Commercial Scale

GE Study Finds Tax Revenues from Wind Farms Offset Tax Incentive

Confused by the rhetoric on all sides of the current debate over whether or not to renew the federal renewable energy Production Tax Credit? Would you like to be able to address the issue in an informed and persuasive manner?

A study released in June by GE Energy Financial Services finds that, over the average 20-year projected life-span of a wind project, the revenue streams to the federal treasury from the construction and operation of the wind project result in a net gain to the federal government even given the current cost of the federal production tax credit (PTC).

The study was based on projects becoming operational in 2007. By the end of the 20-year project life-span assumed in the study, the $2.5 billion investment by the federal government in these projects through the PTC (the study assumed that the federal government would borrow this money and includes those borrowing costs) would show a return of $250 million. Averaged over the life of the projects, this would represent approximately a 5% per annum return on investment. Most of this return would, however, be realized in the last half of the expected life of these projects. Read the report summary, which also hints at the local economic and ecological benefits not included in the study's calculations, for more details.

Addendum:  8/8/2008 - a very good and readable critique of this GE report was posted on LeonardoEnergy on 7/17.  It's worth reading as a follow-up. 

 

Phase I of Minnesota Dispersed Renewable Generation study available

The passage of the Next Generation Energy Act of 2007 by the Minnesota State Legislature and Tim Pawlenty requires a study of the potential for dispersed renewable generation statewide. The study consists of two parts, Phase I and Phase II, which focus on installing a total of 1200MW of new dispersed renewable energy projects with a minimal impact on the transmission grid. As determined by the legislation, project sizes under consideration are limited to between 10 and 40MW. For the study the state is split into six regions while focusing on the five out-state regions - the NW, NE, W-C, SW and SE - for potential for dispersed generation The Minnesota utilities affected by the 25x25' (25% by 2025) renewable energy standard are performing the analytical work with oversight by the projects Technical Review Committee (TRC).

On June, 16th 2008 the results of Phase I of the study were released. The first phase of the study, the appendices, and the presentation slides for the study's release can be found at the Minnesota Department of Commerce page.

Xcel Energy RFP for C-BED projects now available

On June 17, Xcel Energy (through Northern States Power) released their 2008 request for proposal (RFP) for Community Based Energy Development (C-BED) projects.

Here's what it says on the Xcel Energy website: "As a part of Xcel Energy’s Community-Based Energy Development (C-BED) program, Xcel Energy is soliciting proposals for Community Based Wind Projects. In 2005, the Minnesota Legislature directed that each utility establish a tariff for the purchase of C-BED wind energy. The purpose of the tariff is to encourage and promote broader local participation in wind energy development.

Beginning June 17, 2008, Xcel Energy will be accepting proposals for new Minnesota wind generation resources to be in commercial operation by Dec. 31, 2009. Xcel Energy will seek approvals for any resulting Renewable Energy Purchase Agreements from the Minnesota Public Utilities Commission. The submission deadline is July 11, 2008."

Click here to go to the Xcel Energy website and download a complete copy of the 2008 RFP.

Minnesota legislator wants state to encourage small, locally-owned energy projects

 

Article by: H.J. CUMMINS , Star Tribune

January 15, 2008

A legislator's plan to encourage small, local energy projects in Minnesota borrows from Germany's experience.

 

A Northfield legislator wants Minnesota to take a more European approach to renewable energy.

Rep. David Bly, DFL-Northfield, is expected to announce Thursday that he'll sponsor a bill to encourage local ownership of small energy projects. The measure would be a counterpoint to other tax incentives, including a federal production tax credit, that typically benefit large, corporate investors.

The proposed model, known as "feed-in tariffs," has worked in countries such as Germany, increasing both renewable-energy capacity and the role of small owners. Other states looking at feed-in tariffs include Michigan and California, although no state yet has such a program.

The proposal raises two issues likely to surface along with other renewable energy bills expected in the 2008 legislative session: What are the relative roles of government and the free market, and if clean energy costs more, who should pay that cost?....

 

Click here to read the article

"Local ownership urged for energy projects"

on the Star Tribune website.

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