The wind industry’s main trade association is predicting that new installations will fall to zero without a renewal of the production tax credit, which applies only to projects finished by New Year’s Eve. Since renewal is iffy, some wind machine factories are already shutting down, as my colleague Diane Cardwell reported on Friday.
From another perspective, this is the moment for the feast before the famine: the impending deadline means that a surge of projects are approaching completion.
On Saturday, officials will cut the ribbon on what some people say is the largest onshore wind farm in the United States, Shepherds Flat in north-central Oregon. (We will defer to whatever the Guinness Book of World Records decides; the title of biggest depends on whether the Alta Wind Energy Center in the Tehachapi Mountains in California is counted as one project or five.)
The Energy Department puts the capacity of Shepherds Flat at 909 megawatts, although, like most wind farms, it will operate most of the time at a lower output. Its 338 turbines are spread over 32,000 acres just south of the Columbia River, in an area that has already drawn so many wind machines that it often referred to as a “wind ghetto.”
It is a huge project with huge subsidies. The $1.9 billion project was financed with a $1.3 billion loan partly guaranteed by the Energy Department. Prospects for repayment are considered good; the farm has long-term power sale agreements with Southern California Edison.
Google put $100 million into the project. Other major investors include the Sumitomo Corporation and General Electric, which provided the turbines, each of which makes 2.5 megawatts when the wind is strong enough. Running at full tilt, each turbine could meet the average needs of about 2,500 suburban houses.
A study released last year [2008, actually; click here for the 2011 study] by the Energy Information Administration about federal subsidies for electricity production per unit of energy found that during the fiscal year studied, 2007, wind was one of the largest recipients, at $23.37 per megawatt-hour, compared with coal at 44 cents per megawatt-hour, natural gas at 25 cents and nuclear at $1.59.
The American Wind Energy Association said the study was flawed because it failed to look at the cumulative effect of decades of subsidies to incumbent technologies like coal.
The direction of future subsidies is uncertain. But Senator Ron Wyden of Oregon, who is likely to be the chairman of the Senate Energy Committee if the Democrats remain in the majority in that chamber in the next session – or the ranking minority member if they do not – decided to seize on the occasion to signal his support for wind.
In remarks prepared for the ribbon-cutting (but prevented from being delivered live because the Senate stayed in session into Saturday), he said that officials who favor reducing subsidies “want to limit America’s energy options.”
“They want to surrender America’s opportunity to compete in a global market for energy technologies,’’ he said. “They want to deny rural America the opportunity to grow and prosper by harnessing the one natural resource that is in unlimited supply – wind.’’
And American turbine manufacturers like G.E. could not prosper without an American market, he said.
Mitt Romney, the Republican presidential nominee, has come out squarely against continuing the production tax credit. But the issue divides the Republicans, with some from America’s windy, rural middle favoring the subsidy.
Congress did not act to extend the subsidy before it adjourned and its members left Washington to campaign for re-election. They will return in a lame-duck session right after election day, but prospects for wind then are uncertain as well.