Tax credits, transmission lines considered key for wind farms

May 14 - By Dirk Lammers The Associated Press

SIOUX FALLS, S.D. Companies looking to build large wind farms and the electrical transmission lines to carry the power need more stable tax credits if they're to invest in the alternative energy source, a Department of Energy official said Monday.

A look at money spent each year on wind energy projects during the past decade shows "sort of this boom-bust cycle" as the Renewable Energy Production Tax Credit has been allowed to lapse every one or two years, said Brad Barton, director of commercialization for the DOE's office of energy efficiency and renewable energy.

The tax credit provides an incentive of a 2 cent-per-kilowatt-hour tax credit for renewable electricity production, which makes wind energy more competitive with other forms of energy such as coal, hydroelectric and natural gas.

Extending the PTC through 2012, which was proposed by Sen. John Thune, R-S.D., in a bill introduced earlier this month, would encourage more investment in the natural resource, Barton said.

"Investors hate risk," Barton said during a wind energy round-table in Sioux Falls. "They are looking for ways to invest in a stable environment."

Thune, who hosted the event, said harnessing wind power from rural areas of South Dakota and getting it where it's needed presents many challenges.

"Meeting these challenges will not be cheap. It will not be easy," Thune said. "However, if our nation is serious about energy dependency, we must make a serious national investment."

Barton said wind turbines in South Dakota produce about 44 megawatts of electricity, and another 94 megawatts are on the drawing board. That's a far cry from the 566,000 megawatts of electricity the windy prairies of South Dakota could be producing.

"So we're not even scratching the surface and there's just so much potential and so much opportunity here, and that's what we're trying to get across," Barton said.

The biggest impediment to getting wind power to customers is transmission, said Brian Parsons, wind applications project manager at the National Renewable Energy Laboratory in Golden, Colo.

"To get it from the windy areas to the load center and out-of-state markets is really the critical part," Parsons said. "It's going to make it or break it for wind in South Dakota."

Wind power has grown from almost nothing in 1980 to generating 11,605 megawatts of electricity in the United States in 2006, still less than 1 percent of the national power supply.

It could produce from 2 percent to 7 percent of the nation's electricity within 15 years, according to a new congressionally mandated report.

Wind on the Wires, which works to overcome transmission barriers to bring wind power to market, would like to see the federal government adopt a renewable portfolio standard, said Beth Soholt, the nonprofit organization's director.

Mandating that 15 percent of the nation's energy come from wind by 2015 would be a driver for wind development in South Dakota and across the country, Soholt said.

"A federal RPS is really market driven and it's a very effective way to actually develop a good public policy," she said.