Permitting Wind Energy Projects

Few people really appreciate how long the permitting and approvals stage of the development process can be, particularly for renewable energy projects that are among the first of their kind in a particular jurisdiction.

ANTARES was recently contracted by a county in the mid-Atlantic to evaluate a Special Exception Permit (SEP) application filed by a developer who wishes to build a utility-scale wind farm. This developer has been engaged in discussions with the county for over two years, after acquiring the project from another developer who had also worked on it for a few years. After a very detailed review by ANTARES and the county’s own staff, the county recommended that 17 conditions be placed on the approval of the developers special exception permit. After a public hearing, the county’s Planning and Zoning Committee made a unanimous recommendation to the county’s Board of Supervisors to approve the permit. A few weeks, and anther public hearing later, the Board of Supervisors also made a unanimous decision to approve the SEP with the recommended conditions.

In the project situation described, renewable energy projects under 100 MW are subject to a Permit by Rule process overseen by the state Department of Environmental Quality (DEQ). Before the process can begin at the state level, the local government must certify compliance with local land use requirements.

After learning of the developer’s interest in the site, the county took action and passed a wind ordinance that regulates the permitting, construction, operations, and eventual decommissioning of utility-scale wind projects within its jurisdiction. In addition to outlining the regulatory process, the adoption of a wind ordinance is an important step in that it protects the interest of the county, its citizens, and its resources. Creating a wind ordinance from scratch can be an ordeal; to facilitate the process, the U.S. Department of Energy’s WindExchange program maintains a catalog of 411 wind energy ordinances from across the country. The WindExchange includes a link to the DOE’s Regional Resource Centers, which were created to provide regionally-focused information on topics such as the wind resource, geography, wildlife, electricity infrastructure, and costs.

The state DEQ acts as the lead agency and coordinates the inputs of the other state and federal agencies that will weigh in on the potential environmental, cultural and historic impacts to the project. At the end of the process, the DEQ issues a report that includes mitigation measures that must be taken to reduce or eliminate impacts of the project. Mitigating measures could involve things like limiting construction to certain seasons, avoiding certain areas of the site, or even curtailing operations during certain seasons and weather conditions.

This particular project is on track to be among the first utility-scale wind projects permitted, and among the first to be approved via the Permit by Rule process. The end of 2017 is earliest it could possibly reach commercial operation, assuming that the rest of the process goes smoothly; at that point, the project will have been under development for nearly 9 years.

ANTARES staff have an exceptional depth of experience in renewable energy projects ranging from owner’s engineering services, to assisting local jurisdictions review projects for ordinance compliance and with public outreach and education. Give us a call if we can assist you with your project.

Third Quarter Wind Installations Released for US

Last week the American Wind Energy Association (AWEA) released its Third Quarter 2015 Market Report.

The U.S. currently has an installed wind capacity of 69,471 MW and 49,860 wind turbines. The wind industry installed 1,602 MW of capacity in the third quarter of 2015, on top of the 1,994 MW were installed in the first two quarters of 2015, for a total of 3,596 MW year to date.

Current US Wind Power Capacity Installations, by State:

wind 1

It’s fairly safe to say that these projects started construction in 2014 or earlier. This is noteworthy, because although the PTC is expired, wind projects that began construction before December 31, 2014 are still eligible to claim the 30% credit.

US Wind Power Capacity Installations, by Quarter:

wind 2

The report also indicates that 1,250 MW of new construction began in the third quarter, for a total of 4,650 MW of new construction activity reported year to date.  This includes 1,200 MW reported in the 1Q and 2,200 MW for the 2Q. Unless the PTC is retroactively renewed, these new projects will not be eligible for the PTC.

Of particular note is that the 3Q new construction activity includes the largest wind project to be constructed in the Southeast, the 208 MW Amazon Wind Farm US East, which will be located in Pasquotank and Perquimans Counties, North Carolina, with a planned commercial operation date of December 2016. The only other wind project currently operating in the Southeast is the 29 MW Buffalo Mountain Wind Energy Center, which is located near Oak Ridge, Tennessee, and was completed in 2004.

