Wind Riding Favorable Policy Breeze Toward Record Year

Although only a modest 124 MW of new wind power was commissioned in the U.S. in the first quarter of 2007, the impressive number of projects currently under construction is expected to make this year the biggest one yet by far in terms of new capacity installations. Over 4,500 MW of wind power projects are in the process of being built for completion this year and early next year, according to reports from American Wind Energy Association (AWEA) member companies.

At the end of the first quarter, total installed wind power capacity was 11,699 MW. The fact that the renewable energy production tax credit (PTC) has been available consistently for a number of years is resulting in a smoother production cycle; instead of most of the project commissionings being packed into the last quarter, AWEA expects to see more large projects commissioned by the middle of the year, which will ease the time crunch that transportation and construction companies have experienced in the past.

Here’s a look at how the project picture is unfolding this year across the country.

The state with the most development activity by far is Texas. Over 400 MW have already been commissioned and roughly another 1,000 MW are currently under construction in that state alone. The Electricity Reliability Council of Texas (ERCOT) states in its report Monthly Status Report to Technical Advisory Committee Reliability and Operations Subcommittee for April 2007 that there are over 2,000 MW of new wind power projects with agreements to interconnect this year. Several economic forces are working in Texas’s advantage: the wind resource in many areas of the state is massive, large projects are relatively easy to site, and the market price for electricity is relatively high because it is set by natural gas prices.

Facilities under construction in Texas include: Buffalo Gap Phase II, a 232.5-MW project being developed by AES; Camp Springs, a 130.5-MW facility being installed by Invenergy; Sand Bluff, a 90-MW wind farm being built by Airtricity; Lone Star, a 200-MW project by Horizon; Roscoe, a 209-MW wind farm by Airtricity; Champion, a 126.5-MW project, also by Airtricity; the 60-MW Whirlwind Energy Center by RES Americas; and the 80.5-MW Sweetwater Phase V project by Catamount and Babcock & Brown.

Colorado is also enjoying a great deal of development activity this year. FPL Energy just broke ground on the 400- MW Peetz Table Wind Energy Center project, slated for completion by the end of the year. BP Alternative Energy and Babcock & Brown are in the process of constructing a 300-MW wind farm, which has a chance of being completed by the end of the year as well. PPM Energy is installing the 75-MW Twin Buttes project near the existing Colorado Green project near Lamar. In 2004, Colorado voters approved a renewable portfolio requiring the state’s largest utilities to obtain 3% of their electricity from renewable sources by 2007 and 10% by 2015. If these three projects are commissioned by the end of the year as planned, Colorado will have over 1,000 MW of wind power capacity installed, which would provide about 10% of Xcel Energy’s supply in the state, according to the company.

As for Oklahoma, in addition to the 120-MW Centennial wind project developed by Invenergy that was completed earlier this year, the state may gain a 94.5-MW facility called the Sleeping Bear wind project, which is being developed by Chermac Energy Corp. and financed by Edison Mission Group.

In the past, much of the development in the Midwest has taken place in Iowa and Minnesota, in part because of state regulations that encouraged wind power growth. Development in those states is not slowing down. In Minnesota, over 400 MW are under construction. Horizon is developing the 101-MW Prairie Star project; PPM Energy, the 150-MW Minn-Dakota project partially in Minnesota and partially in South Dakota; and enXco, the 205-MW Fentonwind farm. Meanwhile, over 300 MW of new wind facilities are going into the ground in Iowa, including FPL Energy’s 100-MW Endeavor Wind Project, Midwest Renewable Energy-Iberdrola’s 80-MW Top of Iowa II facility, and the 123-MW Pomeroy project being built by enXco for MidAmerican Energy.

In a change from the past, a number of large projects are spreading out to other states in the region as well. Illinois is seeing major development, including the 80-MW GSG Wind Farm, which is being developed by Babcock & Brown Wind Partners, and Horizon’s 198-MW Twin Groves project. When Twin Groves is complete, it will have two phases with a total capacity of 396 MW. Orion and GE are working on a 150-MW project near Camp Springs, Ill., while up in windy North Dakota, Acciona Energy is reportedly developing a 180-MW wind farm called Tatanka.

