January 27, 2006

New turbines helped Iowa keep its place among top wind energy-producing states in 2005, as the nation's wind industry breezed to a record year.

Iowa installed 201.65 megawatts of new wind energy last year, according to figures by the American Wind Energy Association. Nationwide, the wind industry installed 2,431 megawatts, eclipsing the previous record of 1,697 megawatts set in 2001. One megawatt of wind power is enough to power 270 to 300 homes.

Randall Swisher, executive director of the wind association and a native of Atlantic, said utilities are turning to wind energy in part because generating electricity by burning natural gas or coal is becoming more expensive.
 

"The thing that is different today than five years ago, not only is gas no longer the automatic default but also wind is playing a larger role in the thinking of electric utilities," he said.

Des Moines-based MidAmerican Energy accounted for most of Iowa's new wind capacity in 2005, completing a $386 million, 257-turbine project in two northern Iowa sites. The projects have no impact on customers' electricity rates. MidAmerican's rates, which are regulated by the Iowa Utilities Board, are set until 2010.

Iowa law requires that utilities get 2 percent of their electricity from renewable sources. Gov. Tom Vilsack has set a goal for Iowa utilities to produce 1,000 megawatts of renewable energy by 2010.

Most of MidAmerican's electricity is generated by burning coal. Now that it has 360.5 megawatts of capacity in place in northern Iowa, MidAmerican said slightly more than 9 percent of its generation now comes from renewable sources.

Last fall, MidAmerican commissioned the last turbines of a wind project comprising 122 turbines in northwest Iowa and 135 turbines in north central Iowa.

Only California and Texas have more installed wind energy capacity than Iowa, the wind association said.

The growth in wind projects in Iowa and nationwide follows renewal of a federal tax policy that supports the wind industry. The tax credit provides a 1.5 cent- per-kilowatt-hour tax credit, adjusted annually for inflation, for electricity generated from wind turbines.

The credit expired at the end of 2003. Congress did not renew it until September 2004. Although many in Congress supported the credit, it was initially included among more contentious provisions in a wide-ranging energy bill. The credit passed as part of another bill.

Since the credit was renewed, Iowa has seen wind energy investments. California-based Clip- per Windpower opened a turbine factory in Cedar Rapids last year.

But uncertainty about the tax credit hurts the wind industry, according to a report released this month by Emerging Energy Research, a Cambridge, Mass., firm. As the tax credit's expiration nears, investment in turbine manufacturing slows. That has created a shortage of turbines.

MidAmerican spokesman Allan Urlis said the utility did not have difficulty securing turbines for its wind facility. Turbine contracts were finalized in 2003 before the credit expired. But MidAmerican did not begin installing the turbines until after the tax credit was renewed.

Urlis said without the credit, the project would not have been economical for MidAmerican.

The credit now expires at the end of 2007. Swisher, of the wind association, said he would like to see a tax credit extension of at least five years to avoid another slowdown in wind installations. For now, Swisher expects the industry to sustain its momentum and set another record.

"We expect close to 3,000 megawatts to be built this year," he said.

Copyright © 2005, The Des Moines Register.

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