Tindall VP: $66 million Newton plant may face delay without wind energy tax credit

03/21/2012 5:00 AM

03/22/2012 6:45 AM

If Congress doesn’t extend a tax credit for wind energy for after this year, Tindall Corp. may have to push back construction of a $66 million plant in Newton, a company official said.

Spartanburg, S.C.-based Tindall Corp. announced in 2009 plans to build a 150,000- to 200,000-square-foot plant in a Newton industrial park to make concrete bases for wind turbines. The bases would raise the wind turbines 40 meters to reach winds that are stronger and more consistent.

Tindall vice president Chris Palumbo said Wednesday that the company is still very interested in building the concrete bases and remains committed to building in Newton, but he conceded that setting a date to break ground has become harder than ever.

The company never set a date for the plant’s construction. That decision was always to be based on demand for its product and other internal metrics, he said.

But that demand could plunge 80 to 90 percent in 2013, according to some analysts, if the federal production tax credit isn’t renewed by Congress this year. It provides a tax credit of 2.2 cents per kilowatt hour that makes the cost of buying wind energy competitive with the lowest-cost competing sources of energy, such as natural gas and coal.

Whether Congress will renew the tax credit this year is uncertain, but many of Congress’ more conservative members oppose wind energy subsidies on grounds that they add to the deficit and tinker with the energy markets.

Late last week, U.S. Sens. Tom Harkin, Chuck Grassley, Mark Udall, Scott Brown, Dean Heller, Ron Wyden and Michael Bennet introduced a bill for a two-year extension of the wind energy production tax credit. It would have to pass the Senate and the more conservative House of Representatives.

Having on-and-off tax incentives has been hard on the industry, Palumbo said. Companies have spent millions of dollars to build a domestic wind energy manufacturing industry.

“There’s been huge investment made, and it’s a shame that the U.S. can’t get its act together,” Palumbo said.

But, he said, the rest of the world continues to invest in wind energy, including Canada and Mexico, which would be supplied from Newton. Tindall will also consider building stands for wind farms outside of North America, but not from a Newton plant, he said.

And, he said, the U.S. market isn’t dead and may even provide an opportunity for Tindall. The stands make the turbines run more efficiently, so if developers are looking for ways to lower their cost of energy in order to compete against natural gas or coal, they may call Tindall.

“While it slows things down a bit for the industry, we are still pushing ahead,” he said. “We are optimistic the wind industry is not going away; it’s just slowing down.”

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