Finally, Wind Capital Group’s 56.7-MW Bluegrass Ridge project has recently been commissioned in Missouri, the first utility-scale wind power plant to be built in that state. Two other projects of approximately 50 MW are expected to be completed by Wind Capital Group in Missouri this year. All three-Bluegrass Ridge, Cow Branch, and Conception—will be financed by John Deere Wind Energy.

A number of projects are under construction in Oregon and Washington, and Montana may get another small project by the end of the year. In Oregon, construction is underway at Horizon’s 100.65-MW Elkhorn Valley project and PPM Energy’s 221-MW Klondike III project. In Washington, RES Americas is building the 140.4-MW Marengo Wind Power Project for PacifiCorp and the 204.7-MW White Creek wind farm for White Creek, LLC. In Montana, MDU Utilities has announced that it will build the 20-MW Diamond Willow wind project.

The MidAtlantic region could see nearly 300 MW of new wind power capacity come online this year. In New York, the 20-MW Steel Winds project was commissioned. That project utilizes the first eight commercial Clipper Liberty 2.5-MW turbines. In Pennsylvania, Gamesa is finalizing work on the 80-MW Allegheny Ridge project now owned by Babcock & Brown, and PPM Energy is developing the 34.5-MW Casselman wind farm. Shell Wind Energy and Dominion have broken ground on the 164-MW Shell Mount Storm wind facility in West Virginia.

Positive Impact: Economic Development
Mortenson Construction reported to AWEA that it is working on construction of approximately 1,800 MW that could come online by the end of the year. For those projects, it says that 750-800 of its skilled construction workers are employed this year and that with its subcontractors, the total employed skilled construction workforce for the 1,800 MW could be 2,000-2,300. That figure is for balance of plant construction and turbine erection, but does not include workers from the turbine supplier, the owners, or developers.

According to a letter published recently in an Illinois paper, Marty Vanags, the chief executive officer, Economic Development Council of the Bloomington-Normal (Ill.) Area, the local economy is seeing quite a boost from the construction activity surrounding a large wind farm in the area. Vanags reports that for the Twin Groves project being developed by Horizon Wind Energy, over 300 highly skilled union workers and technicians and construction managers have been employed in the construction of the project. Those 300 workers “spend their dollars here in the form of hotel stays, restaurants, groceries, car repairs, supplies, gasoline and, of course, beer in Merna.” He states that almost 40 ongoing maintenance jobs will be created once the project is complete.

The P factor: Policy Considerations
Several bills that are being considered in Congress in the next few months may have an impact on wind power development, for better or worse. A provision (Subtitle D) in a bill, H.R. 2337, introduced by Chairman Nick Rahall (D-W.Va.) in the House Natural Resources Committee would shut down new development by requiring all new projects to gain certification from the Fish & Wildlife Service, a process likely to take years. AWEA is currently working to ensure that the provision will not be included in the legislation and encourages all AWEA members and other wind power supporters to contact their Congressional representatives. To take action, go to the AWEA legislative action website.

On the positive side, several long-term PTC bills are being considered by Congress. A long-term extension is crucial to sustain the growth in wind power development that the U.S. has been seeing in the past few years. A longer-term extension will reduce costs by allowing companies to plan for growth and to build up the supply chain in the U.S. Another provision that Congress is expected to consider this summer is a national renewable portfolio standard (RPS). Fifty U.S. Senators recently called for a “strong” national RPS, which would provide an incentive to build new wind generation similar to the state-level law that has

Kathy Belyeu is the manager of industry information services for the American Wind Energy Association. Prior to joining AWEA, she had experience researching legislative and regulatory initiatives and writing government affairs reports for a Midwest electric utility and the Washington office of an international utility.

This article first appeared in the May 2007 issues of WindLetter, the monthly newsletter of the American Wind Energy Association. The article was reprinted with permission from AWEA.

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