A major wind farm proposed in this state could be scrapped if construction doesn’t get under way this year to qualify the $600 million project for a generous federal incentive set to expire soon.
The federal incentive covers 30 percent of the cost of a wind farm, making industrial-scale wind power competitive with conventional forms of electricity. The project proposed in eastern North Carolina would need to be completed by the end of next year to qualify for the federal rebate, which in this case would be worth about $200 million.
But in order to secure the financing needed to begin construction this year, the 300-megawatt Desert Wind Energy Project wind farm near Elizabeth City needs to have a long-term contract with an electric utility so it can generate revenue by selling its power output to that utility.
If it doesn’t fall through, the Desert Wind project would be one of the largest such projects in the country. The value of the federal incentive would be roughly equivalent to the cost of building a giant 100-megawatt wind farm.
“We would love to secure a power purchase agreement to supply clean, renewable energy to North Carolina,” said Jan Johnson, spokeswoman for Iberdrola Renewables. “But without fast action with the local utilities, the clock will run out on the federal incentives that put renewable energy on the same playing field as other forms of energy.”
Desert Wind, proposed by Spanish energy conglomerate Iberdrola, was approved by the N.C. Utilities Commission last year and received local zoning approval in July. The company expects a permit from the Army Corps of Engineers next month for the 31-square-mile power plant that would generate electricity for at least 55,000 homes.
Iberdrola has been in contract negotiations with Duke Energy for months, but a deal has eluded the companies.
“What we are looking for is wind energy at a price that is cost-effective for the company and our customers,” said Duke spokeswoman Betsy Alley Conway. “If we receive a proposal from developers that is a good value for our customers and our company, we would execute the contract.”
Each of the 150 turbine towers of the Desert Wind project would generate about $6,000 in annual rental income for property owners, mostly farmers, in Pasquotank and Perquimans counties.
The project would be operated and maintained by a full-time crew of about 20 workers, earning an average annual wage of $80,000, Iberdrola has told state officials.
The federal incentive, known as an investment tax credit, requires investing money into the project by year’s end and project completion by the end of 2012. Several extensions have been proposed in Congress to keep wind farms alive but their fate is uncertain in a tight fiscal climate.
A second, smaller wind farm proposed in Beaufort County has raised other concerns. State environmental officials said last month the proposed 80-megawatt Pantego Wind Energy project raises concerns about potential bird kills caused by spinning turbine blades.
The Pantego project, not yet approved by the N.C. Utilities Commission, was originally scheduled to begin construction next year.
The Pantego project would sit near sensitive migratory pathways and foraging areas, posing a danger to flying birds, state officials said. The animals at risk include eastern red bats, hoary bats, tricolored bats, eastern big-eared bats, bald eagles, Tundra swans and snow geese.
State officials have asked Invenergy, the Chicago company planning the Pantego wind farm, to conduct bird flight surveys and submit other data. Officials also have suggested the turbines might have to be taken offline when birds are migrating in the area.
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