Wind-power talked up, but bill fades

The bill would have allowed utilities to seek recovery of certain costs of renewable energy from ratepayers.

Brian Donahue, an attorney for Arkansas Electric Energy Consumers, which opposed the bill and represents some of the largest electric users in the state, said the bill would shift the risk of developing renewable energy projects from private developers to consumers.

“[The state’s utilities] would pass the cost of that energy on to their retail customers,” said Donahue, who told the committee that renewable energy is much more expensive than conventional power.

Solar energy costs 39.6 cents per kilowatt hour, while the average price of electricity generated in Arkansas is now 7.62 cents, Donahue said.

But Ralf Sigrist, chief executive of Chicago-based Nordex USA, which has a manufacturing plant in Jonesboro that makes wind turbine components, said he has heard the cost argument before. Speaking at the industry conference, Sigrist said the price of energy from traditional sources is low only because Arkansas is using old production facilities.

Once those sources can no longer supply enough power, wind becomes much more competitive, Sigrist said. Factoring in the cost of new facilities, only natural gas is cheaper than wind nationwide, he said.

More than 250 people attended the industry conference at the Peabody Little Rock hotel. The conference was organized by the American Wind Energy Association of Washington, D.C.

Arkansas in recent years has attracted several parts manufacturers for the industry, including LM Wind Power of Lunderskov, Denmark, which operates a blade factory in Little Rock, and Nordex USA, a subsidiary of a German company, which opened its factory in Jonesboro last year.

In Fort Smith, construction began in October on a $100 million Mitsubishi plant that assembles wind-turbine enclosures, or nacelles. BeckmannVolmer of Germany is building a facility in northeast Arkansas to make turbine components.

Several workshop speakers called for a long-term, more consistent federal policy toward renewable energy.

A federal production tax credit for the wind industry has been phased out three times in the past decade, and will expire again at the end of 2012, said Tom Maves, an official for the wind energy association.

Each time the credit expired, activity in the industry fell, he said. In 2000, 2002, and 2004 – years that followed an expiration – the industry installed between 77 percent to 93 percent fewer megawatts of capacity than a year earlier, the association said. Gov. Mike Beebe, speaking at the conference, said the wind industry butts up against an inconsistent national policy, which stifles economic development.

Proponents of the industry, he said, need to emphasize that wind power leads to a cleaner environment, more jobs and stronger national security. He said it’s better when the country isn’t dependent on energy from “people who don’t like us.”

“If somebody doesn’t respond to one of those three things, I don’t think they’re human,” Beebe said.

More than 400 manufacturing plants serve the wind industry in the United States, speakers said. Compared with current demand, the industry nationwide suffers from excess production capacity, several speakers said.

The wind industry in 2010 installed capacity of 5,112 megawatts, about half of the previous year, according to the association. This year should be stronger, with 5,600 megawatts under construction at the outset, Maves said.

Current conditions in the U.S. industry are a “mixed bag,” with some still laying off workers and others, like Nordex, rebounding, said Dan Shreve, director of Make consulting, which specializes in renewable energy.

Amid slower demand, the industry has been consolidating and innovating, making larger and taller turbines that can be installed in locations with less wind, speakers said.

Other trends are for lighter and longer blades, and the benchmark 1.5-megawatt turbine is moving to a 2-megawatt turbine, said Richard Pettifor, commercial director for LM Wind Power in the Americas.

Pettifor said LM expects demand in the industry to rise this year and in 2012, although it’s uncertain of what will happen after the production tax credit expires at the end of that year.