Japan Completes Large Offshore Wind Turbine Project

Japan recently completed the installation of the world’s largest offshore wind turbine, with plans for it to be operational by September 2015. The 7 MW wind turbine is located 12 miles off the coast of Fukushima, and is designed to withstand 65-foot waves. This project will join the 45.6 MW of offshore wind capacity that is already installed, with several hundred additional megawatts planned.  Additional information on the planned offshore wind projects is located here.

Floating-turbine-Fukushima

One of the floating turbines at Fukushima.

Are you considering a wind installation project?  ANTARES provides wind resource assessment services to assist in evaluating the potential of large, utility-scale wind farms as well as small, community- or facility- scale wind projects.  Don’t hesitate to contact us today.

G7 Summit Sets Goal to Decarbonize World Economy

On the final day of the 41st G7 summit, which was held in Germany on June 7th and 8th, the leaders of the industrialized nations resolved to “decarbonize” the world economy by the end of the century, which will largely be accomplished by phasing out the use of fossil fuels. Although they do not plan to set binding goals until  a conference scheduled later this year in Paris, the participants did agree to back the recommendations of the United Nation’s International Panel on Climate Change, and work to reduce global greenhouse emissions at the upper end of a range of 40% to 70% by 2050 relative to a 2010 baseline.

As we enter what might be the beginning of the end of the fossil fuel age, with the attendant challenges of developing low-carbon energy systems, keep in mind that ANTARES has over 20 years of experience in successfully implementing cost-effective renewable energy solutions. Give us a call to discuss how we can help bring your project to market.

Wind Vision: A New Era for Wind Power in the United States

The Department of Energy recently released a report documenting the current state of the utility-scale wind power industry in the US, and envisioning a scenario in which wind energy could supply 10% of national end-use electricity demand by 2020, 20% by 2030, and 35% by 2050. The total cumulative wind power capacity by 2050 in the Study Scenario was 404 GW, which included 80 GW of offshore capacity. The report concludes that this level of deployment is both viable and economically compelling, with the Study Scenario resulting in $149 billion (3%) lower cumulative electric system expenditures, a 14% reduction in cumulative GHG emissions (12.3 gigatonnes of CO2 equivalents), and 23% lower water consumption for the electric power sector. Realizing these levels of deployment, however, would depend upon both immediate and long-term actions, including the addition of needed transmission capacity, and supporting and enhancing siting and permitting activities.

The report resulted from the DOE’s collaboration with over 250 experts from industry, electric power system operators, environmental stewardship organizations, state and federal governmental agencies, research institutions and laboratories, and siting and permitting stakeholder groups. It can be accessed here http://www.energy.gov/windvision

Renewable Energy Tax Incentives – 2015 Update

The start of a new year always generates lots of questions on the current state of renewable energy tax incentives. This is particularly true for the Tax Increase Prevention Act, which was signed into to law on December 19, 2014. In a move that has become all too familiar to anyone working in this industry, the Tax increase Prevention Act took many of the biofuel and renewable energy tax credits that had previously expired at the end of 2013 and retroactively extended them through the end of 2014. It is important to note that as of January 1, 2015, these affected incentives have expired once again, and that their ongoing status for the 2015 year has not yet been addressed. This post will review what was changed by this legislation, and highlight the gist of some important incentives that are still available.

Biofuels

Some of the biofuels tax credits that were affected include the Second Generation Biofuel Producer Tax Credit and the Alternative Fuel and Alternative Fuel Mixture Excise Tax Credit, among others, which were retroactively extended through 2014, but not otherwise modified. The full list of extensions is rather long, and can be found at the Alternative Fuels Data Center.

Production Tax Credit (PTC)

The Section 45 Production Tax Credit (PTC) was also retroactively extended through the end of 2014. This is excellent news for the 4,859 MW of wind generating capacity that was installed in the US in 2014. This is four times as much wind as was installed in 2013, although far short of the record 12,000 MW of capacity installed in 2012. For more discussion on the PTC, background information, and the terms of its expiration, please see my post from January 2014.

Investment Tax Credit (ITC)

No legislative changes have been made to the Section 48 Investment Tax Credit (ITC) since the last update I posted. In summary, it is still available through the end of 2016 for the following technologies:

  • Solar, fuel cells, and small wind turbine are entitled to a credit equal to 30% of expenditures.
  • Geothermal heat pumps, microturbines, and CHP are entitled to a credit equal to 10% of expenditures.
  • At the end of 2016, the credit for solar will reduce to 10%, the credit for geothermal electricity production will remain at 10%, and the credit for all other technologies will expire.

