WIND FARM PLAN RETURNS
Credit: By Thomas Content of the Journal Sentinel,
www.jsonline.com 28 December 2011
A proposal to build a wind farm in western Wisconsin is back despite the opposition of local government officials, who rescinded permits for the project and adopted a moratorium on wind projects.
The proposal from Emerging Energies of Wisconsin was filed with the state Public Service Commission. It’s the first proposal for a large wind farm filed with the state this year.
Hubertus-based Emerging Energies is seeking to build 41 turbines that would generate 102.5 megawatts of power in the Town of Forest in St. Croix County.
The state Public Service Commission has jurisdiction over large wind farms – any project with at least 100 megawatts – and will begin a review of the project.
A dispute over setbacks provided to wind energy projects has led to a stalemate for the wind industry on projects below 100 megawatts.
That stalemate resulted from protests over a statewide rule on wind siting developed last year by the PSC.
Wind opponents, including the Wisconsin Realtors Association, considered the proposal too restrictive on property rights. Last January, Gov. Scott Walker, who was backed by the Realtors in his election campaign against Milwaukee Mayor Tom Barrett, proposed a property rights bill that would require turbines to be located farther from nearby homes.
This fall, the governor’s office and PSC expressed interest in a compromise between wind developers and property rights advocates.
“The PSC is still trying to facilitate a compromise,” agency spokeswoman Kirsten Ruesch said.
No resolution is in sight, though.
Emerging Energies is trying to abide by standards set by the PSC when it approved We Energies’ Glacier Hills Wind Park northeast of Madison, developer Bill Rakocy said. That wind farm began operation last week.
The setback standard requires that turbines be at least 1,250 feet from nearby homes. Unlike Glacier Hills, the Emerging Energies project would not require any waivers to exempt certain turbines from the setback requirement.
Rakocy said his wind project has been in development since 2007.
“We believe that, given the economy we find ourselves in, Wisconsin needs this project to move forward from an economic standpoint and a jobs standpoint,” he said.
The developer is in talks with utilities that would buy the power, Rakocy said.
But local opposition to the project led to the formation of a citizens group, The Forest Voice, and subsequent recall of the entire three-member Forest Town Board earlier this year.
At that time, Emerging Energies was proposing to build four fewer turbines for a project that was under 100 megawatts.
The new town board voted at its first meeting in March to rescind building permits for the wind project and to impose a moratorium on wind power development.
Concerns about the project included the potential for having nearly 500-foot towers in the area.
As a result of the moratorium, the only way for Emerging Energies to build the project was to make it bigger. That triggers state agency review rather than local review.
The PSC has 360 days to rule on the project.
WIND RUSH: 1603 TAX DOLLARS BLOWN IN THE WIND
By Felicity Carus
Published: November 16, 2011
Hundreds of millions of federal dollars from a flagship clean energy grant program were awarded to projects that were well under way before Barack Obama was inaugurated, despite the aim of the 1603 grant program to “primarily” stimulate new projects.
“When the financial crisis hit many developers found that they didn’t have the tax liability that would allow them to claim the credits, so the program was developed to offer an alternative way to continue to incentivize renewable energy development,” a Treasury spokeswoman said. “So, the 1603 program was primarily meant to incentivize new renewable energy projects, but it also supported some existing investments.”
The 1603 grant program was funded through the American Recovery and Reinvestment Act 2009, better known as the stimulus, but was extended for another 12 months last year.
The 1603 “cash” grant program was a payment for “energy property” in lieu of tax credits, such as the Production Tax Credit used mostly in the wind industry, and the Investment Tax Credit used mostly to encourage solar developments. Awards were equivalent to 30% of the project’s total cost placed in service on 1 January or later. At least one payment has been made to a company after it went bust.
As of 31 October 2011, Treasury figures for the 1603 grant show that $8.474 billion of a possible $9.6 billion was split between 22,747 projects. Treasury claims these grants attracted an additional $32.9bn in private and federal investment to fund 14.1 GW-worth of projects, with a total estimated electricity generation of 36.8TWh.
