Climate Law Update: Climate Change & Sustainable Energy News : Thelen Reid Law Firm : Renewable Energy, Construction, Project Finance Lawyers & Attorneys

The new wind farm deal is even bigger than the agreement involving Pacific Gas and Electric Company's venture into photovoltaics. As announced last week, the utility signed contracts for a pair of projects, both located in San Luis Obispo County, that together will deliver 800 megawatts of power. The San Francisco Chronicle reported the deals would create the country's first utility-scale photovoltaic plants.

The utility's announcement cautioned that the deals depended on the federal government extending federal tax credits for renewable energy, by no means a foregone conclusion, as well as "processes to expedite transmission needs." 

Despite those kinds of uncertainties, there's obviously a bullish attitude toward renewable energy right now. That was underscored by last week's announcement that Vestas, the big Danish wind power equipment company, is embarking on a major expansion of its Colorado facilities. The plans include a $290 million wind-turbine complex that will employ 1,350 workers, reported the Denver Post. In the Vestas announcement, a high-ranking company official expressed optimism that Congress would act to renew the tax incentives.

And, as if to dispel the stereotype of the gloomy Scandinavian, the minister of climate and energy in Vestas' home country also optimistically predicted that a huge shift to renewable energies, such as solar and wind power, from fossil fuels will survive flagging economic growth, reported Reuters environmental blog.    

On the other hand, not everything's always so rosy. The New York Times reported Monday about accusations of "corruption and intimidation" swirling around upstate New York as wind developments get to be big business there.

--Dennis Pfaff 

It showed not only how far the nation had come, but also the distance yet to be traveled to reach the 20 percent objective. For instance, the document reports that the United States has had the fastest-growing wind market worldwide and that it has led the world in new wind capacity for three years running.

In all, the country had nearly 17,000 megawatts of wind capacity at the end of 2007, up more than 5,300 megawatts. On the other hand, even with that growth -- a 46 percent jump in a single year -- it still represented just 1.2 percent of the country's electricity supply.

For individual states, the percentages were higher, however. Under a formula used by the report, nine states had enough wind capacity to account for more than 3 percent of their in-state generation. Topping the list were Minnesota and Iowa, where wind power accounted for 7.5 percent of each state's generation. Texas, the nation's top wind power state in terms of its total capacity, accounted for 3 percent while California, number two in the nation, came in at 2.8 percent. 

Overall, Texas easily dominated the other states in terms of new wind projects, installing more than 1,700 megawatts of turbines in 2007. Other states installing more than 400 megawatts each included Colorado, Illinois, Oregon and Minnesota. California, by contrast, had a relatively puny 63 megawatts installed. But that might change in the future as the result of new contracts such as one Climate Law Update recently highlighted.   

The report also documented economic ripple effects from the boom in wind energy development. It found that new turbine and component manufacturing facilities that were opened last year could account for as many as 4,700 new jobs. On the other hand, the report documented some quality control problems that surfaced as certain companies rapidly scaled up their operations.

GE remained the dominant manufacturer of turbines in the United States market, followed by Vestas, Siemens, Gamesa, Mitsubishi and Suzlon.

Turbine prices themselves have also increased dramatically -- by about 85 percent since 2002 -- according to the report. It attributed the spike to several factors, including the declining value of the dollar, increases in costs of materials such as steel and oil, shortages in some components, and moves by manufacturers to increase their profitability. Nevertheless, the report said that "wind power prices have been competitive with wholesale power market prices over the past few years."

One familiar cloud remained on the horizon, the future of tax incentives for renewable energy, including wind. Less than two weeks ago, House lawmakers made another attempt to get something going on the subject of tax credits for wind and other alternative energy sources, but its future remains uncertain. The importance of the tax incentives, the report said, was shown by the fact that there were "pronounced lulls" in adding new capacity during years when the "production tax credit," equal to about 2-cents per kilowatt hour, lapsed. Without an "imminent extension," the document said, the industry "may experience another quiet year" in 2009.

Another perennial obstacle to renewables, transmission capacity, showed some sign of easing with new expenditures on the rise. However, the report noted that "lack of transmission availability remains a primary barrier to wind development."

The report also found that state policies were important. For instance, it noted that 55 percent of the wind power capacity built between 1999 and 2007 was in states that had renewables portfolio standards requiring their utilities to purchase a certain percentage of power from renewable sources. In 2007, the proportion of new wind capacity going into states with such requirements was more than 75 percent, the report said.

(Photo of Texas wind farm, Department of Energy National Renewable Energy Laboratory; Credit: Todd Spink)