Renewable energy groups are beginning their uphill push this week to get Congress to extend vital tax credits for their industries before the end of the year.
The groups, which include the biomass energy and hydroelectric industries' lead trade groups, sent letters to Republican and Democratic leaders making the case that without the subsidies, the lights could dim.
"Time is running out as our incentives will lapse at the end of this year," reads the joint letter sent Wednesday. They argue that the "looming expiration" would hurt their more reliable power plants, such as hydroelectric dams, in bidding at the state level, leading to more "less reliable" wind and solar being built.
Allowing the credits to expire "puts our industries at a significant competitive disadvantage with wind and solar projects with which we compete in bidding on state‐level requests for proposals for renewable electricity, particularly now that they have the certainty that their tax incentives will be in place over a longer term," the letter says.
"The end result – less reliable renewable baseload power will be deployed, which we believe is not the intent or desire of Congress and not in line with an all‐of-the‐above energy strategy," the groups argue.
Wind and solar received a five-year extension of their respective subsidies in a major spending bill deal hashed out on Capitol Hill in December. But other clean energy resources such as hydropower, biomass and other less politically advertised renewables were left out of the deal. Democrats said they made a deal with the GOP to take up the remaining tax subsidies at a later date. But that plan has met with increasing opposition and has floundered.
The last time the orphaned subsidies were taken up, they were voted down after conservative groups lobbied hard against them, urging GOP lawmakers to vote down the inclusion of "green pork" in a bill to reauthorize the Federal Aviation Administration.
It is not clear how or when Congress will go about extending the subsidies in an election year. Observers suggest it will have to wait until the lame-duck session after the elections.
The letter attempts to distance hydropower and biomass from solar and wind, which were last year's big subsidy winners, in the hopes of gaining more conservative support.
They argue that hydropower, biomass and other similar plants generate "baseload" power, which means they can produce electricity on a 24-hour-a-day, seven-day-a-week cycle. Solar and wind energy are intermittent and cannot provide baseload power, as they only produce when the wind is blowing and the sun is shining.
Hydropower, biomass and waste-to-energy projects need the subsidies to secure the financing they need to get new projects off the ground, said LeRoy Coleman, a spokesman for the National Hydropower Association.
"Investors that will be looking at hydropower projects won't have that same assurance," Coleman said. "Our projects have a long development lead time. We need as much forward certainty as we can get in the tax code."
The Energy Information Administration said Wednesday that hydropower is on a comeback in the West due to increasing rainfall and surging dam and river levels.
At the same time, the Golden State, which is one of the largest markets for electricity in the West, has increased the amount of electricity it receives from solar and wind, said Adam Sieminski, the head of the statistical and analysis arm of the Energy Department.
"Total U.S. solar power generating capacity by the end of 2017 is expected to be almost double the generating capacity from two years earlier," Sieminski added in releasing EIA's latest short-term energy outlook.