Section 1603 Grant

The Section 1603 Grant, which was created by the American Reinvestment and Recovery act of 2009, is a close relative of the PTC and ITC.  Many people do not realize that although the deadline for submitting new applications for the Section 1603 Grant was October 1, 2012, the “placed in service” deadline associated with this grant is not until January 1, 2017, for several renewable energy technologies. Projects that applied for the Section 1603 Grant must be placed in service before the credit termination date, located in the table below by technology, and in the Treasury Guidance Document.

Section 1603 Grant summary

Renewable Energy Tax Incentive Summary Table

As always, DSIREUSA.org is a great place to seek out basic information on local, state, and federal incentives. If you have more complex questions, please give ANTARES a call. We have helped a variety of clients evaluate their opportunities for bringing alternative funding to their projects, including tax credits.

The Virginia State Wind Forum

The American Wind Energy Association (AWEA) organized the Virginia State Wind Forum, which was held on June 3rd 2014, at James Madison University. This event brought together a variety of people with backgrounds including education, policy, business, and technical aspects of wind energy project development. The result was a comprehensive overview of the wind energy industry in Virginia.

Nationally, wind energy has experienced great growth. By the first quarter of 2014, the U.S. had an installed wind capacity of 61,327 MW, with another 13,000 MW currently under construction. In 2013, it contributed just over 4% of the total U.S. electric power generation, up from 1% of during the 1990’s. The Mid-Atlantic region of the country currently has over 2,000 megawatts of installed capacity; at the end of 2013, the regional rankings were as follows: Pennsylvania is leading the way with 1,340 MW installed, followed by West Virginia with 583 MW, Maryland with 120 MW, New Jersey with 9 MW and Delaware with 2 MW. In stark contrast, Virginia has yet to install a single utility scale project, although estimates by NREL rank it between West Virginia and Maryland in wind power potential. Below is a map of the wind resource in Virginia at 80 meters, which is the typical height at which utility scale projects are installed. Areas with wind speeds of 6.5 meters per second and higher are considered to have potential for development.

VA 80m Wind Map

Developers in Virginia have been working on wind projects in the state for over 10 years now. Programs like the State Based Anemometer Loan Program, administered by JMU, have provided valuable data that has been used to characterize the wind resource across much of the state. Developers have also instrumented their own wind resource monitoring campaigns at their targeted project sites. However, progress in actually building wind facilities has been slow.

Themes seemed to arise as speakers at the forum discussed obstacles to wind development in the state, as well as their perceived solutions to overcoming these barriers. Speakers at the forum found that one of the greatest obstacles to wind development in Virginia has been public opposition. A lack of communication between project developers and communities makes it difficult to dispel misconceptions about wind projects. Communities have opposed small scale wind projects for a variety of reasons, including issues related to viewsheds, birds, and noise. While these concerns may or may not prove to be valid in particular circumstances, without education about the success and benefits of wind projects, the community may fail to appreciate why this type of project is a worthy investment.

The other obstacle noted was a lack of policy incentives at the state level. Virginia currently has an un-enforceable Voluntary Renewable Energy Portfolio Goal. As a result, utilities in the state are choosing to purchase wind power from out-of-state as their best option. Until this changes, constructing utility-scale projects within the state will remain challenging.

Virginia has a very strong offshore wind resource, as shown in the map below. Several companies have publicly expressed interest in developing it, and received federal grants to support development. However, these projects will take time to develop. For example, Dominion’s Virginia Offshore Wind Technology Advancement Project (VOWTAP) recently received $47 million from the Department of Energy for the installation two 6 megawatt offshore turbines. Dominion predicts the project will be in operation by 2017. The end goal of that project, is in part, to determine how to economically provide offshore wind energy to customers.

va-offshore-wind-map2

Dominion will be using the research accomplished through VOWTAP for the development of a large scale offshore project. In September 2013, Dominion won a bid to lease a 112,800 acre site located three miles off the coast of Virginia Beach. There, the company plans to develop a wind farm with a capacity of up to 2,000 megawatts. Dominion will be submitting a plan for site characterization studies within the next year. Once approved, the plan will be carried out over a 3 year period. Within five years, Dominion will present a design plan to the Bureau of Ocean Energy Management for a National Environmental Protection Act Review. According to Robert Hare, a Dominion Business Development Manager who spoke at the Virginia Wind Forum, Dominion’s goal is to begin the building of the turbine within the next 20-25 years.

