United States

United States

Subsidy secured

Roughly $70 million in state subsidies will soon be made available to give California wind farm operators an additional payment of over a half a cent a kilowatt hour beginning next year. The money is coming out of a pool of $540 million earmarked for renewables in a bill designed to ease the way for clean power technologies in California's deregulated electricity market.

California wind farm operators can breathe a little easier knowing that roughly $70 million in state subsidies will soon be made available to give them an additional payment of over a half a cent a kilowatt hour beginning next year. The money is coming out of a pool of $540 million earmarked for renewables in a bill designed to ease the way for clean power technologies in California's deregulated electricity market, effective from January 1.

The bill, due to be signed into law before the end of the year, guarantees existing wind projects 13% of the total $540 million, or $70 million -- amounting to a $0.007/kWh supplement for wind developers. Nancy Rader of the American Wind Energy Association has fought long and hard for a fair deal for wind in the run up to California's launch into competition. She describes the latest activity in the legislature as "very positive" for the wind industry.

She disagrees, however, on the chosen legislative approach. A surcharge approach to funding renewables invites "political, contentious and ongoing" infighting among renewables such as wind, geothermal and solar. She continues to stump for the "renewable portfolio standard" (RPS), which obliges generators to supply a fixed amount of power from renewable sources, as a superior approach because it lets market forces rule, instead of the whims of politicians. The RPS is good "if you believe in competition," while a surcharge is preferable, "if you believe in politicians," she says.

The new legislation also sets aside $54 million for "emerging" technologies, authorising that wind turbines smaller than 10 kW are eligible for this category. The photovoltaic industry had attempted to seize a greater share of this pot of cash by arguing that wind was not an "emerging" technology. From small wind turbine maker Bergey Windpower, Mike Bergey had fought back. "The PV industry has already received far more subsidies than small wind turbines," he had argued. Rader points out that an RPS would be a way of avoiding this kind of infighting. The funds will be awarded through a competitive application process.

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