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Cover of the May 10th issue of The New Yorker magazine. Cover by Bob Staake.

Last week’s issue of The New Yorker magazine featured one of my favorite recent covers. As displayed on the left, the cover depicts the morass of Cape Wind, the oft-covered wind farm proposed off the coast of Massachusetts: a pilgrim sails out from the colony of Cape Cod, joust in hand, prepared for a duel with the turbines in front of him. I’ll try and contain the English major side of my personality that really wants to textually analyze the illustration, except to say that I think the allusions to Don Quixote are apt and ferociously clever, as Cape Wind’s journey over the past decade has been nothing if not quixotic.

The last few weeks have provided a veritable flood of news about Cape Wind, and since we haven’t talked about the project in a little while, we wanted to fill you in and ensure that you’re up to date on all the latest developments:

  • First, and perhaps most importantly, on April 27th the US Interior Secretary Ken Salazar announced that Cape Wind had been given regulatory approval to proceed. Hurdles still remain, however. Groups opposed to the project, including the Wampanoag tribe–who believe the wind farm would violate their tribal rights to unobstructed views of the sunrise for sacred ceremonies–are likely to file lawsuits that could delay the project for years. Having said that, Mr. Salazar stated that he does not believe the lawsuits will ultimately derail the project. Another hurdled faced by the project is that when its approval was announced, no agreement had been reached with a utility company to offtake the electricity produced by the turbines. However…
  • …on May 7th, utility company National Grid announced that they would buy half of the project’s output, or a nameplate capacity of 150 MW. That electricity would make up about 3% of the load that National Grid generates or buys. While the electricity produced by Cape Wind will cost more per kilowatt hour than electricity generated by other sources, Jim Gordon, the President of Cape Wind Associates, says National Grid’s customers will see their rates rise by only five cents a day as a result of the purchase. While Cape Wind will need to find an off taker for the second half of their output before securing financing and beginning construction can begin, Gordon said their deal with National Grid will provide a helpful framework when working with other utilities.

So there’s your Cape Wind update in a nutshell. We’ll continue to keep you posted on updates to the project and other cool New Yorker covers.

Much talk has been made of the United State’s need to enact a nationwide Renewable Portfolio Standard (RPS). Proponents claim that it is the only way for government to commit to clean energy technology and spur real growth in what could amount to a “second industrial revolution” that rejoins America’s storied abilities for innovation and manufacturing. However, without structured policies in place that provide well-defined growth mechanisms for new energy options, any RPS is nothing more than a vague, wished-for outcome. On a hypothetical roadmap for the country’s renewable energy future, an RPS can only mark the destination at the end of a long journey. It does not create the roadways to reach that destination.

A feed-in tariff (FIT) may help to pave those roadways. Already active in more than 40 countries around the world, FIT policies have been cited as primary drivers of growth in the renewable energy markets of Spain, Germany, and Denmark — countries now supplying between 15 and 34% of their energy needs through renewable sources. Despite remarks and pledges from President Obama, the U.S. currently supplies only 5% of its electricity needs through wind, solar, and hydro plants. What accounts for this disparity? The European countries have strong FIT’s while the U.S. does not.

The most successful FIT’s work by setting the price of renewable energy types at guaranteed rates, usually slightly above their market values, for a fixed period of time. This property of a FIT immediately stabilizes the investment environment and helps to secure project financing. Energy developers can lower project costs since the volatility of renewable energy markets is eradicated. The greater availability of financing options simultaneously helps to shorten the development timeline and allow smaller companies to better compete. Over time, the fixed rates can be adjusted based on the effectiveness of the policy.

FIT’s, while already successful in European countries, are now starting to arrive in North America. The Canadian Province of Ontario, which has pledged to stop burning coal before 2014, became the first jurisdiction in North America to enact a FIT three years ago. It recently raised the guaranteed rates for wind and solar projects to 13.5 cents/kWh and 80.2 cents/kWh, respectively, to great success. In only months since, the Ontario Power Authority has attracted roughly 1,200 applications representing more than 8,000 megawatts of renewable generation. Many of these applications came from smaller developers and even residential homeowners, underlining the FIT’s ability to attract a variety of investors.

