Patrick Springer, Published January 19 2009
Stimulus may give a boost to windThe wind energy industry could get a friendly gust from incentives that are part of a proposed economic stimulus package taking shape in Washington.
The freeze in the credit markets has slowed wind development, resulting in layoffs at DMI, the wind tower manufacturer in West Fargo, among other places.
But regulators are unaware of any stated plans to slow development in North Dakota, where more than 5,000 megawatts of wind power projects have been announced or are under construction.
“There haven’t been any regulatory filings with us that would indicate a slowdown,”said Tony Clark, a member of the North Dakota Public Service Commission, which must approve wind farms.
The stimulus package advanced last week by Democrats in the U.S. House of Representatives contains $32 billion for a ?smart electricity grid? to reduce waste and more than $20 billion in renewable energy tax credits, among other provisions.
Rep. Earl Pomeroy, D-N.D., introduced legislation to extend the wind energy production tax credit – long the key incentive for wind development – until 2015. It is slated to expire this year.
Also, the House plan would allow companies to take a 30 percent investment tax credit in lieu of a production tax credit, an upfront stimulus that could be more attractive.
Because of the sharp economic slowdown, the production tax credit, which is offset against profits, appears to have lost much of its power at the moment, Clark said.
Many agree, however, that a multiyear extension of the production tax credit is important to provide stability to the wind industry.
Sen. Byron Dorgan, D-N.D., is working on provisions to boost transmission infrastructure, critical to enabling significant expansion of wind power as the country shifts to renewable energy sources such as wind.
Two key areas to address: How to apportion costs for transmission lines that cross multiple jurisdictions, including states, and how to facilitate the designation of transmission corridors, always controversial.
“Transmission is a very big issue, very controversial, but we don’t have much choice if we’re going to maximize renewable energy,” Dorgan said.
Besides any boost from the stimulus, a new energy bill, which Dorgan hopes will emerge in the first half of the year, likely will include a renewable energy standard, perhaps a requirement that 15 percent of power should come from renewable sources.
“We’re almost certain to have a renewable energy standard,” Dorgan said. It’s likely to be fairly aggressive.”
If a renewable energy standard passes, the demand for wind energy will get a big push, he said. At the same time, Dorgan is pushing for money to capture and sequester carbon from coal.
NextEra Energy Resources, formerly FPL Energy, the largest wind developer in North Dakota and one of the largest in the nation, has signaled its projects this year could be 15 percent to 20 percent below levels forecast earlier. Pending NextEra, wind projects in North Dakota include a 1,000-megawatt wind farm northwest of Center and a 150-megawatt project 15 miles northwest of Ellendale.
Attempts last week to reach NextEra about the status of its North Dakota wind projects weren’t successful.
Projects that already are in the pipeline in many cases probably already have financing lined up, said Beth Soholt, director of Wind on the Wires, a collaborative of wind developers and environmental groups.
Even if wind does slow as a result of the recession, she predicts strong demand will return.
“I think this is a temporary dip,” Soholt said.
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Readers can reach Forum reporter Patrick Springer at (701) 241-5522