Wind power still in limbo
Developers have renewed tax break, but wait on demand, permits
Tuesday, January 22, 2013
WASHINGTON — Congress gave a lift to wind-power producers this month by renewing a tax credit worth more than $12 billion over the next decade.
But the subsidy likely won't be enough to get more than a dozen proposed wind farms in Washington to quickly start spinning their giant blades. Cheaper natural gas, environmental concerns and plentiful renewable-energy sources for utilities are among a confluence of factors that have taken much wind out of new turbines' sails.
The Whistling Ridge Energy Project in Skamania County, for instance, remains in limbo as it awaits a June state Supreme Court review of claims that the project would harm wildlife and mar scenic areas. Friends of the Columbia Gorge and another advocacy group are challenging former Gov. Chris Gregoire's 2011 approval for the 75-megawatt wind farm, which would be the Northwest's first built on commercial timberlands.
And in November, EverPowerWind Holdings said it will postpone building Coyote Crest Wind Park in Lewis County because it can't secure buyers for the 120 megawatts of power its 47 turbines would generate.
That's partly because many of the region's utilities already exceed the state mandate to obtain at least 3 percent of their electric power from renewable energy, not counting most hydropower, by 2012 — and the benchmark won't rise again until 2016.
Taken together, the market forces could clip the double-digit growth the wind-power industry has enjoyed for half a decade.
Not counting hydropower, wind is the largest renewable source of electricity in the United States. Wind overtook power generated from wood and other biofuels in 2008 and far surpasses solar and geothermal energy.
"The demand (for wind power) is there, but the timing of that demand is variable," said Jason Spadaro, president of SDS Lumber, a family-owned company near the Columbia River that is one of the developers for Whistling Ridge.
Subsidies blow hot, cold
Wind power's explosive growth has been driven, in large part, by federal subsidies. As part of the vote to dodge the "fiscal cliff" this month, Congress extended through this year a production tax credit of $22 per megawatt-hour of wind power.
But lawmakers' support for the tax credits has been unreliable, and the subsidies have lapsed temporarily four times since 1999. Critics call them misguided and too generous, equal to half the wholesale price of electricity in some regions.
Renewal of the production tax credit hasn't been enough to fast-track some proposed Washington wind farms. In Klickitat County, Spain's top power company, Iberdrola, has yet to begin construction on two wind farms, Lund Hill and Juniper Canyon 2.
Paul Copleman, an Iberdrola spokesman, said the company is assessing which of its U.S. projects should proceed first. "Factors like our ability to secure a long-term contract for the power will play a critical role."
That's the same challenge facing EverPower's Coyote Crest, on 3,000 acres of Weyerhaeuser land west of the Cascades.
David McClain, regional director for EverPower, said Coyote Crest's site makes it well suited to match the region's power demand. The wind farm will be at peak production in the winter when most turbine blades fanned by Columbia River winds east of the mountains have slowed down.
Wind-power producers say a more aggressive push by the state to require the use of renewable energy would help.
Washington's Renewable Portfolio Standard mandates large public and private utilities to generate at least 3 percent of their electricity from renewables. That will rise to 9 percent in 2016 and to 15 percent in 2020.
"What is needed is for utilities in the Puget Sound and I-5 corridor area to make additional commitments to renewable energy to go even beyond" state requirements, McClain said.
But there is little urgency to do that for utilities that are far ahead in meeting the renewable standards. Thanks in part to fracking, a controversial method for extracting natural gas from rock pores, natural gas costs about a quarter of what it cost at its peak in summer 2008. As a result, gas-fired power is now mostly cheaper than wind power.