Interest in FIT’s has been slow to catch on in the United States. Some states have passed legislation containing FIT’s, most notably California, and even local municipalities like Gainesville, FL have adopted similar policies to drive significant growth in renewable energy. Other states have tried and failed to enact FIT’s in their state legislature. Minnesota, whose wind potential is significant, seems particularly determined and hard-pressed to implement a FIT. State representatives David Bly and Bill Hilty have introduced legislature that would establish fixed rates for renewable energy on two separate occasions (February 2008 and February 2009) but failed to get a hearing on their bills in both instances. A lack of guaranteed access to the electric grid, a common provision of European FIT’s, may be keeping state FIT’s from gaining traction.

In a speech to a joint session of Congress on February 24th of this year, Obama declared that America will double its supply of renewable energy over the next three years. It is a lofty goal considering that Congress has yet to pass the current energy bill. Even if that bill’s provisions that call for a federal transmission authority and a national RPS are retained, we may find ourselves without the renewable energy surge that the bill intends to ignite. It may behoove our state and federal legislators to seriously contemplate the FIT policies that have already produced this intended effect elsewhere around the globe.

COP15 Copenhagen

5 days and counting.

Next Monday, delegates from nations around the world will descend upon Copenhagen to discuss our warming world and the measures we can take today to clamp down on carbon emissions and exorbitant energy consumption. President Obama will make a stop in Copenhagen on Wednesday, December 9th, on his way to Oslo to accept the Nobel Peace Prize. He will make a pledge to the gathered assembly that the U.S. will cut its carbon emissions from 2005 levels by 30% before 2025 and by 42% before 2030. An official treaty, however, is not expected to be a result of this year’s conference.

Increasing the output of wind energy, one of the cleanest and most production form of renewable energy, is obviously one sure-fire way to help meet these goals. We will watch with great interest as an international strategy to preserve our environment develops next week. It is an effort sure to rely on wind and other renewables.

Even with a great wind resource and good wind turbine siting, wind energy projects are heavily dependent on how the community regulates wind power. The impact and benefits a wind energy project has for a community, is dependent on permitting and taxes. Moreover, each community has different thoughts about creating regulations and issuing permits. Because these requirements have such an impact on wind projects, it is important that developers know about them early on and work to be consistent with those requirements to avoid delays later in development. Because National Wind’s projects are community-owned, they have strong support and low rates of opposition. Local governments are more likely to approve wind projects with high levels of community support, making the permitting process easier to navigate.

Permitting authorities can be on the local, state, and federal level. These laws specifically address the siting of wind turbines and determine how the broader community can benefit from the project. In many states, the local planning commission, zoning board, or city council is the primary permitting jurisdiction. Local permitting may require developers to obtain a grading or building permit to assure they will comply with structural, mechanical, and electrical codes. Other times, state agencies will take the responsibility of permitting wind projects, and state law may supersede local permits. If not, developers may need to obtain both local and state permits.

Specific states of interest to National Wind have differing permitting and zoning policies. North Dakota and Montana have no specific state governing authorities for these policies, while Minnesota has a statewide policy for permitting commercial-scale wind projects. Minnesota’s Public Utilities Commission has permitting authority for systems over 25 megawatts, while smaller systems are generally left to local jurisdiction. South Dakota’s Public Utilities Commission has authority over all wind projects, and in Iowa, local zoning boards have authority over all wind projects.

When federal agencies serve as the permitting authority, the regulations are very specific to the wind project. For example, if a project poses harmful effects on wildlife habitat or species, permitting will most likely involve consultation with the United States Fish and Wildlife Service. When a turbine over 200 feet tall is sited near an airport, the Federal Aviation Administration will need to approve the project. Thus, regulations and authority decisions will vary based on the particulars of the wind project.

Well-planned projects will avoid permitting conflicts on local, state, and federal levels. As wind energy continues to grow in the U.S., permitting issues can arise on any level and developers will need to be aware of regulations before beginning a project. Developers must also work to promote general public involvement to ensure a timely permit decision.

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