Wednesday, February 3, 2010, 4:43pm PST | Modified: July 23, 2010, 11:25 AM

Blumenauer wants to extend renewable energy grant program

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U.S. Rep. Earl Blumenauer (D-Ore.) on Friday will introduce a bill that would extend by two years a federal renewable energy grant program credited with keeping the U.S. wind energy industry afloat in the financial crisis. Last February, Congress passed the $787 billion American Recovery and Reinvestment Act that included direct grants for qualifying renewable energy projects.

The grants would expire Dec. 31, but Blumenauer’s bill, dubbed the Renewable Energy Expansion Act, would extend the grant program through Jan. 1, 2013. The grants enacted in the stimulus bill served as an alternative to federal tax credits which were widely used to subsidize the cost of large projects. The tax credits became largely obsolete once the global financial crisis brought about the collapse of several major financial institutions that served as tax-equity partners for developers by financing wind projects in exchange for the lucrative tax credits.

Instead of tax credits, the stimulus bill made grants available based on the size of the investment in a renewable energy project. That removed the need for a tax-equity partner by providing a cash incentive directly to the developer.

Among the biggest recipients of the grant program was Portland-based Iberdrola Renewables, which received more than $550 million in stimulus grants for its $1.8 billion of investment in eight U.S. wind farms, including two in Oregon.

Entering 2009, some analysts projected less than 6 gigawatts of new capacity would be developed in 2009, far below the record 8.5 gigawatts installed in 2008. Still others thought 2009 capacity would fall by more than 50 percent. The American Wind Energy Association last week, however, said 2009 brought nearly 10 gigawatts of new generating capacity, breaking all previous records.