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Wind industry braces for uncertain future
Credit: By Brett Boese | The Post-Bulletin, Rochester MN | postbulletin.com 27 July 2012 ~~
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The fight over wind energy in Goodhue County is, in many ways, a microcosm of the battle that’s been raging for years in Washington, D.C.
The wind industry is currently holding its breath as federal funding that has supported projects across the country is set to expire in four months.
Wind advocates have predicted dire consequences if a federal production tax credit is not extended. A recent report from Navigant Consulting suggests 37,000 jobs may be lost if the tax credit isn’t renewed, while the industry could create 100,000 new jobs during the next four years if an extension is approved. Gamesa, a Spanish wind turbine manufacturer, recently furloughed 20 percent of its U.S. work force, which a company rep said was directly related to the tax credit’s uncertainty.
Critics contend that the industry has been propped up by tax dollars for two decades and should now either stand or fall on its own merits. One projection says an extension would come with a bill of $4.1 billion over the next 10 years.
Regardless of the outcome, wind industry officials are predicting a rough year in 2013.
The United States is expected to add a record 10.5 gigawatts of wind energy to the grid this year. Most are expecting that number to be chopped in half for 2013, but the American Wind Energy Alliance says it could be cut by as much as 93 percent. Minnesota added 395 megawatts in 2010 and 528 in 2011, but a rep from the Minnesota Public Utilities Commission says that projects totaling just 181 megawatts will seek permits in 2013.
Goodhue County could be hit particularly hard.
Developers of the 78-megawatt AWA Goodhue project have previously said that their financial model for the $180 million development relies upon the tax credit. National Wind also is developing a 300-megawatt project dubbed High Country Energy near Kasson that could be in question. Company officials did not return calls seeking comment.
Geronimo Wind has a smaller wind development planned for west of Goodhue that might also be in jeopardy. Representatives from Geronimo also didn’t return calls.
EDP Renewables, formerly Horizon Wind, is in the planning stage of a huge project that would span four counties – Goodhue, Rice, Dodge and Steele – in southeastern Minnesota.
Adam Renz, an EDP spokesman, confirmed that the project is “in the pipeline,” but noted that it remains years away and could be negatively affected if the production tax credit expires; the southeastern Minnesota project is on page 22 on the company’s project priority list.
“This is really one of the frustrating things with the production tax credit because everything is sort of on hold until the election cycle is over,” Renz said. “… Nothing is really going to be built until that tax credit is renewed. Even if it passes tomorrow, it’s probably not going to get any new projects built until after 2013.”
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