Wind Power Energizing Rural America: Increasing Share of U.S. Wind Energy Sector Held by Community and Producer Groups

Article excerpt

[ILLUSTRATION OMITTED]

Wind energy is a bright spot on the rural economic development horizon. Wind power projects across rural America contribute to local and regional economic growth and development. The wind energy industry creates new jobs and new sources of revenue for farmers and ranchers, and it increases the local tax base of rural communities.

Wind turbines generate homegrown energy that helps secure America's energy future during uncertain times while reducing pollution and conserving water resources. Wind energy is the fastest growing energy source in the world, and numerous rural communities are reaping the benefits.

Why wind power?

Among the major benefits our nation derives from wind energy are:

* Wind power is a clean energy source. Its fuel is the wind and it produces no pollution. Wind power is a renewable energy source created every day by the heating and cooling of the earth.

* The price of wind power is not affected by fuel price increases or supply disruptions. It improves both America's trade balance and energy security by reducing our dependence on fossil fuel imports.

* Wind power creates jobs--more jobs per watt than all other energy sources, including oil and coal. Wind turbines can be produced domestically (although most are not, at this time).

* Due to technological advances, wind power can cost as little as four to six cents per kilowatt hour, making it competitive with conventional energy sources.

* Wind power can promote rural development by providing steady, ongoing income for farmers and other landowners whose other income is often cyclical, subject to the sharp ups and downs of farm commodity markets. Land used for wind turbines can also be used for other purposes, such as grazing and farmland.

* There are enough reliably windy areas in the United States to produce three times as much electricity as the nation uses today.

Wind industry trends in '07

There are several important trends in the U.S. wind energy sector that will shape its near term future, including:

High growth--U.S. wind-power capacity grew by 26 percent in 2006, and similar growth is expected in 2007 and beyond;

Turbine supply shortage--Some wind project developers have been waiting up to two years or longer for wind turbine orders;

Bigger wind turbines--Larger and more costly, but also more efficient, wind turbines have become increasingly popular and have driven down the cost of wind-generated electricity;

Wind project developer consolidation--Globalization and the maturing of the domestic industry have resulted in increasing concentration of wind-power ownership;

Policy incentives continue to drive the industry--The Federal Production Tax Credit, Clean Renewable Energy Bond program, Renewable Energy Production Incentive program and USDA Rural Development's Renewable Energy and Energy Efficiency program (also called the "9006 program") have each helped to spur investments in wind projects.

The trend of most immediate importance to smaller community wind projects is the turbine shortage, which has been pushing up development costs. A recent study by the U.S. Department of Energy found that average turbine costs rose 17 percent in 2006, and they are projected to rise another 14 percent this year. This has forced wind project developers to work out deals years before beginning construction.

[ILLUSTRATION OMITTED]

Larger developers have used their size and buying power to aggressively secure large numbers of turbines. Smaller, community wind developers, however, have had to delay projects when they found that turbine suppliers were either out of stock or not interested in filling comparatively small orders. There are positive signs, however, that more manufacturers are entering the industry, and that existing suppliers are expanding their production to better meet increasing demand. …