An Industry’s Future, Blowing in the Wind

Source: By MATTHEW L. WALD, New York Times • Posted: Monday, December 31, 2012

Iberdrola's new Manzana wind installation in Rosamond, Calif., went online last week, just in time to capitalize on the federal wind production tax credit.

J. Emilio Flores for The New York TimesIberdrola’s new Manzana wind installation in Rosamond, Calif., went online last week, just in time to capitalize on the federal wind production tax credit.

As I note in Friday’s paper, construction of new wind farms is going to grind to a halt with the end, at least temporarily, of the wind production tax credit. What’s next?

The credit is worth 2.2 cents per killowatt-hour generated, beyond whatever the electricity can be sold for on the regional market. At some hours of the day, most or all of the revenue will come from the tax credit.

Without the credit, wind farms could still be profitable if they were built where the wind is strongest, according to Robert W. Thresher, a research fellow at the Energy Department’s National Renewable Energy Laboratory in Golden, Colo. But the trend lately, he said, has been to move to somewhat less favorable sites because the best ones within connection distance of the grid have been used up.

That has meant an evolution in wind machines, Dr. Thresher said. Newer ones built in places with weaker wind are as tall as 100 meters (328 feet) with the aim of catching more energy; they also have bigger rotors so that at lower wind speeds they can still develop the torque necessary to turn a generator. But longer blades and higher towers are more expensive. In Europe, he said, some developers have even moved to towers 120 meters (394 feet) high.

But the other way to lasso more energy, he said, would be to extend and strengthen the power grid. Some of the places with the best wind are in rural areas with little or no transmission capability, he noted, and a stronger and more reliable grid would allow wind energy producers to sell electricity where prices are highest. The strongest wind is in the Midwest, and the highest prices are commanded on the East and West coasts, Dr. Thresher noted.

For the time being, though, developers seem likely to wait for the outcome of a debate in Congress over whether to revive the production tax credit. Taxes in general, of course, are on the table as part of the “fiscal cliff” budget negotiations, and no one is sure what will emerge from that process.

At the moment, many members are still at home, poised to return if a deal is struck. January seems more likely, though.