Wind industry calls for US RES, as first project guaranteed

The economic stimulus package has provided valuable support for the US wind energy sector, but a national renewable electricity standard (RES) is the policy tenet most critical to the industry’s development, project sponsors said.

Using funds from the American Recovery and Reinvestment Act, the Department of Energy (DOE) this week authorised the first loan guarantee for a wind energy project. The agency’s $117 million guarantee will help finance construction and start-up of a 30MW wind project in Kahuku, Hawaii. The project, by Boston-based sponsor First Wind, aims to contribute to the state’s goal of meeting 70% of its energy needs with clean energy by 2030 – a major reversal as Hawaii currently relies on imported oil for 90% of its energy supply.

But the renewable energy grant programme has been the major source of support for the sector from the Recovery Act. Iberdrola Renewables has received the largest portion of the funds dispersed from the grant programme, more than $500 million, said Donald Furman, senior vice-president of the Portland, Oregon-based company and president of the board of the American Wind Energy Association (AWEA).

The Recovery Act has allowed renewable energy producers to change their investment profiles to move capital to the US. For example, the looming expiration of a production tax credit in 2008 motivated AES Wind Generation to spend 80% of its $1 billion investment for 2009 outside the US, said Arlington, Virginia-based Ned Hall, executive vice-president of the firm. But the Recovery Act will allow the company to reverse that trend this year, with roughly 80% of its investment in the US, he said.

“Anything that creates additional uncertainty certainly motivates us to rethink where we focus our efforts,” Hall said.

While the stimulus funds have clearly played a tremendous role in the sector in the last couple of years, the industry needs a stable, long-term policy, said Victor Abate, vice-president for renewables for GE Energy, which has invested more than $1 billion in wind energy technology in the past decade.

“The next move from a policy perspective is demand,” he said. “We need to drive demand in the alternative energy sector through the next decade in a very stable way, a predictable way, and that’s through a renewable energy standard.”

A national RES is part of the discussions on an energy and climate legislative proposal expected to be offered soon by senators John Kerry (D-Mass), Lindsey Graham (R-SC) and Joe Lieberman (I-Conn), said Denise Bode, CEO of AWEA.

“No, I don’t think we’re in trouble,” she said in response to a question on whether the wind energy industry was losing momentum. “I think we’re very well positioned to get something done and to get it done quickly.”