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Colorado’s Wind Energy Industry Could Be In Big Trouble

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(credit: CBS)

(credit: CBS)

DENVER (CBS4) – It’s been a tough few months for workers at a wind power company with operations in Colorado, and things just got worse.

Another 80 workers at the Vestas plant in Brighton are now out of a job. Vestas says those are part of the latest round of layoffs at its U.S. plants. Two-hundred Colorado workers have been let go so far this year and more are expected down the road.

The entire renewable energy industry could be headed for a crisis, according to wind experts. They say Congress’ inability to pass a tax credit could cut the industry in half. That would mean thousands of jobs lost around the country, including Colorado.

On Colorado’s Eastern Plains hundreds of wind turbines are standing skyscrapers where a few years ago there was only prairie land.

“One turbine in three hours will produce enough electricity to power your house for a year,” Vestas employee Dan Bolten said.

Bolten was a 26-year Navy veteran. He moved to Limon two years ago when Vestas made large investments in Colorado by adding four manufacturing plants and more than 1,500 jobs.

“A lot of businesses were in a financial hurt locker,” Bolten said. “Now they’re actually able to stay afloat, and stay in town, where some people were actually considering moving their businesses out.”

Now uncertainty in the wind industry is already causing major disruptions in towns across the country.

Wind relies heavily on what’s called the Production Tax Credit, or PTC. It gives huge tax breaks for electricity from renewable sources. Congress has passed the PTC regularly since 1992, but gridlock in Congress this year has kept the PTC from even getting a vote. Just delaying it has hurt the industry because it needs a full year to plan ahead.

“We have to adjust according to the market just like any other business,” Susan Innis with Vestas Government Relations said. “If we don’t have the orders coming in we’ve got to take a look at how we can stay competitive and reduce our costs.”

Its unease with Congress has shaken the company’s faith. By the end of the year Vestas will have cut nearly 4,000 jobs. The company expects their business to drop 75 percent by 2013.

“I think there will be potentially more impacts. You’ve got to adjust to what the market demands,” Innis said. “Every business does that. The wind industry is no different.”

In the U.S. wind production is still in its infancy, but to this point it has grown rapidly. Xcel Energy says 15 to 20 percent of their power will come from wind this year. About 1/10th of Colorado’s power comes from wind. It’s enough to power 500,000 homes. The company employs nearly 5,000 people in the state — jobs that have increased in the face of the recession and recovery.

“It has not been a high priority. It has not been recognized as a job creator,” said Craig Walker, owner of Walker Components.

An entire wing of Walker’s component factory could close without the PTC. As an independent maker, he supplies miles of cables used in wind turbines.

The American Wind Energy Association says by March of next year 37,000 wind employees will be out of work if the PTC fails.

“We had plenty of notice on this. We all knew that this was going to be coming and we could not get Washington to get, in my opinion, their act together.”

All but one member of the Colorado delegation supports the PTC. It has bipartisan support in the states that produce wind, but nationally, Republicans have worked to block it. They say the government should pursue natural gas instead. Its passage may depend on who wins in November. Barack Obama supports the PTC, but Mitt Romney does not.

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