Lawmakers Unveil Offshore Incentive Bill
In an effort to continue spurring offshore wind in the country, U.S. Sens. Edward J. Markey, D-Mass., and Sheldon Whitehouse, D-R.I., along with Rhode Island Congressman Jim Langevin, D-2nd District, have reintroduced the Offshore Wind Incentives for New Development Act (the Offshore WIND Act).
The bill would extend the 30% investment tax credit (ITC) for offshore wind through 2025. The 2015 omnibus bill extended the production tax credit and ITC for wind until 2019, but because of the longer planning and permitting times currently needed for offshore wind, the legislators explain, the U.S. Department of Energy has found that no additional offshore wind projects are projected to be able to qualify for these tax credits before they expire.
The U.S.’ first offshore wind project, Deepwater Wind’s Block Island Wind Farm, began operations in December after being initiated nearly nine years ago, the lawmakers point out.
“The WIND Act puts the ‘win’ in wind energy,” quips Markey, a member of the Environment and Public Works Committee. “Offshore wind projects are a crucial part of America’s energy future. Offshore wind has the potential to create tens of thousands of jobs in Massachusetts and up and down the East Coast, encourage local innovation, and reduce carbon pollution. But in order to realize this potential, we need to provide this nascent industry the long-term certainty in the tax code that it needs.”
“I’m proud to say that America’s first offshore wind farm is powering Rhode Island homes and businesses with clean, renewable energy,” adds Whitehouse, also a member of the Environment and Public Works Committee. “Building the wind farm off Block Island has been a boost for our economy, and those turbines are already reducing our region’s carbon footprint. This bill will extend an important investment tax credit to expand the benefits of offshore wind we’re enjoying in Rhode Island to coastal communities across the country.”
Other lawmakers co-sponsoring the legislation are U.S. Sens. Jeff Merkley, D-Ore.; Elizabeth Warren, D-Mass.; Jack Reed, D-R.I.; Cory Booker, D-N.J.; and Sherrod Brown, D-Ohio.
Groups supporting the bill include the League of Conservation Voters, the Natural Resources Defense Council, Environment America, the Sierra Club, Oceana, the Union of Concerned Scientists, Mass Audubon, and the Conservation Law Foundation.
“Rhode Island has positioned itself as a leader in offshore wind with the Block Island Wind Farm – the first of its kind in the United States,” notes Langevin, who serves as energy task force chair on the Sustainable Energy and Environment Coalition in the House of Representatives. “By incentivizing additional such projects, the Offshore WIND Act will encourage other states to follow Rhode Island’s example. Clean energy is our nation’s future, and we need a sustained commitment to investments in more efficient and sustainable energy solutions.”
New Hampshire Town Makes Renewables Pledge
The Town of Hanover, N.H., has voted to establish a goal of transitioning to 100% clean and renewable energy by 2050. The article approved at a recent town meeting sets a community-wide goal of transitioning to 100% renewable electricity by 2030 and a 2050 goal of transitioning heating and transportation to run on clean, renewable sources of energy.
According to the Sierra Club, Hanover now represents the 29th city/town in the country to officially commit to 100% renewable energy and the first in New Hampshire to establish such a goal. The vote comes after the Sustainable Hanover Town Committee in December endorsed a transition to 100% renewable energy in the town for electricity, heat and transportation by 2050.
“I am overjoyed that the town meeting voted unanimously to support a goal of 100 percent renewable energy,” says Hanover Town Manager Julia Griffin. “We look forward to working with Sierra Club and Sustainable Hanover to achieve this goal.”
The Sierra Club says town meetings like the Hanover vote have long been a form of direct democracy across New England. Unlike the other 28 U.S. cities and towns that have committed to 100% clean energy, Hanover represents the first municipality in the country to have a goal of 100% renewable energy voted on and approved by the residents of that community, according to the Sierra Club.
The vote also builds on Hanover’s growing investment in renewable energy. In 2014, Hanover was named the U.S. Environmental Protection Agency’s first Green Power Community in New Hampshire, and the town is currently at 22% renewable electricity through partnerships with Dartmouth College and other businesses and institutions and town residents.
The Sierra Club notes that the Town of Southampton, N.Y., similarly established a goal to transition to 100% renewable energy. Other cities that previously established commitments include major metropolises such as San Diego and Atlanta, along with small towns such as Abita Springs, La., and Moab, Utah.
Okla. Tax Credits End Next Month
In a not-so-surprising move, Oklahoma Gov. Mary Fallin has signed into law a bill that will end the state’s production tax credits for wind power on July 1 – way sooner than the original sunset date of Jan. 1, 2021.
H.B.2298, which was sponsored by Senate President Pro Tempore Mike Schulz, R-Altus, and House Speaker Charles McCall, R-Atoka, overwhelmingly passed the Oklahoma Senate by a vote of 40-3. The measure, however, was first laid out by the governor herself in a budget proposal earlier this year.
In a statement, Fallin maintains that the tax credits have, indeed, been “key to the growth of wind energy in Oklahoma,” where the industry supplies more than a quarter of the state’s electricity. Specifically, according to recent statistics from the American Wind Energy Association, wind’s share of total power generation in Oklahoma swelled from 18.4% in 2015 to 25.1% in 2016.
However, the Republican governor cites “challenging budgetary circumstances.” Though she notes the importance of the state’s “position as a prominent energy state,” she says it’s “time to ensure that Oklahoma has a bright future.”
