Two cheers from Vestas for U.S. wind tax credit shift
COPENHAGEN (Reuters) - An approval by U.S. Senate tax writers to add a production tax credit for wind energy back into a Senate Finance legislation late on Thursday brought back hope of aid for Danish wind turbine manufacturer Vestas (VWS.CO) in the U.S. market.
Senate tax writers late on Thursday approved a $205 billion package of tax breaks in which the $12 billion production tax credit for wind energy was added back into the Senate Finance legislation.
The production tax credit for wind energy had been omitted from an earlier draft.
"I am positively surprised that they have revived this tax credit, but as far as I see it, there is still a long way to a final adaption," said Sydbank analyst Jacob Pedersen.
Vestas, the world's biggest wind turbine manufacturer, has repeatedly warned that failure to extend the Production Tax Credit (PTC), due to expire at the end of this year, could lead to a collapse of the U.S. wind turbine market and force it to cut 1,600 U.S. jobs.
Introduced in 1992, the PTC provides a tax credit of 2.2 cents per kilowatt-hour of electricity produced.
The last time politicians abolished PTC in 2002 led to a 75 percent collapse in the U.S. wind turbine market from one year to the next, according to the American Wind Energy Association.
Earlier this year, Vestas cited IHS Emerging Energy Research (EER) as saying there was a risk of the U.S. market dropping from about 11 gigawatts in 2012 to just over 2 gigawatts in 2013 if the PTC is abolished.
Shares in Vestas traded up 3.2 percent by 0717 GMT, against a 0.3 percent rise in the Copenhagen bourse's benchmark index .OMXC20 of the 20 most valuable and most traded Danish stocks.
Shares in the struggling turbine maker on Tuesday spiked over 20 percent and closed up 11.6 percent after it said it has agreed with its banks to delay a test of its borrowing rules and reported preliminary second quarter results.
(Reporting by Mette Fraende and Teis Jensen, editing by William Hardy)
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