The obstacles to wind energy development in Virginia are certainly not insignificant. However, that does not make them insurmountable. There are multiple ways to make Virginia more attractive for wind development. The consensus at the Virginia Wind Energy Forum is that gaining public support is likely to be the most important step in moving small-scale projects forward. The next step will be to streamline the onerous permit-by-rule permitting process, which currently includes duplicative steps.

 

Special thanks to Ashleigh Cotting for attending the Virginia State Wind Forum and contributing to this blog post. Ashleigh is interning in the Harrisonburg office, and is a rising senior at James Madison University, with a major in Integrated Science and Technology.

 

The Production Tax Credit – What Now?

The federal Production Tax Credit for renewable energy expired on January 1st, 2014. This credit allowed renewable energy technologies including wind, open and closed-loop biomass, geothermal, municipal solid waste, incremental hydropower, and marine renewables to claim a tax credit* for every kilowatt-hour of electricity generated during the first ten years of the project’s life. In addition, legislation passed in February 2009 (The American Recovery and Reinvestment Act of 2009 (pdf), or ARRA) allowed projects that were eligible to claim the PTC to instead claim a 30% Investment Tax Credit (pdf), or ITC. With the PTC expiration, so goes their eligibility for the ITC.** [Read more…]

Recent Changes to the PTC and Their Implications

Heralded by some, despised by others, whether you like it or not Congress recently passed an extension of production tax credits (PTCs) for renewable energy projects. Title IV, section 407 of the American Taxpayer Relief Act of 2012 included some modifications to the existing Section 45 Production Tax Credit and the Section 48 Investment Tax Credit (ITC). I’ve prepared a summary of the changes below; for more detailed history of the credits and a breakdown of eligible technologies, DSIREUSA.org is a great place to start (PTCITC).

Section 45 PTC: [Read more…]

Why the East Coast is the Hotspot for Offshore Wind Development in the US

I was recently asked why all of the potential offshore wind projects being featured in the news these days are focused around the New England and Atlantic region, and not the other coastal areas of the US.  The reason is a combination of geography, current technology, and transmission accessibility.

Geography:

The continental shelf is broader in the areas off of the East Coast compared to the West Coast. You can see in this map where the relatively shallow waters of the extended continental shelf exist on the US sea boards (seen in light blue).

The Continental Shelf

 

 

 

 

 

 

 

Technology:

Current technology limits wind turbine foundations to these relatively shallow water depths, since all of the commercially available offshore wind turbines available today require a foundation that is anchored to the sea floor.  Once you get into deep water, you’d require floating platform foundations.  This type of “floating” foundation for wind turbines simply hasn’t reached technological maturity yet.

Types of Turbine Foundations

 

 

 

 

 

 

 

 

Transmission Accessibility:

The coastal area stretching from Boston to Washington DC has a large population and a high electrical demand.  This fact, when considered in conjunction with the shallower water required by offshore technology, makes the region an obvious choice for offshore wind farms.

Moving Forward

At the end of 2011, the total installed global offshore wind capacity stood at 238 GW.  None of that is in the US.  After ten years of development, the 454 MW Cape Wind Project, which is sited off the coast of Nantucket, is the first project in the US to receive all required permits and approvals.  Cape Wind is still in the project financing stage; once construction starts, it will take approximately two years to complete.  Deepwater Wind has proposed four projects ranging in size from 30 MW to 1,000 MW off the coasts of New Jersey and Rhode Island; the smallest of these projects has the potential to begin construction in 2013.  The 25 MW Fishermen’s Energy project, sited off the cost of New Jersey, has also received all its permits, but remains on hold pending decisions on the project’s eligibility for state renewable energy incentives.  The Great Lakes region will likely be another offshore wind hotspot, since this area also meets the key development criteria.

For more information:

The European Wind Energy Association’s Global Statistics page.

The American Wind Energy Association’s Offshore Wind page.

Cape Wind

Deepwater Wind

Fishermen’s Energy

Great Lakes Wind Collaborative