The top 1603 award for any renewable industry went to E.ON Climate & Renewables North America. Treasury documents show that $542.53 million was awarded to E.ON Climate & Renewables North America this September for six projects.
The six E.ON projects to receive the largest combined sum include Stony Creek in Pennsylvania, and Inadale, Pyron, Panther Creek III, and both Papalote Creek I and Papalote Creek II in Texas.
Bankruptcy Is No Bump In The Road
In March 2010, Pattern Energy Group, based in San Francisco, acquired the 283.2 MW Gulf Windenergy project in Texas for an undisclosed sum from Babcock & Brown, which was placed into voluntary liquidation in March 2009.
Pattern Energy Group was a spin out from the Sydney-based global investment firm and purchased the Gulf Wind project as part of Babcock & Brown’s liquidation of assets. But $178 million, the third largest 1603 grant, was awarded to Babcock & Brown in December 2009, four months after it went bust.
But the Treasury still paid out on the award after the company called in the administrators.
“Treasury would only become a creditor if we had to recapture the funds because, for example, the project was abandoned,” said a spokeswoman. “The project was sold to another entity, which is allowed under the Section 1603 program, and is still operating.”
Pattern Energy Group also received two identical 1603 payments of $40.155 million this year for its two Hatchet Ridge wind projects in California.
Last year, Investigative Reporting Workshop revealed that $706 million in federal stimulus money went to wind farms that were completed before President Obama was inaugurated. A total of $1.3 billion went to 19 farms finished before the first dime of stimulus grant money for renewable energy was ever handed out, the report said.
As of October 31, 2011, Treasury records show at least 95 solar and wind projects were awarded grants in 2009, which means it is almost certain that these projects were well under way before Barack Obama introduced the stimulus. Although there is no suggestion of wrongdoing, there is a question of additionality, a clear objective of the stimulus funds.
Stepping In When Banks Falter
But many developers were faced with a finance gap as credit markets dried up from 2008, forcing investors to shy away from the tax-revenue dependent PTC. The funding shortfall in 2008 reveals the precariousness of mechanisms to finance renewable energy projects. Without healthy rates of tax revenue, the industry is at risk of collapse.
Moraine Wind II developed by Iberdrola Renewables, was an example of hundreds of projects that could have collapsed if the government had not introduced the 1603 cash grant.
PPM Energy, a precursor to Iberdrola Renewables, was granted a site permit authorizing construction of the project on 31 July 2007, Minnesota Public Utilities Commission records show. That project was complete by 1 January 2009, and Iberdrola Renewables was awarded $28,019,520 in September 2009.
Jan Johnson, communications director of Iberdrola Renewables, says the 1603 grant arrived just in time.
“It was essential when the 2008 financial crisis wiped out the market for monetizing tax credits,” he said, “leaving wind companies that were in the midst of building multi-million dollar facilities stuck with a decision to shut down construction and lay off workers or continue projects and take huge financial losses.
“Iberdrola Renewables and other renewable energy project developers has reasonably good assurance from the Obama transition team and congressional leaders in late 2008 that Congress would adopt what eventually became the 1603 program.”
Defending The Forward March Of Wind
Developer and manufacturers in the wind industry would also have been badly hit, says Vic Abate, VP of GE Energy’s Renewables business.
“The industry would have come to a screeching halt without 1603. A lot of those projects would never have been built. That would have been much more disruptive in my view to the economy to the industry and to the success of the US in moving forward towards a more independent energy future. 1603 did exactly what it was intended to do. It allowed those projects to keep marching forward.”
The 1603 grant was only seen by the market as a mechanism to promote additionality to the extent that it prevented the industry from grinding to a halt.
“The 1603 was not a new program, it was in lieu of the tax credits,” says Richard Caperton, a senior policy analyst with the energy opportunity team at the Center for American Progress. “These wind farms were already going to get a tax credit but they got a cash grant.
“It was intended to pick up the slack in that industry. A lot of projects get built by selling the tax credit to a tax equity investor and when there are no tax equity investors, the tax credits are worth significantly less so they created the cash grant program to make up for that. It was a well-designed alternative to a tax credit that met a specific need.
