COLONIE – Wind energy plans continue to blow away in New York, as the industry faces a glut of cheap natural gas, uncertainty over federal support and dwindling financing. The amount of wind power expected to one day plug into the state’s electrical grid has fallen by more than two-thirds since 2009 as developers shelve projects.
As more power plant owners use natural gas, which is now historically cheap because of the hydrofracking technique used in Pennsylvania and other states to extract it, New York risks becoming “overdependent” on the fuel for its electricity, said Stephen Whitley, president of the New York Independent System Operator.
Whitley spoke Tuesday at the annual meeting of Alliance for Clean Energy New York, an Albany-based lobbying group that represents wind, solar and other alternative energy industries. The ISO is a not-for-profit group that manages the state’s electrical system to ensure there is adequate power to meet demand.
Wind energy projects planned in the state have been dropping steadily since 2009, about the same time that natural gas prices began dropping because of increased hydrofracking.
Last month, ISO tallied 29 wind projects expected to one day connect to the grid, totaling about 2,300 megawatts. That’s a far cry from just three years ago, when ISO counted nearly 9,200 megawatts planned by 70 wind farms. In 2010, that planned figure had dropped to about 7,000 megawatts.
The wind power industry also faces a pending financial storm nationwide because of the looming expiration at the end of the year of the federal Production Tax Credit, which supports wind projects. The Republican House is disinclined to support extending the tax credit.
Whitley said these forces are choking off financial and market incentives to develop more wind projects.
“And it is not just in New York. It is happening everywhere in the country,” he said. “Some people may think that natural gas prices will be cheap forever, but I would not bank on that.”
Last year, gas-fired or dual-fuel power plants, which can burn oil or gas, accounted for nearly 40 percent of all the electricity generated in the state.
Whitley said the current cheap gas prices, if coupled with the demise of the federal tax support, would continue wind’s decline as a potential source of future power in New York.
“I don’t see anything changing that now,” he said.
Since 2009, the state has added only about 140 megawatts of wind power. That is a much slower pace than the four years prior to that, 2005 through 2008, when the state added about 1,100 megawatts.
A megawatt is typically enough to power 1,000 homes, and a typical fossil fuel-fired power plant produces between 350 and 500 megawatts.
ACE Director Carol Murphy said potential overdependence on natural gas to make the state’s electricity means state policy needs to do more to support renewables to buffer against future natural gas prices increases.
The continuing slowdown in the wind market has hurt some related businesses and forced layoffs at such Capital Region companies as AWS Truepower in Latham and Delaney Construction in Gloversville, she said.
Worldwide, investment in wind power and other forms of clean energy was down 20 percent compared with the same time a year ago, blamed in part by a “lull in wind farm financing,” according to a recent report by Bloomberg News.
Overall, wind investment around the globe totaled $15.5 billion, down about 23 percent from the same time a year ago, Bloomberg said. China was the leader in all clean energy investment, at about $14.8 billion. The U.S. was second at about $7.3 billion.