Wind Energy:

Today and Tomorrow

By:Dr. Patrick C. Mann

Issue:Spring 2009 : Articles

Wind power currently produces only 1 percent of our nation’s electricity, but its share of the market is rapidly growing. That’s hardly surprising given the increased prices of traditional sources of energy and the growing concern over global warming. Unlike traditional fuels, wind energy is exceptionally clean. Last year, enough wind capacity to power 1.5 million homes came on line in the United States.

So, amid this growing national interest, where does West Virginia fit in the wind energy picture? What’s the current situation and what does the future hold?

At present, West Virginia has two wind energy facilities in operation.

The Mountaineer Wind Energy Center, which runs along Backbone Mountain in Tucker and Preston counties, began operating in 2002. FPL Energy operates the 44-turbine facility. The 66-megawatt capacity of this facility can provide electricity sufficient for 20,000 residences.

The Ned Power Mount Storm project in Grant County became fully operational in December 2008. Shell Wind Energy and Dominion Resources jointly own this facility, which involves 132 turbines or 264 megawatts. The site for this facility includes abandoned surface mining land and can provide sufficient electricity to power approximately 80,000 homes.

Several other wind energy projects are pending.

US Wind Force and the Edison Mission Group are developing a project in western Grant County. Permitted by the Public Service Commission in 2002, this project will involve as many as 150 megawatts of electricity.

Invenergy is developing a project in northwestern Greenbrier County. The Beech Ridge project will involve 124 turbines or 186 megawatts. The PSC issued an order in 2007 approving the project under certain conditions, including the monitoring of bird and bat mortality. Several groups challenged the project, which is now back before the commission again. The PSC conducted a public hearing on the project in October 2008, but has not issued a final order regarding it.

In November 2008, the Public Service Commission approved the proposed Laurel Mountain project in Randolph and Barbour counties. AES is developing this 65 turbine, 125-megawatt project and anticipates commencing commercial operations in 2010.

In addition, developers have expressed interest in possible projects in Grant, McDowell, Mineral, Nicholas, Pendleton and Tucker counties.

Benefits and Costs

Wind energy development involves several economic benefits including an increase in temporary employment during construction, an increase in permanent employment when the facility becomes operational, the benefits of increased local property tax revenues and annual lease payments to land owners.

For the purchaser of electricity, wind energy involves reduced risk. Given that its fuel costs are zero, wind energy is not subject to unexpected changes in price as observed with fuels such as natural gas. Thus, wind energy can offer the consumer stable, long-term prices.

Wind energy generation contributes to the reduction of three major air pollutants: carbon dioxide, which is the most important of the greenhouse gases; sulfur dioxide, which is the primary contributor to acid rain and nitrogen oxides, which also contribute to acid rain. The reduction in emissions assists the state in complying with the federal Clean Air Act.

Finally, wind energy diversifies our energy generation portfolio.

At the same time, there are some environmental costs associated with wind energy generation. For example, the FPL-operated in Tucker County has experienced a substantial amount of bat kills. Experts are uncertain why the bat kill at the FPL facility is larger than that generally experienced elsewhere in the United States.

As turbines are constructed on top of mountain ridges, roads are necessary to transport materials up to the ridges and to provide access for maintenance. Critics of wind energy development argue that wind farms decrease local property values and local tourism; however, no empirical evidence exists to support these arguments.

From a policy standpoint, the environmental costs of wind power must be compared to its environmental benefits as well as the environmental costs of other energy sources.

The viewshed issue – that is, the visual pollution – cannot be addressed empirically. The esthetic effects of any manufacturing facility must be considered as a potential cost to persons living nearby. The viewshed issue cannot be separated from the familiar NIMBY (not-in-my-back-yard) syndrome.

Finally, critics of wind energy assert that because wind energy facilities provide variable power, it is necessary to build more coal-fired plants to support wind energy generation. However, in reality, wind-generated electricity enters the grid causing other generators to produce less electricity.

Tax Incentives

Tax incentives exist for wind energy development. A federal production tax credit was initiated in1992. In 2008, the production tax credit was extended through December 31, 2009. This 2.1 cent per kilowatt-hour tax credit applies to electricity produced during the first 10 years of facility operation.

Critics of wind energy argue that wind generation is overly subsidized. One only has to read the Energy Policy Act of 2005 to grasp the extent of federal subsidization of all energy sources, including oil.

In 2001, West Virginia enacted legislation that classified wind turbines as pollution abatement devices; this translated into wind turbines being taxed, for property tax purposes, at 5 percent of their salvage value. In 2007, legislation was passed that imposed a limit on the amount that wind energy developers can treat as pollution abatement equipment for property tax purposes. This legislation also increased the taxable generating capacity for wind turbines in applying the business and occupation tax to wind turbines and established a business and occupation tax credit for contributions in lieu of taxes to local government units.

Looking Ahead

At present, West Virginia has 330 megawatts of wind energy generation. The PSC has approved another 461 megawatts of generation. Based on models developed by the National Renewable Energy Laboratory, each 1,000 megawatts of wind energy development in West Virginia will generate, over a 20-year period, a total economic benefit of $1 billion, with 3,100 temporary construction jobs and 400 permanent jobs.

The U.S. Department of Energy recently developed a plan that has wind energy constituting 20 percent of electricity generation by 2030. It is uncertain as to the contribution of West Virginia to this particular goal, given that there are numerous areas within the state where wind energy projects are not economically viable.

However, based on wind maps, it’s projected that West Virginia could provide up to 3,000 megawatts of wind energy production.