You could try to get the general public upset about this, but tax credits and cash grants are economically the same to the government and to the taxpayers.”
THE FEASIBILITY OF 20 PERCENT WIND BY 2030
INSTITUTE FOR ENERGY RESEARCH
Evaluating just the electricity subsidies, wind received more than 7 times the amount of subsidies oil and natural gas received for electricity generation, and more than 4 times the amount of subsidies that coal received. (See chart below.) The disparity gets even larger when evaluated on a unit of production basis. Wind was subsidized over 80 times more than the subsidies for conventional fossil fuels based on a megawatt hour of generation. Wind received $56 per megawatt hour compared to $0.64 per megawatt hour each for coal, and oil and natural gas combined.
LETTER FROM VESTAS: WORRIED ABOUT REGULATION OF LOW-FREQUENCY NOISE
12/16/11 A letter from a turbine manufacturerAuthor: Engel, Ditlev
Dear Karen Ellemann,*
Following previous correspondence, I am writing this letter to express my concern regarding the limits for low frequency noise from wind turbines now being proposed.
Back in January 2011 we applauded your announcement of the new regulations regarding low frequency noise and the fact that you also then emphasised that those regulations would not be tightened and that it was a question of improving the security in connection with the installation of wind turbines. Accordingly, the reaction from the industry branch back in January 2011 was positive, although as an industry we were uneasy about having heavier demands imposed on us than other industries.
When the new regulations were then published on 26.05.2011, we were of course convinced of your initial point of view. As a result, we were extremely surprised to find that the proposed new regulations do in fact include a significant and severe tightening of the previous noise regulations.
In fact, according to our analyses, the most economical turbines, the 3 MW category, are the ones that will be strongly affected by the new rules. This applies to open terrain in particular, where in future low frequency noise will dictate and increase the distance requirements to neighbours for close to half of the projects that we are already aware of over the next 2 to 3 years.
In a small country such as Denmark this means that a significant number of projects will not be viable as the increased distance requirements cannot be met whilst maintaining a satisfactory business outcome for the investor.
The Danish market for wind turbines is of minor importance for Vestas in terms of sales, typically less than 1% of our sales per year. However, the Danish market provides a number of other functions for Vestas which are of considerable value from a business point of view. By means of its high wind penetration, 24% in 2010 – still a world record – Denmark has a role as a forerunner country and a full scale laboratory for conversion to renewable energy.
This means that other countries often look to Denmark when adjusting their legislation regarding wind energy. We are therefore concerned – justifiably so as history shows – that the proposed Danish regulations for low frequency noise from wind turbines will spread to a large number of other markets with much higher commercial impact for Vestas and consequently for employment in the business.
The Danish wind turbine industry employs approx. 25,000 people in Denmark and boasts an export which is about 8.5% of total Danish exports. Such “over-proportional” presence has become possible because Denmark has been able to create the conditions for good correlation between demonstration, education and industry research and development. In reality we fear that the demonstration element will suffer irreparable damage as a result of the new regulations regarding low frequency noise. When combined with the imminent danger that important markets will copy the new Danish regulations, I consider the new regulations to be extremely damaging to the prospects of further popularisation of land-based wind energy.
At this point you may have asked yourself why it is that Vestas does not just make changes to the wind turbines so that they produce less noise? The simple answer is that at the moment it is not technically possible to do so, and it requires time and resources because presently we are at the forefront of what is technically possible for our large wind turbines, and they are the most efficient of all.
In the light of this it seems strange that the wind turbine industry is being discriminated against compared to other industries. All other industries are subject to differential noise requirements regarding low frequency noise for night and day (20, respectively 25 dB), whereas the wind turbine industry are subject to requirements of 20 dB 24 hours a day.
The proposed low frequency limit values may hinder the development of onshore wind in Denmark, including meeting our commitments in relation to the EEC. Ultimately, we consider there is a danger that the regulations will be copied by other countries and accordingly this will provide an obstacle to the popularisation of wind energy at a global level. Both issues will damage Vestas as a business, including affecting Danish activities.
