The winds of change

PHILADELPHIA �?? The Mehoopany Wind Farm under construction in Wyoming County will be the largest in Pennsylvania upon its completion, producing 144 megawatts of electricity.

That�??s a significant charge, enough to power 44,000 homes, but it�??s a drop in a rainstorm compared to wind energy projects in development around the world, experts said Friday at a clean energy conference in Philadelphia.

By the end of 2012, Pennsylvania will surpass 1,000 megawatts in emissions-free wind production capacity, according to Katie Bellazza, marketing manager for Pittsburgh-based wind farm developer EverPower Wind Holdings. While that�??s a significant horizon for the state, but wind projects planned in Europe and Asia will soon eclipse that 1,000 megawatt mark with a single wind farm.

�??There are some 1,000-plus megawatt projects that will begin production in the next year or two,�?� said Tim Daniels of Deepwater Wind, a company planning a 200-megawatt offshore wind farm between Long Island, N.Y. and Martha�??s Vineyard, Mass. �??When we look at our projects, some of the larger projects won�??t be coming online until 2016 to 2018, so we�??re hoping that by the time we go into construction we�??ll be able to see what happened with some of those projects that will by then have been operating for several years.�?�

Strategies to encourage development of the Mid-Atlantic�??s wind market was one of the topics taken up at environmental advocacy group PennFuture�??s 2012 Clean Energy Conference, a gathering of renewable energy executives and experts aiming to create a regional energy hub of clean energy manufacturers, installers and policy makers in Pennsylvania and neighboring states.

While they expressed confidence that renewable energy development will continue, industry experts at the conference said numerous obstacles hamper growth of the wind farm industry in Pennsylvania and surrounding states; obstacles that prevent the region following in Europe�??s footsteps.

Some of those challenges lie in the expiration of government incentive programs helping to fund the enormous construction costs. Lee Davis, northeast regional president of independent energy producer NRG Energy, said his company had been developing a wind farm project off the Delmarva Peninsula since late 2008. It hoped to fund construction of the project through a loan from the U.S. Department of Energy that was made available as part of the 2009 federal economic stimulus, but lost its loan guarantee when the department was unable to finish its review of the project by the program�??s expiration in Sept. of 2011. Further attempts to fund the project privately failed.

Part of what�??s holding the wind industry back could stem in part from Pennsylvania�??s current natural gas boom, Davis also said.

Spurred by a glut in supply from domestic shale formations like the Marcellus Shale that underlies much of Pennsylvania, natural gas prices dropped dramatically in 2012. That has not only been bad for the bottom lines of gas production companies, but also for renewable energy sectors, because the price of energy in the Northeast is tied to the price of natural gas, Davis said.

�??Its economic challenges, not the EPA or any state agency�??s regulations (that are holding the wind industry back),�?� Davis said.

�??With the price of gas being so low, driving the power down as low as it is, you�??re not even seeing prices that allow gas (power plants) to get built,�?� added Mike Speerschneider of EverPower Wind Holdings.

Eric Thumma, director of policy and regulatory affairs for wind generation and renewable energy company Iberdola Renewables and former energy director for the Pennsylvania Department of Environmental Protection, said the state could do more to help the wind industry prosper in Pennsylvania by adjusting its renewable portfolio standard rules for utility companies.

Legislation signed by former Gov. Ed Rendell in 2004 required that a percentage of the power utilities supply come from alternative energy sources including wind, biomass and hydroelectric, escalating by percentage annually until reaching a mandatory minimum of 8 percent in 2020. But Pennsylvania is also an energy choice state, meaning energy customers can choose where the energy they buy comes from. That combination can prevent renewable producers from gaining the long-term capital commitments they need to build new infrastructure like wind farms, Thumma said.

�??You don�??t know how much renewable energy you will need in the next year (to meet the renewable portfolio standard) because you don�??t know how many customers you�??re going to have,�?� Thumma said. Updating the portfolio program to tie the purchase of Renewable Energy Certificates by utilities, which help renewable energy companies fund new power plant construction, to the distribution, rather than generation budget of the utility could help stabilize electricity prices by encouraging utilities to sign multi-year contracts with renewable suppliers, giving them the stability and commitment they need to grow, Thramm said.