Quite simply, wind is hot right now in Iowa. It is estimated that wind energy will produce about 33% of all electricity generated in Iowa by the end of 2015. Billions of dollars of capital are being invested in Iowa to build new wind farms, millions of dollars each year are being paid to landowners, and billions more are being added to the tax rolls of Iowa counties and school districts. In addition, Iowa’s employment related to the wind energy industry will continue to expand well beyond the current 7,000 full-time jobs.
By itself, the commitment to wind by MidAmerican Energy is staggering. Already the No. 1 rate-regulated utility owner/operator of wind farms, MidAmerican said in August that it will move forward with 1,050 MW of newly installed capacity, a $1.9 billion capital investment, the largest economic development project in Iowa history. In total, MidAmerican has invested about $6 billion in Iowa wind farms and owns and operates about 50% of the state’s entire installed capacity of wind generation.
According to the Iowa Wind Energy Association, installed capacity in the state is expected to reach 10 GW by 2020 and 30 GW by 2030.
Politically, Iowa governors have been a consistent source of leadership to build the wind energy industry. Gov. Terry Branstad signed the nation’s first renewable portfolio standard into law in 1983. Branstad made growing Iowa’s wind energy industry a top priority in his administration. Former governors Tom Vilsack and Chet Culver followed suit and traveled extensively to recruit wind component manufacturers to Iowa. Re-elected to office in 2010, Branstad continues to make growing the wind industry a top priority.
The state legislature has consistently supported and developed several programs that support growth in the utility-scale, distributed and small wind industries. State tax incentives include a credit between $0.010/kWh and $0.015/kWh of production for various sized wind developments. The legislature also formulated a property tax structure that can be adopted by each county that provides a property tax abatement for wind farm developments. Newly constructed wind turbines can only be assessed at 5% of the total value of the turbine per year – including component and construction cost – to a maximum of 30% after six years.
Iowa’s universities, colleges and community colleges have aggressively developed wind-related research and development and training programs. The research efforts have contributed to the development of more reliable and lower-cost major components, and worker training programs prepare workers for engineering, manufacturing, and operations and maintenance.
However, there are a number of challenges that Iowa faces in order to continue as a national leader in wind energy. While several matters are currently being addressed, much remains to be done.
Transmission in much of Iowa’s best wind areas has been completely utilized, and additional wind farms require new or expanded transmission infrastructure.
Currently, there are at least five major transmission projects – such as the Rock Island Clean Line, a 500-mile high-voltage direct current transmission line that will deliver up to 4.2 GW of wind energy from northwestern Iowa to Illinois and other states to the east – that are in progress or scheduled to be built within the next 10 years.
Transportation of large wind components and cranes for construction and maintenance remains a challenge, as Iowa has many substandard bridges that require careful routing of truck cargo deliveries to wind farm locations. The Iowa Department of Transportation (IDOT) is working diligently to upgrade roadways and bridges for more efficient transportation of wind components and affiliated equipment.
State agencies, such as the IDOT and Iowa Economic Development Authority, have taken a central role in attracting additional wind component manufacturers and wind-related businesses to Iowa. The IDOT works with the transportation team of industry suppliers to help map alternate routes for haulers entering or exiting the state. Recognizing the role of wind energy in Iowa, the IDOT has sought to make permitting cheaper and less restrictive than in other states. For example, the department has worked to ease the level of law enforcement escorts required in transportation, which eases coordination among transportation suppliers.
As is the case nationally, wind energy’s continued expansion in Iowa is directly linked to the long-term extension of the production tax credit (PTC) and investment tax credit (ITC). Led by Sen. Charles Grassley, R-Iowa, known as the “father of the PTC,” and Sen. Tom Harkin, D-Iowa, Iowa’s entire congressional delegation has consistently supported extensions of the PTC and ITC regardless of party affiliation and continue to do so.
The frequent loss or near loss of the PTC and ITC creates a boom-and-bust cycle in the industry that inhibits consistent growth and expansion.
The manufacturers of large wind turbine components need more stable orders in order to avoid frequent large-scale worker layoffs and then the need to quickly hire new workers and gear up production when the next PTC extension is approved. This on-again, off-again nature of the PTC creates uncertainty that has led to the recent closures of manufacturing facilities, such as Nordex’s Arkansas-based turbine plant. w
Market Leader Iowa Reinvests In Infrastructure, Transmission
By Harold D. Prior
Iowa continues to be a market leader when it comes to installed capacity. And with enhancements slated for infrastructure and transmission, it plans to remain that way.
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