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Tax credits give a lift to advocates of wind energy
Questions of costs, viability raise hurdles
Several East Coast states that are moving toward offshore wind energy got a boost last month when Congress extended tax credits for wind energy developers, but concerns linger over the technology’s cost to consumers and the viability of such projects in the current economic climate.
States including Massachusetts, Rhode Island and Delaware are vying to be among the first to get an offshore wind farm up and running in the U.S., and Maryland lawmakers are for a third straight year considering legislation that would set up a regulatory framework for wind energy.
The Obama administration sought to jump-start development last month by awarding grants for test projects in several states. Although the march toward offshore wind has been slowed in recent years by funding and environmental-impact concerns, proponents are optimistic that significant progress will be made this year.
“I absolutely feel like the momentum is on our side,” said Maryland Delegate Tom Hucker, Montgomery Democrat. “Now that the economic incentives are there for another year, it’s a more favorable climate.”
Supporters of wind energy contend that the technology is the nation’s best hope for clean, renewable energy as an alternative to fossil fuels and that its development could bring billions of dollars in business opportunities and hundreds of thousands of jobs.
Energy companies that wish to set up wind farms must lease ocean space from the federal government, and they are also subject to state and local regulations in many cases. The government has awarded leases for potential wind farms off the coasts of Massachusetts and Delaware without competitive bidding among firms and has plans to award its first competitive leases this year in Rhode Island, Massachusetts and Virginia.
Most wind farms are in planning and research stages, but those closest to completion include a farm off the coast of Rhode Island’s Block Island, scheduled to come on line next year, and Massachusetts’ Cape Wind project, which is projected to be up and running by 2015.
Officials say that offshore wind — used to supplement states’ existing power production and add to their renewable energy portfolios — eventually could reduce consumers’ energy bills, but they acknowledge that studying, planning and implementing the technology will be costly enough to force an initial increase in energy costs.
In Maryland, lawmakers have resisted the efforts of Gov. Martin O’Malley, a Democrat, to implement offshore wind mainly over concerns that it could cause a spike in energy bills, although the governor’s failed legislation last year would have limited increases to no more than $1.50 a month for the average residence and 2 percent for commercial consumers.
In Virginia, Dominion Virginia Power is exploring a wind farm that could power as many as 3,000 homes and was awarded a $4 million federal grant for the project last month.
“Winds off the coast of Virginia hold great potential for electricity generation,” said Mary C. Doswell, Dominion’s senior vice president of alternative energy solutions. “The challenge will be to harness this energy and bring it to customers at reasonable cost.”
Aside from costs to ratepayers, critics also argue that wind supporters are rushing the fledgling technology while overlooking more efficient energy streams.
In a letter sent last fall to Interior Secretary Kenneth L. Salazar, Republican Sens. David Vitter of Louisiana and Lamar Alexander of Tennessee argued that the Obama administration is pushing ahead with wind farms off the Atlantic Coast despite limited interest from private developers while ignoring the possibilities of oil and gas drilling in the same waters.
“The administration has a habit of picking energy industry winners and losers, and we want an explanation,” the letter read. “Secretary Salazar should at least be able to defend the economics of the lease sale for wind energy.”
Despite critics’ concerns about the likelihood of companies investing in wind energy in a struggling economy, wind proponents insist that energy firms are lining up for the chance to lease ocean space from the federal government.
They say the federal government’s 2.2-cents-per-kilowatt-hour credit for produced wind power as well as state incentives, such as Maryland’s existing commitment to invest $30 million in offshore wind development, are enough to create a coming boom.
“I don’t know anyone who thinks the economy is where we want it to be,” Mr. Hucker said. “But I think it’s certainly better than it was a few years ago.”
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
David Hill joined The Washington Times in February 2011 as a Maryland political reporter. He can be reached at email@example.com.
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