Wind energy sector waning in North Dakota

Source: By Patrick Springer, Forum Communications Co., The Jamestown Sun • Posted: Monday, April 9, 2012

ASHLEY, N.D. — The Coteau des Prairie hills that form a hummocky spine through McIntosh County provide a perfect platform for wind turbines.

They’ve been chosen as the site for a sprawling 200-megawatt wind farm six miles north of here — one of 20 wind projects that have been permitted or are in the regulatory pipeline in North Dakota.

But more than a year after the Ashley Wind Energy Project was approved, not a single turbine has been erected, and landowners who signed leases with the developer were told in December that the project is on hold.

North Dakota’s once-booming wind energy sector is waning because of the sluggish economy, continued transmission bottlenecks, and the prospect that federal tax credits will expire at the end of the year.

The state, often rated as having the greatest wind potential in the nation, now has about 1,400 megawatts of total wind capacity. Wind power comprises 12 percent of North Dakota’s electricity mix and ranks 11th in the nation for total capacity.

But notices of intent for new wind farms have stalled since last fall, when the Public Service Commission received the last new wind-energy filings, and development has slowed in recent months.

Ron Meidinger, a McIntosh County commissioner and manager of a secondhand store in Ashley, knows many landowners with leases for the project that would like to see the project completed.

“It would be nice if this did happen,” he said, adding that the county would see property tax revenues after exemptions expired. “It would be a win-win situation for county coffers.”

In the meeting with landowners four months ago, executives of Competitive Power Ventures, the company behind the proposed Ashley Wind Energy Project, said the wind farm wouldn’t move forward this year because of the uncertainty with federal tax credits, Meidinger said.

Calls to Competitive Power Ventures, based in Maryland, weren’t returned.

If Congress allows the tax incentives to expire, renewable energy advocates say the lapse would severely curtail new wind farm construction.

Meteorological towers, used to measure wind potential for possible turbine placement, have been pulling out of North Dakota and South Dakota, said Mike Gray, an independent renewable energy consultant based in the Denver area.

“They’re coming down,” he said. “If you take a ‘met’ tower down, you’re pretty much done.”

Jerry Lein, an engineer with the Public Service Commission, tracks wind energy projects, and said their pace of development “ebbs and flows” over time.

“We have a few of them in the pipeline, but I think they’re looking for power buyers,” he said.

The biggest project in active development is the sprawling Bison complex of wind farms about 10 miles northwest of New Salem. When completed, its turbines will have a cumulative generating capacity of 292 megawatts.

Phase one has been built, and work on the second and third phases will begin soon on the project by Allete’s Minnesota Power, based in Duluth.

The company is pushing to complete the project before wind tax credits expire at the end of the year. The project has 70 wind turbines, each with a capacity of 2.3 or 3 megawatts.

“That’s definitely our goal,” said Wade Isaacson of Minnesota Power. “There’s no plan B. They definitely have to be up by the end of the year.”

The company might be interested in building more wind power in North Dakota, but the decision rests at least partly on whether the federal tax credits are renewed, he said.

Several projects have regulatory permits in place, but haven’t been built for one reason or another, Lein said.

“We’ve continued to permit projects but there’s been kind of a lull in the economy,” Lein said.

The federal wind tax credits have bipartisan support, and have repeatedly been extended, but sometimes have lapsed for brief periods. Wind power proponents are expected to try again for an extension before the end of the year.

Gray, a native of Hankinson, said North Dakota has sent a discouraging message to the wind industry by suing to challenge Minnesota’s renewable energy standard.

In effect, he said, the state has picked the coal-fired power industry over the wind industry by the lawsuit, which includes a $500,000 legal war chest to fund the court challenge.

“The developers look at that and say this is not a vote for wind in North Dakota,” Gray said, adding that the state cannot simply rely on its wind energy potential.

“Great wind means nothing,” he said. “There’s lots of great wind in this country.”

But a couple of other wind developers disagreed, saying transmission bottlenecks pose the greatest obstacle to wind development.

North Dakota offers state income and property tax breaks for wind projects.

“They must be attractive,” said John Ihle, a renewable energy consultant from rural Barnesville, Minn. “You’ve gotten a lot of wind development over the past five years. I’ve been in some meetings with some of the big utilities and their preference is to build in North Dakota because of the favorable business climate.”

Todd Wilen, a rancher and wind developer from Fredonia, N.D., agreed.

“I think North Dakota’s legislators are fairly supportive of wind,” he said, “but I think the transmission issue is problematic.”

The planned CapX2020 transmission line would connect Fargo to the Twin Cities, helping to boost power exports and increase reliability in Fargo-Moorhead.

“It’s sort of a tenuous system in some respects,” Wilen said of the transmission grid. “It’s sort of antiquated.”