Winds of Change Reshape the Wind Industry

Sep 21, 2018  | 6 min  | Ep4405

The EPA unveiled a Renewable Fuel Standard waiver tracker on their website in addition to releasing monthly data on biofuels credit trading volumes.

The National Corn Growers Association called the move a good place to start, but said even more questions need to be answered on EPA’s justification policy.

Another homegrown source of energy that sprouted in the Midwest is now branching out to offshore locations.

But as John Torpy reports in our Cover Story, time is running out to take advantage of some governmental assistance for the wind industry. Producer Contact torpy@iptv.org

 

The number of whirling blades scraping Midwestern skies has grown steadily across the nation’s midsection in recent decades. That growth may soon have to contend with the loss of a primary building block - the Energy Production Tax Credit.

In the early 1990’s, the tax-deferred program passed through Congress, helping stabilize and expand the use of renewable energy. The credits helped companies like Iowa-based MidAmerican Energy to begin investing heavily in wind energy production. In 2016, nearly half of the power provided to customers was produced by wind turbines. The company plans on achieving a goal of having 100 percent of their power portfolio be renewable by 2021.

Those same tax credits spurred growth in the industry and helped wind power producers update aging infrastructure without having to pass the costs along to customers.

Spencer Moore, VP of Generation, MidAmerican Energy: ”What the repowering process is essentially, a opportunity for us to go ahead and put more efficient equipment on existing assets that we're already own/but as we look at the project, the real benefit for our customers is that we're going to get a million, about a million megawatt-hours a year of additional energy out of these existing projects.”

By upgrading the equipment on over 700 existing towers, the company is increasing the amount of energy it captures, while maintaining as small an economic footprint as possible.

Spencer Moore, VP of Generation, MidAmerican Energy: “On days like today, where the winds a little bit lower, the turbines cut in a little sooner we get a little more energy at lower wind conditions. And that really helps us pick up more energy from existing assets.”

MidAmerican, like other wind energy providers, is working on a tight timetable. With passage of the Bipartisan Budget Act of 2018, wind energy businesses may be witness to the curtain call for Energy Production Tax Credits. Wind energy projects starting construction by December 2019 are eligible for the full credit. Projects starting after 2019 will see the credit shrink by 20 percent per year until the program expires in 2022.

Those companies working to expand their production capacity also face hurdles in communities where the towers are being erected. Some landowners charge that sight and noise pollution hurts property values as well as creating a potential health risk. Environmental groups contend the turbines are a threat to bats and birds.

However, according to U.S. Fish and Wildlife data, the number of birds killed by buildings is 1,500 times greater than the number of birds killed by wind turbines. Further, a 2014 National Institutes of Health study revealed noise and visual complaints had more to do with who was receiving economic benefit from nearby wind farms. And three university studies showed wind farms had no impact on housing prices.

A half-hour ferry ride off the coast of Rhode Island stands the nation’s first offshore wind farm. Constructed by Deepwater Wind, the Block Island Wind Farm began construction in 2015 and went online in 2016, with a price tag of almost $300 million dollars. For the 1,000 plus year-round residents of Block Island, the towers brought stability to an otherwise uncertain electrical infrastructure.

Jeff Grybowski, CEO, Deepwater Wind : “We came across Block Island for a few reasons. One, of the island had this really urgent energy need. They had old diesel generators that they were looking to replace but we're struggling to find a solution. At the same time the state, the larger State of Rhode Island, was looking to be a pioneer and offshore wind energy. So it was a perfect marriage.”

Offshore wind turbines dwarf their inland counterparts. At the tip of the blade, Block Island turbines stand at just over 600 feet as opposed to the standard 270 feet found across the Midwest.

Jeff Grybowski, CEO, Deepwater Wind : ”And so with the further offshore you get, the stronger the wind tends to be, and the further offshore you get fewer people can see them. So you reduce the potential, you know, negative potential skepticism of these projects by putting them out of sight.”

The offshore wind industry faces some of the same hurdles as onshore producers. The same tax credits helping advance the industry technologically, will gradually fade away, increasing costs for future projects.

Deepwater Wind also has contended with objections from some fishermen and mariners who claim the company has infringed on fishing grounds and damaged equipment.

 Jeff Grybowski, CEO, Deepwater Wind : ”we have to work in our industry, the offshore wind industry, with commercial fishermen to make sure that we can all co-exist out there. It's a big ocean and there are ways that the two industries can work together but we have to be sensitive to the fact that we've got an existing industry out there that used to using the ocean. So that is the real challenge is we're new neighbors out in the ocean and we have to learn how to work together.” 

The work by companies like Deepwater Wind has gained some attention by officials in Massachusetts, Connecticut, New York and New Jersey where land is at a premium.

Jeff Grybowski, CEO, Deepwater Wind : ”...that combination of having this big dense Coastal population really close to a huge offshore resource is the magic behind our business and that's the reason why we think offshore wind be such a big thing in the US.”

For Market to Market, I’m John Torpy.

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