Iowa is a clear wind energy leader. The folks there know that wind energy is an economic dynamo… when given the proper love. In this exclusive guest post below, Debi Durham, director of the Iowa Economic Development Authority, shows how Iowa’s story sheds light on what happens when the wind energy industry has clear government policy supporting future economic growth, and why the federal government should follow Iowa’s lead on this one.
By Debi Durham, director of the Iowa Economic Development Authority
This week Acciona announced that it will install two of its AW-3000/116, 3MW wind turbines at a wind farm in Iowa. A part of Acciona’s Pioneer Grove Wind Farm in Cedar County, these innovative turbines will be the first installed in North America. The project, to be completed in the second half of 2012, already has a long-term power purchase agreement with Central Iowa Power Cooperative.
It has been nearly 30 years since Iowa Governor Terry Branstad signed the nation’s first renewable energy standard during his first term in 1983. Soon after, the wind industry began to thrive in Iowa with a combination of incentive programs, private investment and a clear policy framework from government. Today, Iowa generates almost 20 percent of its electricity from wind and leads the nation in creating wind jobs with more than 7,000 people employed in the industry. With a slate of sensible policies and incentives spurring significant investment by the private sector, Iowa ranks behind only Texas in total renewable power generation.
While some alternative energy resources such as wind are robust and showing significant growth and momentum, they have developed in large part due to government programs and incentives. That’s why indecision about extending the fledgling wind energy Production Tax Credit (PTC) is harmful to an industry in need of clarity. Wind needs a full decade of such incentives to give the private sector the confidence and encouragement that it needs to continue providing funding, fostering innovation and creating jobs. Stable periods of tax incentives will support long-term planning, investment and development.
Numerous companies have set up shop across the state, and Iowa universities and community colleges have some of the most comprehensive wind training programs available. In fact, Iowa State University recently announced that they will begin offering a minor degree in Wind Energy.
On a broader level, the wind industry has proven to be a driver of economic growth, energy development, and the creation of high-paying jobs in Iowa and other regions. Tax credit extensions will help ensure that growth is sustainable in the short- and long-term.
Positive Impact on Communities
Cities and towns across the Midwest have benefited from the wind industry, and it has proven to be a growth industry when basic government incentives are in place. In Iowa, Acciona, Clipper Windpower (maker of some of the largest wind turbines in the world), Siemens Wind Power, and TPI Composites have become leading employers in their communities, according to E&E’s ClimateWire. Des Moines-based MidAmerican Energy Company is second among all investor-owned utilities in ownership of U.S. wind energy farms with approximately 3,129 MW in production.
With so much depending on the production of wind power components, the uncertainty surrounding extension of the PTC is expected to result in the loss of high-paying jobs in a prosperous sector of the economy. According to media reports and recent studies, 37,000 jobs are at risk if Congress allows the wind PTC to expire, and private investment is expected to drop by approximately two-thirds.
In addition to wise state-level policies like those in Iowa, a stable and reliable federal tax policy for wind energy development in the U.S. would encourage new capital investment for additional manufacturing and project development at home, while supporting increased export of leading wind technologies.
Iowa is at the heart of a region where four proposed transmission lines converge, allowing electricity from Midwestern windpower to be distributed into various regional transmission systems, which would help the nation achieve greater domestic alternative energy production. The United States has some of the best wind resources in the world, but the lack of long-term federal policy support hinders the ability of states to fully develop these resources.
Delivering wind energy to where it is needed the most is more easily conceptualized than done, but strides are being made. A recent example is Clean Line Energy; the company is in the process of building high — voltage transmission lines in the central region of the United States.
An extension of the PTC for four to 10 years would not only provide the necessary momentum for this industry; but it would also ensure the construction of these transmission lines. With no PTC wind power production will decrease and there won’t be a necessity for transmission lines. Iowa has the potential to power industries and consumers well beyond its own borders , and to help the country meet new energy goals.
Image: wind turbines in Iowa via Shutterstock
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