As the rest of the world prepares to toast the new year, the wind industry is hard at work on its own year-end tradition, rushing to make sure projects qualify for an important subsidy before it is set to vanish at the stroke of midnight on Tuesday. Developers are signing deals, ordering equipment and lurching ahead with construction starts to qualify for a tax credit that is worth 2.3 cents a kilowatt-hour for the first 10 years of production. This month, giant turbine-makers like Vestas and Siemens have announced major new orders, including a deal worth more than $1 billion with MidAmerican Energy, an Iowa-based utility majority-owned by Warren E. Buffett’s Berkshire Hathaway, and another with the Cape Wind project in Nantucket Sound.
Berkshire Hathaway’s MidAmerican Energy subsidiary just bought over 1 gigawatt (GW) of wind turbine capacity from Siemens (NYSE: SI ) . Construction sites across Iowa are linked to MidAmerican’s expansion and reconductoring of its transmission system. MidAmerican Energy bought 448 turbines for an undisclosed price. Current installed capacity cost for wind turbines is about $2,000 per kilowatt (kW.) The total price tag could exceed $2 billion, and this is reputedly the largest wind turbine order to date.
It’s tax extender time. This year, Congress let about 55 different tax breaks expire on Dec. 31. The full array includes everything from a credit for corporate R&D to tax relief for underwater homeowners. The list also includes a batch of energy tax breaks, such as a credit for wind farms that generate electricity or a deduction for commuters who take the bus to work. Those are now gone.
Baucus’ impending exit also likely leaves tax reform in limbo for the coming year, although Wyden could draw on some ideas from the outgoing chairman’s radical proposal to replace more than 40 energy-related incentives with a trio of tax credits to promote “clean” fuels, low-emissions electricity, and carbon capture and sequestration. More pressing, though, will be the fate of more than a dozen temporary breaks, such as the production tax credit, that expired Dec. 31 and that Wyden has said should be renewed posthaste. House Republicans, by contrast, have shown little enthusiasm for dealing with these provisions, known as “tax extenders,” which encompass incentives for industries throughout the economy.
In exchange for the right to kill eagles, a San Diego-based wind developer offered to retrofit 75 power poles to reduce eagle deaths near California’s Lake San Antonio, prime winter habitat for the iconic birds. Another California developer agreed to upgrade 11 “problem” power poles, idle certain wind turbines and donate $20,000 for eagle conservation.
The law, passed under former Democratic Gov. John Baldacci, set aggressive goals for adding wind power while simplifying the regulatory process in much of the state. Current Republican Gov. Paul LePage has been a wind-power critic, but Ms. Williams said wholesale changes have been a tough sell under both Democratic and GOP control. There have been efforts to rein in wind-farm development on the edges. Mr. Dunphy sponsored a bill this year that he said would give some sparsely populated unorganized territories, which lack local government, more say over wind projects. The proposed change didn’t make it through the Senate, but Mr. Dunphy is continuing the push with the governor’s support.
Vestas Wind Systems is continuing its recent run of customer orders, with an announcement Monday that the Danish manufacturer will supply 75 wind-power turbines to a company called First Wind for a wind farm in Texas. Vestas said its four Colorado plants will be involved in the order — making blades, nacelles and towers for First Wind’s Route 66 wind farm near Amarillo, Texas.
Cape Wind Associates said Monday that it has finalized a major deal with the German conglomerate Siemens AG to buy giant turbines, the offshore transformer, and maintenance services for its planned multibillion-dollar wind farm in Nantucket Sound. Jim Gordon, president of Cape Wind, described the agreement as one of the last major steps toward getting the 130-turbine wind farm built and running after 12 years of acrimonious debate over building such a project off the coast of Cape Cod. It could also prove key to securing hundreds of millions of dollars in federal investment tax credits, which are critical to Cape Wind financing the $2.5 billion project.
A rush by wind farm developers to beat an end-of-the-year deadline to qualify for a federal renewable energy tax credit is translating into a crush of orders for wind turbines made by Vestas Wind Systems, which has four factories in Colorado. Vestas on Friday reported it had locked in a firm order for 110 turbines, capable of generating 220 megawatts of electricity, from EDF Renewable Energy for two wind-energy projects in Texas. EDF is the North American renewable energy arm of French power company Electricite de France SA.
Snyder in November 2012 delivered a special message on energy and the environment. He called for a one-year study after voters rejected a ballot proposal that would have amended the constitution to require Michigan utilities to derive at least 25 percent of their annual electric retail sales from clean renewable sources by 2025. The Michigan Energy Office and Michigan Public Service Commission held seven public forums and submitted four reports to the governor. One of the reports found that it’s theoretically feasible for Michigan to achieve renewable energy standards as high as 30 percent by 2035. Snyder said that he wouldn’t push for 30 percent by 2025, but prefers to set “a reasonable range.”