installed in 2011 • Up 3 1 % since 2010, • 4 6 ,9 1 6 MW installed in the U.S. to date. − 8 ,3 0 0 MW under construction in 2012 © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 10. PTC Expiration: Consequences • If PTC expires in 2013: − A n n u a l I n s t a l l a t i o n s : Drop to 2 GW in 2013, from >8 GW in 2012 − T o t a l j o b s : Drop almost 5 0 % • 7 8 ,0 0 0 in 2012 • 4 1 ,0 0 0 in 2013 − T o t a l I n v e s t m e n t : Drop by nearly t wo t h ir d s • $ 1 5 .6 b il l io n in 2012 • $ 5 .5 b il l io n in 2013 © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 11. PTC Extension: Benefits • If PTC extended for 4-years: − A n n u a l I n s t a l l a t i o n s : 8 - 1 0 GW through 2016 − T o t a l j o b s : Grow to nearly 1 0 0 ,0 0 0 by 2016 − T o t a l w i n d i n v e s t m e n t : Grow to $ 1 6 .3 b il l o n in 2016 © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 12. PTC Extension: Jobs © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 13. PTC: Taxpayer ROI • Four year PTC extension: 8 7 % r e t u r n o n in v e s t me n t for U.S. taxpayers − T a x p a y e r I n v e s t m e n t : ~$ 1 3 .6 b il l io n − T a x p a y e r B e n e f i t : ~$ 2 5 .6 b il l io n − Navigant inputs: • Investment − tax credits for wind plants installed from 2013 to 2016 • Returns: − manufacturing investment − expenditures during construction − land lease payments over the life of the plants out to 2021 − operating expenditures and federal − state taxes on income from power sales © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 14. The Challenge • Congress needs to A C T t h is y e a r − H.R. 3307, American Renewable Energy Production Tax Credit Extension Act of 2011, • 91 co-sponsors − S. 2201, American Energy and Job Promotion Act, • 7 co-sponsors © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 15. Conclusion PTC = © ALSTOM 2011. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
- 16. Thank You www.alstom.com/us [Speaker Name & Title] [Speaker Phone] [Speaker Email]
Editor's Notes
- Last edit: 00/00/2009 The key point about this slide are:
- The past four years of consistent tax policy demonstrate the economic security and energy diversity benefits that the wind industry can continue to provide in a stable policy environment. The wind industry has experienced an average annual growth rate of 35% over the past four years. Over 400 facilities across 43 states manufacture for the wind energy industry today. Sixty percent of a wind turbine’s value is now produced here in America, compared to 25% prior to 2005. More than $60 billion of investment has been made since 2005. The U.S. wind industry installed 6,816 megawatts (MW) in 2011, 31 percent higher than 2010, for a total of 46,916 MW installed in the U.S. to date. There are more than 8,300 MW under construction, setting the stage for a strong 2012.
- Wind PTC = credit for 2.1 cents per kilowatt hour of production. The program has been around since 1994, but has been cyclical rather than a sustained effort The wind industry’s boom-and-bust cycle is evidence that the PTC affects project development. When the PTC has been allowed to expire in the past (1999, 2001, & 2003), installations have dropped between 73% and 93%, with corresponding job losses.
- Estimated revenue affects of the revenue provisions contained in S.1220, ‘The Fulfilling U.S. Energy Leadership (Fuel) Act of 2011’, fiscal years 2012-2021, as scored by the Joint Committee on Taxation. The Act includes a 4-year extension of the PTC for wind, hydro, biomass, and geothermal, so $13.6 billion slightly overstates the cost of an extension for wind only. According to a 2011 Navigant study commissioned by AWEA, a four year PTC extension could result in a 87% return on investment for U.S. taxpayers. Extending the PTC 4 years should be viewed as an investment by U.S. taxpayers. The investment is the tax credits The returns are both in the form of taxes on revenues generated by, and the investment spurred by manufacturing, construction and operation of, the plants. Navigant calculated return of investment of a 4 year extension using the following inputs: Investment: tax credits for wind plants installed from 2013 to 2016. Returns: manufacturing investment, expenditures during construction, land lease payments over the life of the plants out to 2021, operating expenditures and federal and state taxes on income from power sales. The PTC extension would cost ~$13.6B*, but result in ~$25.6B in investment and tax revenue. Return on investment = (sum of benefits)/(sum of costs)-1=$25.6B/$13.6B-1=87% This calculation excludes indirect and induced investment. Last edit: