United States

United States

Windiest state passes incentives -- Joint marketing with lignite

North Dakota lawmakers are pushing incentives through the legislature that could attract large scale wind development. The sparsely populated state is widely believed to have the most wind potential in the US but only has five commercial wind turbines in operation. Three bills have passed the state House of Representatives and are now before the Senate. While the new laws are encouraging, they do not deal with the serious problem of how to get the potentially massive amount of wind energy to market. Currently half of the energy produced in North Dakota is exported.

Lawmakers of a sparsely populated state widely believed to have the most wind potential in the US -- but with only five commercial wind turbines now in operation -- are pushing incentives through the legislature that could attract large scale wind development. While the new North Dakota laws are economically encouraging, however, they do not deal with the serious problem of how to get the potentially massive amount of wind energy to market.

Three bills have passed the state House of Representatives almost unanimously and are now before the state Senate, where approval is also expected, reports Jay Haley, a wind advocate in North Dakota and principal in EAPC Architects & Engineers. The very existence of the bills and their easy journey through the legislature has already attracted more than 20 developers from all over the world -- some of whom are already signing land leases, Haley says. "It's a Who's Who of major developers and some small ones," he says.

One of the bills sinks the property tax rate on wind turbines and equipment by a factor of two and a half so that it is on a par with that of the fast growing energy market in neighbouring Minnesota. Another bill exempts wind from a sales and use tax. Haley says the two bills do not ask for anything more than the incentives coal already gets. "We just want to be treated the same," he says.

The third bill is designed to encourage renewable energy development, offering an income tax credit of 3% of the installed capital cost for the first five years of operation.

The problem with developing wind resources in North Dakota is getting the energy to available markets, which are all out of state, Haley says. North Dakota coal plants produce about 4000 MW of electricity now, but with a population of only 650,000, half of the energy is exported. The state's wind potential is estimated at 138,000 MW, he says.

Justifying transmission

"Right now we're talking with the lignite industry to work on large scale joint marketing efforts," he says. "Together, if we can get a large load out of state, we can justify the transmission to get the energy there." Meantime, Haley thinks wind can be developed in small pockets where the transmission grid can handle 5-100 MW of added generation. "Hopefully, that will fuel the wind industry while we are working on getting some larger projects."

It is not the first attempt to pass favourable wind legislation in the state. A modest bill to study wind's feasibility was introduced two years ago but was clobbered by the powerful utility and coal lobbies that control North Dakota energy production. This time, the wind lobby laid a more solid groundwork," Haley says. It held a wind conference for lawmakers which "helped send a message to legislators of wind's intense popularity." The strategy worked, and not only in state congress. It also helped gain the support of the coal and utility industries.

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