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Wind industry banks on tax credits

With economic breezes no longer at its back, Iowa's wind energy industry hopes the three-year renewal of federal tax breaks will regenerate the momentum that has made Iowa the nation's second-largest wind producer. "The renewals of those tax incentives will be a huge help to us," said Estherville insurance man Al Blum, who is putting together wind farm projects in Emmett and Dickinson counties.

Estherville, Ia. -- With economic breezes no longer at its back, Iowa's wind energy industry hopes the three-year renewal of federal tax breaks will regenerate the momentum that has made Iowa the nation's second-largest wind producer.

"The renewals of those tax incentives will be a huge help to us," said Estherville insurance man Al Blum, who is putting together wind farm projects in Emmett and Dickinson counties.

Blum's project will depend on financing from Edison Mission Group of California, which will supply the capital investment in return for the federal tax credits.

T.J. Tuscai, senior vice president for NextEra Energy Resources of Florida, said the tax credits are absolutely crucial. "Previously, the credits were extended year to year. Now, we have a three-year renewal and that will unlock investment."

Tuscai was in Story City last week to help Gov. Chet Culver and others break ground for NextEra's equipment repair shop, which will employ 25 mechanical engineers. The location will serve not only the 539 turbines NextEra has in Cerro Gordo, Hancock and Story counties but also turbines in the 16 states where the FPL subsidiary has wind farms.

NextEra is seeking sites for... more [truncated due to possible copyright]  

Estherville, Ia. -- With economic breezes no longer at its back, Iowa's wind energy industry hopes the three-year renewal of federal tax breaks will regenerate the momentum that has made Iowa the nation's second-largest wind producer.

"The renewals of those tax incentives will be a huge help to us," said Estherville insurance man Al Blum, who is putting together wind farm projects in Emmett and Dickinson counties.

Blum's project will depend on financing from Edison Mission Group of California, which will supply the capital investment in return for the federal tax credits.

T.J. Tuscai, senior vice president for NextEra Energy Resources of Florida, said the tax credits are absolutely crucial. "Previously, the credits were extended year to year. Now, we have a three-year renewal and that will unlock investment."

Tuscai was in Story City last week to help Gov. Chet Culver and others break ground for NextEra's equipment repair shop, which will employ 25 mechanical engineers. The location will serve not only the 539 turbines NextEra has in Cerro Gordo, Hancock and Story counties but also turbines in the 16 states where the FPL subsidiary has wind farms.

NextEra is seeking sites for another wind farm, most likely in Hardin County, Tuscai said.

Mike Tramontina, Iowa Director of Economic Development, said: "Throughout the history of wind generation, it is a simple fact that when the tax credits are in place, wind energy grows. When they're not, wind stalls."

Bob Loyd, manager of Clipper Wind's Cedar Rapids turbine factory, said at the annual meeting of the Iowa Wind Energy Association in Estherville that it will take several months before the rules are written and the details of the tax credits and the stimulus package are ironed out.

Clipper laid off 90 workers, most of them at its Cedar Rapids plant, in January when projected orders for turbines fell from 450 to about 200.

"The whole wind industry is driven by capital," Loyd said. "The economic downturn of the last six months has been very hard on the industry."

Clipper wasn't the only Iowa victim of the downswing. Acciona Windpower dismissed 58 of 150 employees at its West Branch assembly plant in March.

"Our customers are developers," general manager Adrian LaTrace said. "Their ability to access capital has essentially been paralyzed since the last quarter of 2008."

The need for capital is more pronounced because wind energy is getting bigger. New wind turbine blades have a rotational reach of up to 300 feet and can generate up to 3 megawatts.

Iowa is something of a model for the national goal of achieving 20 percent of its electricity generation from wind by 2030. The state already has 2,790 megawatts of wind generating capacity, about 18 percent of Iowa's total generation capacity.

The expansion has been spurred by MidAmerican Energy of Des Moines, which has almost 1,300 megawatts of generating capacity at several wind farms in central and western Iowa. NextEra has 780 megawatts of generating capacity, the bulk of it sold to Alliant Energy for its electricity customers in Iowa.

Tradewinds, a Kansas City group, has been soliciting leases from landowners in Poweshiek County for a wind project. Blum and his Estherville group want to put up two wind farms in far northern Iowa.

The electricity would tie into the Minnesota grid and serve customers in that state.

The renewed push for wind development has renewed calls for upgraded transmission lines from federal and state officials.

John Dunlop, senior technical outreach engineer for the American Wind Energy Association, said if the United States is to achieve the goal of 20 percent of its electricity generation from wind, massive upgrades will be needed to move the electricity from Iowa and the Midwest to Chicago and Eastern cities.

Utilities have said they won't take on the expense by themselves. Blum said his Estherville group will have to put up as much as $60 million for transmission upgrades to tie into the Xcel Energy transmission system in Minnesota.

Transmission isn't the only issue. Leases for wind turbines are rising in value.

Algona lawyer Scott Buchanan said leases in the $4,000 to $5,000 range per turbine are common.


Source: http://www.desmoinesregiste...

APR 7 2009
http://www.windaction.org/posts/19732-wind-industry-banks-on-tax-credits
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