Power places - 7. Iowa

WORLDWIDE: The Hawkeye State swoops in at number seven on a tie-break. Its Power Places factor of 39 is identical to that of Saxony-Anhalt, but the state in the middle of America's Heartland nicks seventh courtesy of its overall potential for development. Our researcher GL Garrad Hassan, considers it a bigger potential market than its German rival, which it pushes back into eighth place.

Iowa is one of the lesser known states in the US and yet, in terms of wind capacity, it is up there at the very pinnacle of the sector. Indeed, it is the leading state in the US, after Texas, in terms of installed capacity, reaching nearly 3.7GW by the end of 2009.

And little wonder. Iowa has a long history of supporting renewable energy. Iowa adopted the first renewables portfolio standard in the US in 1983. And wind power here has developed strongly, particularly in recent years. Apart from its alternative-energy law, whose target has already been surpassed, Iowa supports the development of wind power through incentives. In 2005 the state started offering tax credits of $0.015/kWh produced by renewable energy.

Although Iowa's tax break was a limited programme, it had an impact on development in the following years. Today, there are property and sales tax exemptions for wind equipment.
Iowa is developing as a wind industry hub. As a result of its efforts, the state managed to attract a number of manufacturing companies, which have together created up to 10,000 local jobs in the industry, according to estimates from the state government.

This increased acceptance of the technology is a driver for further development of wind power.
To supply skills to the industry, the state education system has developed wind-specific programmes. The first two-year training programme in wind energy and turbine technology in the US is offered at Iowa Lakes Community College. The Iowa Alliance for Wind Innovation and Novel Development connects Iowa's three universities, seven community colleges and the wind energy industry to offer bachelors' and masters' degrees, for example.

Iowa also benefits purely from being in the US. Since the centre-left Democrat Barack Obama took power as US president, the federal government has been keen to promote wind power and other renewables with federal incentives. Obama's 2009 economic stimulus package has had a generally positive impact on the wind market through the extension of the production tax credit (PTC) until 2012, the option to choose a 30% investment tax credit instead of the PTC, and tax credits for new manufacturing facilities.

Yet Iowa is limited by that bane of all large, rural wind regions - lack of transmission. A shortage of line capacity is beginning to restrict further growth of wind farms in the state. It is expected that, although matters are less urgent than in Texas, transmission constraints will significantly increase in the next few years unless additional capacity is installed. To expand transmission capacity, Iowa must agree with other states on transmission projects, which poses a further difficulty. Still, the state and its neighbours in the Midwest ought not let their prospects be choked by a technological deficit. Studies show that new high-voltage transmission could provide approximately 12GW of additional capacity across the wider area.

Iowa, United States

FOR

  • Tax breaks
  • Ambitious renewables targets
  • Regional government support
  • Wind industry cluster
  • Tailored education network

AGAINST

  • Transmission shortage

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