Wind power industry surges, and expects steady growth

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Wind power industry surges, and expects steady growth

January 28, 2016

The nation’s wind-power industry is anticipating strong sailing ahead — even in Minnesota where it’s been in a lull.

The American Wind Energy Association, the industry’s Washington-based trade group, on Wednesday reported that 2015 was its third-best year because of major expansions especially in Texas, Oklahoma, Kansas and Iowa. In a major shift, Iowa leapt ahead of California as the No. 2 wind-power state.

Industry officials are projecting continued expansion — wind now supplies 4.5 percent of U.S. electricity — thanks to the recent five-year extension of federal tax credits, declining equipment costs and steady demand from utilities shifting away from carbon-intensive coal burning under the federal Clean Power Plan.

“We are very optimistic right now about the wind energy industry, and renewables in general,” said Shanelle Montana, a Minneapolis-based project developer for EDF Renewable Energy, a unit of the French power company that has developed 10 wind farms in Minnesota and has more in the pipeline.

The wind industry’s upbeat outlook comes at a time when the coal, crude oil and natural gas sectors are hurting because of low prices, oversupply and other factors, triggering layoffs, losses and bankruptcies.

Minnesota is a pioneer in wind energy. The state gets 15 percent of its power from wind, ranks seventh among states for total capacity and is home to Xcel Energy, the nation’s leading wind-power utility. Yet only two wind farms have been finished in the state since 2012, including the 200-megawatt Pleasant Valley wind farm near Austin, Minn. Xcel took ownership of the project in December.

The lull in Minnesota is about to end, and industry officials project broad expansion across the country for several years.

“We expect the strong activity to continue to gain momentum,” Hannah Hunt, a senior research analyst for the trade association, said on a conference call with reporters.

Industry officials said a major driver is the federal tax credit for wind energy, which Congress extended for five years in the December budget deal. The credit, which can be taken up front over time, is for 30 percent of a project’s costs, although the subsidy declines for projects launched later in the five-year period.

Doug Fredrickson, vice president of operations for Avon, Minn.-based Blattner Energy, a leading wind farm contractor, said the five-year tax credit extension will be instrumental in making wind a competitive energy source. In the past, Congress has authorized the credit benefit for shorter periods, and at times let it expire, grinding the industry nearly to a halt.

SOURCE:  Star Tribune

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