Wind farm development in Illinois, elsewhere likely to slow in 2013

August 19, 2012 by  
Filed under Green Energy News

ROCKFORD — Wind power is the most visible form of electricity generation and only one state, California, made it more visible in 2011 than Illinois.

The Department of Energy said in a report last week that Illinois installed turbines capable of generating 692 megawatts wind power capacity, bringing the state’s capacity to 2,700 MW — enough to power about 680,000 homes. California led the nation with 921 MW of new capacity.

While the DOE expects 2012 to be another strong year for new wind energy, development of wind farms will dramatically slow in 2013. That’s because tax credits that provide wind energy producers 2.2 cents per kilowatt hour expire at the end of the year.

The tax credits have become part of an energy policy debate between Democratic President Barack Obama and his GOP challenger Mitt Romney, which makes the likelihood of an extension before the November election doubtful.

And that uncertainty has taken the wind out of the turbine business.

“With the production tax credit not looking like it’s going to be renewed, wind has really slowed down in the U.S.,” said Mike Reese, sales director for Ingersoll Milling Machines in Rockford.

Ingersoll got into the wind business in 2009 with a $5 million Green Industry Business Development Program through the state, part of the federal government’s stimulus spending.

Ingersoll makes a machine that produces 20,000 pound hubs, parts that connect windmill blades to the turbine. Reese said Ingersoll also makes hubs for large wind turbine manufacturers in Rockford, but those companies have cut production.

“They’re not selling nearly what they were projecting to sell because of the production tax credit drying up,” he said. “It doesn’t make economic sense for that type of power production.”

Mark Bolinger, a Lawrence Berkeley National Laboratory research scientist who wrote the DOE report, said companies have been rushing to beat the Dec. 31 expiration date for the tax credits. That means that new generation capacity will be strong in 2012, but decline precipitously after.

“Given uncertainty over the ultimate fate of that credit, there is no activity being planned for next year or the year after,” said Mark Bolinger, “Everything is on hold.”

While the wind energy business is headed for a stall, analysts don’t think the industry is dead.
Dexter Gauntlett, an energy research analyst with Pike Research, said it’s an election year and renewable energy is seen as an Obama plan.

But 31 states have green energy requirements for utilities. Gauntlett said that makes it more expensive without the tax credits, but it will drive wind development.

“Wind is not going away,” he said. “It’s just a matter of how fast, and how much each year, will be deployed.”

And there is still hope Congress will act.

“The renewable energy production tax credit will be extended but it won’t happen until after the November elections,” predicts Kevin Borgia, public policy manager for the advocacy group Wind on the Wires in Chicago. Borgia oversees the Illinois Wind Energy Coalition.

Borgia said he also hopes Congress will extend the life of tax credits to de-politicize wind energy.

“The wind tax credit is political because it is short term,” he said. It expires every three years and then you have to have political debate. That doesn’t happen with oil, coal and nuclear incentives.”

Brian Leaf: 815-987-1343; bleaf@rrstar.com; @b_leaf

Comments are closed.