German Clean Energy Tax Credit Attracts Big Money from US Firm
by Stacy Feldman - Jul 17th, 2008
in
As rumored, New York-based private equity giant Blackstone Group is pouring $1.5 billion into an offshore wind farm in Germany that will power half a million homes and avert 1.6 million tons of CO2 emissions.
It’s being billed as one of the largest wind projects in the North Sea and should spawn a heap of German "green collar" jobs. Says the Blackstone Group:
It is planned to source all technical expertise and substantially all materials from within Germany.
Why would Blackstone choose Germany for its mammoth project? In the company's own words:
Projects of this scale have been made possible by Germany’s comprehensive regulatory framework and incentive schemes for renewable power, as amended by the German Parliament at the beginning of June 2008.
In short: big incentives for investors.
Last month, the German parliament amended its Renewable Energy Act by raising the feed-in tariff for offshore wind, a move that immediately lifted one of the biggest hurdles for the sector. Now, offshore generators receive 15 cents per kilowatt-hour, compared with 9.2 cents for generation on land.
Hello growth.
Interestingly, the Blackstone deal comes as global investors are threatening to kill US-based clean energy projects due to the federal government’s failure to renew vital tax credits.
See if this sounds sadly familiar: Spanish-owned Abengoa has said it will pull the plug on its planned 280-megawatt solar thermal plant in Arizona if the feds don't extend the expiring incentives for eight more years. The plant is expected to be the world’s largest when -- or rather, if -- it goes online in 2011.
Tick, tock: The federal tax credit is scheduled to die in December 2008.
Similarly, San Jose-based solar cell and panel maker SunPower has said in four years it will be able to produce solar electricity for half of the current price -- if the tax credit sticks.
There are many such milestones and projects in jeopardy, all stemming from the same infamous source: uneven US support for clean energy that has bred spotty sector growth an America behind the global clean energy curve.
The good news is that legislation is still in play in Congress. The bad news is that Republicans and Democrats can't seem to agree on how to pay for the credits, and the future looks bleak.
What a shame. More and more private equity and real estate firms are moving into the clean energy sector. And you can bet Blackstone’s decision will pull even more into the wake, and perhaps soon.
Why continue to ship US clean energy capital, the potential for home-grown renewable electricity and all those new green jobs abroad?
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