Likewise, bill co-author Schulz said in a recent statement, “The zero-emissions tax credit did what it was supposed to do – help the wind industry get off the ground in Oklahoma. Our state ranks third in the nation in terms of wind power and will likely remain among the leaders in wind power for the foreseeable future. The state is facing extraordinary budget challenges, and we can no longer afford the zero-emissions tax credit. This measure provides certainty to the wind industry and stability in the long term for the state budget.”
In her recent budget proposal, Fallin said the wind industry was “incentivized sufficiently to now be a major player in the Oklahoma energy industry.” Moreover, she said the wind industry was also a “major winner of now-unnecessary incentives,” which referred to the production tax credits. (Notably, she also proposed a $0.005/kWh tax on wind produced in the state.)
Jeffrey Clark, president of The Wind Coalition, notes in a statement that the tax incentives “have helped Oklahoma bring much-needed diversification to its economy.” In addition, he says more than 7,000 residents “rely on wind energy for employment.”
Now, with the signing of H.B.2298, “the final wind energy tax incentive was eliminated.”
“As an industry, we are proud that these incentives worked so well for the benefit of Oklahoma, but we recognize that as an industry matures, incentives should be examined and adjusted to reflect that growth. We hope that other industries will recognize the state’s challenging fiscal situation and follow our lead.
“If it chooses to do so, Oklahoma can be a leader in the energy development that will drive our nation’s economy in the decades ahead,” Clark continues. “That includes natural gas, wind energy, solar power and energy storage.”
He adds, “While the path ahead for Oklahoma remains unclear, we look forward to working with state leaders to help them develop a plan to keep Oklahoma competitive for future investment.”
As pointed out recently by David K. Burton and Binyomin Koff of law firm Mayer Brown, wind farms now must be placed in service before the July 1 sunset in order to still be eligible for the tax incentives. In turn, they said, with such a short deadline, “Oklahoma wind projects that are already in construction – and are relying on the tax credits – may not be able to be placed in operation in time to qualify.”
In response to the newly signed legislation, Burton says, “It is unfortunate that Oklahoma is giving up its position as a leading state for wind-friendly policies. The decision has already caused developers to not site projects in Oklahoma. Future generation of its citizens will regret not having those projects in their state, providing operations and maintenance jobs and paying property taxes to local governments and ground rents to landowners.” – Betsy Lillian
Environment Minister Lauds Renewables
The Alberta government’s efforts to encourage development of the province’s abundant wind energy resource and diversify its fossil fuel-dependent economy have captured the attention of investors, who see a long-term opportunity for growth in the market, according to Shannon Phillips, Alberta’s minister responsible for the Climate Change Office, speaking at the Canadian Wind Energy Association’s (CanWEA) Alberta Summit.
“Our government’s renewable energy program is part of a made-in-Alberta plan to create jobs, diversify our economy, attract investment and reduce carbon pollution. The strong interest shown by [the] industry ensures a highly competitive process that will allow us to achieve all of those goals at the lowest possible cost,” says Phillips.
The Canadian wind industry sees Alberta as an emerging market. Alberta has 1,479 MW of wind energy – the third-largest installed capacity among Canadian provinces. Wind currently supplies about 6% of the province’s electricity demand, and Alberta’s target of 30% renewable electricity by 2030 has made it the leading market for new wind energy development in Canada, according to CanWEA.
With billions of dollars of new investment expected to flow into the province as it adds 5,000 MW of new renewables to its grid over the next 14 years, delegates discussed opportunities for Alberta-based companies to generate new business by participating in the wind energy supply chain.
McAuliffe Takes Action On Emissions, Clean Energy
Gov. Terry McAuliffe, D-Va., has taken executive action to reduce carbon emissions across the state. Under the newly signed Executive Directive 11, the governor is instructing the state’s Department of Environmental Quality (DEQ) to begin the process of establishing regulations in Virginia that will reduce carbon emissions from power plants.
“The threat of climate change is real, and we have a shared responsibility to confront it,” says McAuliffe. “Once approved, this regulation will reduce carbon-dioxide emissions from the commonwealth’s power plants and give rise to the next generation of energy jobs. As the federal government abdicates its role on this important issue, it is critical for states to fill the void. Beginning today, Virginia will lead the way to cut carbon and lean in on the clean energy future.”
The directive follows Executive Order 57, which required the state’s secretary of natural resources to convene a work group to study and recommend methods to reduce carbon emissions and build Virginia’s clean energy economy, according to an announcement from the governor’s office.
Further, the news release says, Executive Directive 11 is designed to ensure Virginia’s regulation is “trading-ready” and includes a structure that enforces carbon-reduction mechanisms.
According to the release, Virginia is already experiencing the effects of climate change in its coastal regions due to rising sea levels. In addition, the impacts extend far beyond the coast: Half of Virginia’s counties are facing an increased risk of water shortages by 2050 as a result of climate-related weather shifts.
“As a Virginia-headquartered company, Mars applauds Gov. McAuliffe’s new regulatory action to reduce carbon emissions and promote renewable energy and efficiency,” comments Kevin Rabinovitch, global director of sustainability for Mars. “At Mars, we believe climate change is real, and business and government need to work together to address it. This action by Gov. McAuliffe is timely and critical to achieve a clean and efficient energy transition.”
Since the beginning of the McAuliffe administration, the commonwealth has seen an increase from just 17 MW of solar installed to more than 1,800 MW of solar currently in service or under development, the release says. In addition, revenues in the clean energy sector have risen from $300 million to $1.5 billion between 2014 and 2016.
Recently, the Virginia DEQ approved a “permit by rule” (PBR) application for Rocky Forge Wind, a 75 MW wind project being developed by Apex Clean Energy in Botetourt County. According to Apex, it marked the first PBR approval for a wind farm in Virginia.