This piece comes to us courtesy of Stateline. Stateline is a nonpartisan, nonprofit news service of the Pew Charitable Trusts that provides daily reporting and analysis on trends in state policy.
Iowa’s vast crop of wind turbines is about to grow even larger.
Last month, the state’s largest energy company, MidAmerican Energy, announced it will add more than 650 turbines to Iowa’s wide open spaces by 2015. (See infographic)
Republican Gov. Terry Branstad touted the $1.9 billion project as the “largest economic development investment in the history of the state.” MidAmerican Energy is owned by billionaire businessman Warren Buffet, who is betting big on renewable energy.
Iowa is already a U.S. leader in wind energy production, thanks largely to a wind-friendly legislature, lack of local opposition and, of course, plenty of strong breezes.
Though Texas dwarfs other states in total megawatts produced, the much smaller Hawkeye state ranks first in the total share of wind energy it generates. (See table)
In 2012, wind accounted for nearly a quarter of Iowa’s energy portfolio—24.5 percent--up from 19 percent the year before, according to U.S. Energy Information Administration data. Only neighboring South Dakota, at 23.9 percent, comes close.
The new MidAmerican turbines will likely tip the scales even more. This project alone will add as much as 1,050 megawatts, equal to about a fifth of Iowa’s wind generation in 2012.
The news comes at a turbulent time for the wind industry. Just months ago, turbine manufacturers in Iowa and elsewhere laid off hundreds of workers, even though wind projects saw record growth across the country. New wind generating capacity trumped even surging natural gas.
The wind industry now generates just 3.5 percent of the country’s energy. As of March 31, slightly over 500 megawatts of projects were under construction, mostly in Plains states, according to the American Wind Energy Association. That’s a fraction of the 8,900 megawatts in progress across 31 states last year.
The industry, however, expects development to ramp up in the coming months. Experts peg the boom-and-bust almost exclusively to uncertainty over federal policy. At issue is the Wind Production Tax Credit, a subsidy of 2.3 cents a kilowatt-hour for electricity generated over a wind farm’s first 10 years of operation.
Wind farms use the credit, passed by Congress in 1992, to stay competitive with other energy sources, including low-priced natural gas. Without it, the industry can’t keep pace, even though production costs are falling.
New wind proposals screeched to a halt near the end of 2012 as a gridlocked Congress debated whether to renew the multi-billion dollar credit. It was set to expire at the end of the year, and Congress approved it at the last minute. The Joint Committee on Taxation calculated the cost at $12.1 billion over 10 years.
Fiscal hawks argued the country couldn’t afford it. But windy state governors, like Branstad, pushed hard for renewal, acknowledging the incentives may need to be phased out or restructured over time — a possibility many in the wind industry support.
“It’s really hard to be able to invest millions of dollars in capital and labor without being able to ensure what the market will look like,” said Harold Prior, head of the Iowa Wind Energy Association.
Those efforts to keep the credit were successful, but only after many wind projects began to ratchet down. Industry members say they are only now recovering. Though new proposals are coming in, it’s taking turbine manufacturers a few months to catch up.
Because Congress extended the credit only for a year, wind supporters are preparing for another fight on Capitol Hill. They do have some extra time, however, because developers can now claim the credit for projects that are only partially complete. Under the previous rules, projects had to be running by the deadline for companies to claim the credit.
Still, the uncertainty rankles wind-backers like Prior.
“It should be a time of optimism in our industry, but because there’s a lack of consistent federal policy, there’s pessimism,” he said.
In Colorado, where more than 11 percent of energy came from wind last year, wind companies may have a reason for optimism. A bill on Democratic Gov. John Hickenlooper’s desk would more than double the state’s renewable energy mandate for rural electric cooperatives. The legislation would require 25 percent of their energy sales by 2020 to come from renewable sources, boosting business for the wind and solar companies.
Andrew Longeteig, a spokesperson for Vestas, an international turbine producer with a major hub in Colorado, said the new policy would be good news for his company, which significantly downsized in 2012’s waning weeks. It is now hiring more than 100 new workers at a plant in Pueblo.
States’ renewable energy requirements and other incentives also have helped drive the wind industry’s growth.
Nebraska’s legislature last month overwhelmingly approved a sales tax exemption aimed at boosting the windy state’s meager output. Though the state ranks fourth in wind-energy potential, it is in the middle of the pack in production.
Republican Gov. Dave Heineman has criticized the legislation, which is expected to interest a Kansas-based company in building a wind farm in Nebraska’s northeast corner. In March, he called it a “misguided” attempt to cater to “out-of-state special interests.”
Critics of wind-energy incentives say government shouldn’t prop up the emerging industry, particularly when natural gas prices, though recently rising, have stayed relatively low.
Some energy experts, however, say that wind could help keep costs low in the long term because it does not depend on a volatile fuel input.
“Wind’s hedge value is as important today as it has ever been,” wrote Mark Bolinger, a research scientist at Lawrence Berkeley National Laboratory, in a March paper. “Despite the current low gas price environment, wind power can still provide a useful hedge against rising natural gas prices, particularly over the long term.”
Investors such as Buffett seem to think investments in wind and other renewables will pay off down the road. In his 2012 letter to shareholders, Buffett noted that MidAmerican, which operates in 10 states, accounts for 6 percent of the country’s wind generation capacity and will soon own 14 percent of U.S. solar capacity.
“We are the leader in renewables,” Buffett wrote.
