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Feb. 5, 2023

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Wind gives Port of Vancouver a lift

Renewal of tax incentives boosts import of parts bound for projects throughout U.S.

By , Columbian Business Reporter
2 Photos
Wind turbines sit on the loop track at the Port of Vancouver's Terminal 5. Thanks to renewed federal tax incentives, imported wind turbine parts are again making stops at the port en route to wind farms around the country.
Wind turbines sit on the loop track at the Port of Vancouver's Terminal 5. Thanks to renewed federal tax incentives, imported wind turbine parts are again making stops at the port en route to wind farms around the country. (Ariane Kunze/The Columbian) Photo Gallery

Wind energy tends to go through cycles at the Port of Vancouver, and right now it’s catching quite the gust.

“We really think over the next three to four years we’re going to have a successful wind business here,” port sales director Steve Mickelson said last week.

Massive wind turbine parts are again moving through the port, from Asia and Europe to wind farms around the country, after Congress renewed tax incentives for wind energy production.

The past few years saw wind component imports drop off as reduced incentives caused energy companies to slow or stop building wind farms. It turns out a little incentive — in this case 2.3 cents per kilowatt hour produced — can go a long way.

“The industry just started to buzz,” Mickelson said. “They went from lethargy to ‘Let’s get at it.’ ”

Windy days at the Port of Vancouver

A by-the-numbers look at wind energy

$1.9 million: Average annual revenue to the port from handling wind turbine components

190: Length in feet of turbine blades bound by truck for Huntington, Ore.

2.3: Cents per kilowatt-hour federal tax credit that got the wind business moving again

20: Percent the tax incentive will drop per year, potentially slowing wind shipments at the port again

It’s hard to say how many local jobs the wind turbine import business supports, said port spokeswoman Abbi Russell. The port’s role is a pass-through from ships to trains or trucks — providing work for Longshore workers and stevedore contractors. It is good for the port’s bottom line, however. Russell said the port has made an average of $1.9 million per year over the past decade.

Eventually the terminal now hosting these future green energy projects will be home to the nation’s largest oil-by-rail terminal, if the state approves the proposal. Though a stark contrast, both are part of the port’s plan to keep cargo diversified.

“We have the capacity to move multiple products, and energy is no different,” Russell said.

With wind, however, the forecast calls for an eventual calm.

Renewed incentives

At the end of 2015, Congress passed an extension to its Production Tax Credit, which gives renewable energy sources a per-kilowatt hour credit for 10 years of energy production.

“The PTC alone has helped to more than quadruple wind power in the U.S. since 2008 and has also helped drive down the cost of wind energy by 66 percent,” according to the American Wind Energy Association.

The credit has actually been around since 1992 in various forms, having been extended and modified nearly a dozen times. A Congressional Research Service report last year showed the average cost of the credit was $1.5 billion a year between 2010 and 2014, the majority of that used on wind projects.

The credit expired at the beginning of 2015, stalling new wind projects, but when Congress re-upped the program through 2020 in December, at least a few companies jumped at the opportunity.

At the Port of Vancouver this year, General Electric, Vestas and Siemens have or are shipping parts bound for wind farms in Illinois, North Dakota and Eastern Oregon. Some of the components are nacelles, which house the energy-producing parts of the turbine, while some are towers and the imposing turbine blades seen coming and going from the port on rail cars and trucks.

“Some blades coming through for Eastern Oregon are over 190 feet long, some of the longest on the market and the longest we’ve moved,” Russell said.

Those blades need to be trucked one-by-one out to Huntington, Ore. — a technical feat, by the sight of it — while components bound for Courtenay, N.D., and Kankakee County, Ill., will travel by rail.

The recent boom is reigniting what was a steady business at the port.

“Of the 141 wind projects either operating, under construction or approved in the Northwest — Washington, Idaho, Oregon and Montana — the Port of Vancouver has handled components for 28 percent of them,” Russell said.

Like those turbines turning in the sky, the wind business at the port may come full circle again. Wind incentives are set to drop 20 percent per year until they expire again at the end of 2020.

“Everyone’s trying to get rolling this year,” said Mickelson, the port sales director. “There were a number of projects stagnant due to tax credits before.”

Growth cycle

Few industries are as stop-and-go, due to tax credit fluctuations, as renewable energy. Solar incentives paid by the state have had a similar effect on personal and community arrays in the past decade, as the right incentive amount can mean a break-even-or-better outlook for a project.

“The program has been so successful that in many utility districts (including Clark Public Utilities) the funding limit has been reached,” according to Puget Sound Solar.

For wind, companies will be racing the clock to start building before the incentive drops a step at the start of each year.

“It takes about nine months for a project to get off the ground, so when or if Congress decides to (extend wind energy credits) it really stimulates that industry,” Russell said. “Year one you climb that hill and years two and three you peak — all other things held the same, that’s how it should work.”

The port has pressed Congress, as part of its lobbying effort, to sustain the incentives for the port’s interest and regional jobs.

“We have the capacity in the Northwest to generate so much capacity through wind,” Russell said. “They’re good jobs at the port as well.”

Even if the oil terminal gets built at Terminal 5, where wind components are being stored at the port today, the business wouldn’t get interrupted by operations there, Russell said.

“We intentionally built the loop track to be able to handle multiple commodities for multiple customers,” she said.

It may feel like yin and yang — fossil fuels and green energy side-by-side at the port — though both would only pass through the terminal.

“It’s an interesting microcosm,” Russell said, “that we are looking at both and can do both.”

Columbian Business Reporter