Vestas Wind Systems A/S
Chief Executive Officer
Alsvej 21, DK-8940
Dir. +45 9730 0000, www.vestas. com
A copy of this letter was sent to Lykke Friis, Minister for Climate and Energy
*Karen Ellemann, Minister of Environment
Department of Environment
Højbro Plads 4
1200 Copenhagen K
Randers, 29 June 2011/erlgs
Translated from Danish by Bente H. Sorensen, Translationz.com.auWIGGY: NO FAN OF WIND FARMS
By James Wigderson
Special Guest Perspective for the MacIver Institute
A new wind farm is complete in Columbia County and it will soon be killing more birds than a Sarah Palin Thanksgiving photo op. Or, for you heavy metal fans, more mosquito-eating bats than Ozzy Osbourne ever killed.
It’s the largest wind farm in Wisconsin, 90 turbines spread over 17,000 acres of farmland. It is expected to generate 162 megawatts of electricity, enough to power 45,000 homes.
WE Energies was expected to spend $363.7 million on the project, although it appears to have come under the target set by the Public Service Commission. Of course, the over $300 million in cost will soon be passed on to electricity rate payers as soon as 2013.
To be fair, WE Energies did not build the wind farm because it hates birds, bats or ratepayers. Nor did it build the wind farm because the company wanted to build a giant ice ball thrower.
And it certainly did not build the windmills because wind energy is cheaper than the alternatives. Because it is not.
The wind farm was built as part of a plan to increase WE Energies “renewable energy” portfolio. The company is mandated by the state of Wisconsin to increase its use of renewable energy sources from less than three percent of the electricity generated by WE Energies to 8.27% by 2015.
The mandated renewable share of total generation must be at least 6 percentage points above the average renewable share for WE Energies from 2001 to 2003. It’s part of a statewide renewable energy mandate of 10% by 2015.
Wind power is the most popular choice for filling the renewable energy mandates as it is closer to coal-generated electricity than other forms of renewable energy. However, wind is still unreliable in capacity because wind, while free fuel, is unreliable in providing a steady quantity, especially at peak demand times. As a previous report by the MacIver Institute has shown, Wisconsin is not even a good candidate for windmill siting, increasing the unreliability of wind power for our state.
Ironically, according to one environmentalist group, Clean Wisconsin, the windmill farm may not even further the goal of the renewable energy mandate, reducing greenhouse gas emissions, because WE Energies will still be reliant upon the coal-burning power plants for primary electrical generation.
Because wind is not a reliable source of energy here.
Renewable energy does not come cheap. If renewable energy were cost competitive, power companies and energy consumers would not need a mandate to prefer renewable energy sources over coal, oil and natural gas.
As the U.S. Energy Information Agency indicates in its 2011 Annual Energy Outlook projections, coal is already dropping as a share of the nation’s energy mix. However, it is naturally occurring due to the lower costs of natural gas generated electricity, including lower infrastructure costs.
The growth in renewable energy as a percentage of the nation’s energy portfolio (to 14% by 2035) is because of state renewable portfolio standard (RPS) requirements and federal tax credits.
It could be even worse. During the last session of the legislature, Wisconsin narrowly avoided imposing a new renewable energy mandate of 25% by 2025. Bipartisan opposition to the mandate, largely due to the weak economy, prevented its passage.
But as we have seen, the desire of the government to support a so-called green economy continues despite the costs to the public. Perhaps we can expect Department of Energy bureaucrats to tour the new windmill farm in new Chevrolet Volts.
Somebody has to buy them.
After all, President Barack Obama’s administration set a goal of one million electrified vehicles (including advanced hybrids) on the road by 2015. So far the Chevy Volt is going to fall short of the company’s goal of 10,000 vehicles sold by the end of this year, and USA Today reports interest in electric vehicles is declining.
After $3 billion in subsidies, Americans are showing that the only silent vehicle that doesn’t consume gas in which they have an interest is Santa’s sleigh at Christmastime. Good thing he managed to avoid the new windmill farm… this year.