Report: Proposed US Import Tariffs Threaten Wind Projects

Report: Proposed US Import Tariffs Threaten Wind Projects
(Photo Credit: Michael Livsey, Flickr Creative Commons)

If the group of US wind tower manufacturers pushing for steep export tariffs gets their way, wind projects could be negatively affected starting in 2020, according to a new report from Wood Mackenzie. The timing of the tariffs would problematic for the wind energy market as well, the analysis says.

The Wind Tower Trade Coalition (WTTC), which includes American manufacturers Arcosa Wind Towers and Broadwind Towers, recently petitioned the US Department of Commerce to investigate whether towers from Canada, Indonesia, Korea, and Vietnam are getting dumped in the United States and receiving unfair subsidies, the Canadian Press reported.

“The department will impose duties if the investigations back up the claims and if the US International Trade Commission determines that dumped and/or unfairly subsidized imports caused injury to the US industry,” the outlet said.

A preliminary determination from the commission is expected within a month, and the Department of Commerce has until December to finish its preliminary investigation, Greentech Media’s Karl-Erik Stromsta reported this week.

If the commission does impose new tariffs, they would add more pressure to a wind energy market already feeling the effects of the Trump administration’s multi-country steel tariff as well as the tariffs on imports from China, the Wood Mackenzie editorial research note says.

“A tumultuous 2020 awaits the US wind energy market as record installations of more than 13 GW push the wind industry’s value chain to the limit,” the analysis said. “Price pressure exists throughout the value chain already, but turbine OEMs are expected to bear the financial burden of the latest salvo in the ongoing trade war.”

This year and the next are on track for record wind installations in the United States because developers are racing to get the federal Production Tax Credit (PTC) before it expires, Stromsta pointed out. Projects qualifying for the tax credit must be completed before the end of 2020, he added.

“There’s never a good time for import tariffs when it comes to keeping costs down for renewables projects,” Stromsta wrote. “But for the US wind market, the timing of newly proposed tariffs on imported turbine towers could not be much worse.”

Dan Shreve, head of global wind energy research at Wood Mackenzie, wrote in the research note that if the new tariffs do go into effect, the risk of canceled projects is real.

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