Also on HuffPost:
Renewable energy made up 9 percent of all energy consumed in 2011, according to the <a href="http://www.eia.gov/">U.S. Energy Information Agency</a>, and that number is <a href="http://www.eia.gov/forecasts/aeo/er/pdf/0383er(2013).pdf">predicted to grow throughout the next decade</a>. Here's a breakdown of the top sources of renewable energy in the country, from wind to water and everything in between. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Solar power and photovoltaic cells make up the smallest percentage of U.S. renewable energy production, but its future looks fairly promising. Warren Buffett's Berkshire Hathaway <a href="http://www.huffingtonpost.com/2013/01/03/warren-buffett-solar-power_n_2398816.html">invested $2.5 billion in Calif. solar company SunPower</a> earlier this year. Also, unlike other sources of renewables, energy can also be generated by small-scale solar installations (like on the rooftop of a home or business), and<a href="http://www.eia.gov/todayinenergy/detail.cfm?id=8570"> declining costs</a> have made solar much more affordable. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Geothermal power captures naturally occurring heat from the earth to turn it into power. The renewable source is geographically dependent, <a href="http://www.eia.gov/todayinenergy/detail.cfm?id=3970">but the Western half of the U.S.</a> has many promising locations for power plants, <a href="http://www.geysers.com/">like The Geysers in Calif.</a>, the largest geothermal power plant in the world. The U.S. is the largest producer of geothermal power on the planet, but growth hasn't kept up with wind or solar development in recent years. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Believe it or not, burned garbage accounts for 5 percent of all renewable energy created in the U.S. each year. More than 29 million tons of municipal solid waste was burned in 2010 to create steam to spin turbines and generate power, <a href="http://www.eia.gov/todayinenergy/detail.cfm?id=7990"> and there are more than 75</a> waste-to-energy plants in the country. Emissions regulations have been in place at waste incineration plants since the 1960s, but the <a href="http://www.epa.gov/ncer/publications/research_results_needs/combustionEmmissionsReport.pdf">EPA warned in a 2006 report that the toxins released</a> during the process could pose a serious environmental risk if not strictly enforced. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
The amount of wind power has grown for each of the past three years throughout the U.S. and accounted for the <a href="http://www.eia.gov/todayinenergy/detail.cfm?id=9931">largest growth in capacity</a> of any energy resource in the country last year. Wind turbines now supply more than <a href="http://www.reuters.com/article/2012/10/19/us-utilities-windpower-usa-idUSBRE89I0TX20121019">50,000 megawatts a year,</a> enough to power 13 million homes, according to Reuters. Federal tax credits, which were set to expire at the end of 2012, have made wind farms an attractive form of renewable energy. Congress <a href="http://www.forbes.com/sites/davelevitan/2013/01/02/wind-power-tax-credit-survives-fiscal-cliff-deal/">approved an extension of the credits</a> through the end of 2013. After production, wind turbines are net zero, meaning they require no energy and produce no emissions. The only problematic thing generated in some cases other than clean power has been <a href="http://www.huffingtonpost.com/2011/05/24/wind-power-noise-pollution-maine_n_866182.html">a whole lot of noise</a>. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Biofuels, like ethanol, are created from organic matter like corn or soybeans. Gasoline in the U.S. contains 9 percent of the resource by federal mandate under the <a href="http://www.epa.gov/otaq/fuels/renewablefuels/index.htm">Renewable Fuel Standard program,</a> and more than <a href="http://www.huffingtonpost.com/2012/08/10/us-should-change-biofuel-_n_1764735.html">40 percent of the corn crop</a> last year was turned into biofuel. The resource is slightly more unstable than other renewables because it depends on the productivity of farms - <a href="http://www.huffingtonpost.com/2012/08/10/us-should-change-biofuel-_n_1764735.html">drought or other environmental problems</a> can significantly lower yields and increase prices. On average, <a href="http://www.afdc.energy.gov/vehicles/flexible_fuel_emissions.html">ethanol has 20 percent fewer emissions</a> than traditional gasoline but some types, like <a href="http://en.wikipedia.org/wiki/Cellulosic_ethanol">cellulosic ethanol,</a> cut greenhouse gas emissions more than 85 percent, according to the U.S. Department of Energy. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Timber accounts for nearly a quarter of all renewable energy created in the country. <a href="http://news.nationalgeographic.com/news/energy/2012/10/121022-wood-for-heating/">Rising energy costs </a>have led to an upswing in wood burning over the past decade, and nearly <a href="http://www.eia.gov/forecasts/steo/report/winterfuels.cfm">20 percent of New England homes </a>use wood for heating, according to a National Geographic report. Although it may be a cheaper alternative, wood burning stoves and fireplaces<a href="http://www.epa.gov/burnwise/energyefficiency.html"> release more emissions of fine particles </a> than other home heating methods, according to the EPA. Burning <a href="http://www.epa.gov/burnwise/bestburn.html">good wood in an efficient burner</a> lowers toxic emissions and lost energy. Oh, and always have working smoke and carbon monoxide detectors handy. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Almost all of the current hydroelectric power plants in the U.S. were <a href="http://www.eia.gov/energy_in_brief/article/hydropower.cfm">built before the mid-1970's</a>, but it's still the highest producing renewable energy source in the country. In 2011, 8 percent of all power created in the U.S. came from hydroelectric sources, but it's also one of the most geographically dependent sources of energy. The Pacific Northwest gets more than half of all power via hydroelectric due to prime geography. <em>Information courtesy of the <a href="http://www.eia.gov/totalenergy/data/annual/perspectives.cfm">U.S. Energy Information Agency</a>.</em>
Watch this TED talk on the missing link in the future of renewable energy.