Indiana experiencing surge in wind power market

Willis Ladd counts them through the little window above his kitchen sink. One, two, three, four … 31 wind turbines.

Willis and his wife Noramae have lived in their home on Indiana Highway 13 near Elwood for over 40 years.

And in that time, the view from their kitchen has stayed almost the same — flat farmland, running from the edge of their roughly 2-acre yard until it hits the horizon.

That changed this year, when construction started on the first phase of the Wildcat wind farm, a 125-turbine, 200-megawatt project spread across 8,500 acres in Madison and Tipton counties.

The turbines will produce enough energy to power 60,000 average American homes for a year, Andy Melka, Wildcat project developer, told The Herald Bulletin. One hundred megawatts per year will be sold to Indiana Michigan Power for distribution.

E.ON Climate and Renewables has invested $400 million in building phase one of Wildcat — $3 million per turbine, plus the costs of construction.

After the initial costs of building the turbines and other expenses like paying 130 lease contracts — between $20 million to $25 million over the 30-year expected lifespan of the turbines — to landowners, the costs of producing electricity from wind is relatively low, Melka said.

"Wind is one of the cheapest, if not the cheapest, new source of electrical generation in this country," he said.

Environmentally, wind is also a comparatively clean alternative to generating electricity with fossil fuels, said Scott Rice-Snow, a geological sciences professor at Ball State University.

One of the big by-products of fossil fuel-based production is carbon dioxide, which, along with other so-called "greenhouse gases" like methane and nitrous oxide, are believed to affect changes in the global climate by trapping heat from the sun.

It's an over-simplification, but think of a car on a sunny day, Rice-Snow suggested. "The window lets heat in but makes it harder for that heat to get out." And the amount of greenhouse gases in the atmosphere is going up. Fast.

According to the U.S. Energy Information Association, the levels for many important greenhouse gases have gone up about 25 percent in the past 150 years. Over the past 20 years, the majority of man-made carbon dioxide emissions — about three-quarters — came from burning fossil fuels.

In 2010, the EIA estimates Indiana released more than 116 million metric tons of carbon dioxide to produce its electricity, 4.9 percent of the county's total. It also released 384,961 metric tons of sulfur dioxide and 120,437 metric tons of nitrogen oxide.

But that could change.

Indiana has a wind resource of 148,228 megawatts, the 15th biggest in the country, according to industry trade group the American Wind Energy Association.

That might be one reason for a recent surge in its wind power market. In 2011, turbines made 2.7 percent of the state's total energy, enough to power 325,000 homes, it said.

In May 2011, Indiana voluntarily adopted a Clean Energy Portfolio Standard, which, by 2025, aims to see 10 percent of its electric generation produced by clean sources like solar and wind.

Indiana "has a pretty significant wind resource that's not being exploited," Rice-Snow said.

Not counting Wildcat, there are 11 wind projects installed in Indiana, according to the state's Office of Energy Development. That's a grand total of 805 up-and-running turbines, generating 1,343.2 megawatts.

There are more projects on the horizon. For example, in November, the Tipton County Council approved an application from juwi Wind energy group to put up to 94 wind turbines in Prairie Township, starting as soon as 2015. Instate, the AWEA says there are 8,426 megawatts-worth of wind projects in queue.

E.ON Climate and Renewables estimates every megawatt of wind power is equivalent to taking 315 cars off the road, and avoids the release of 1,800 tons of CO2 per year.

That's one reason Terry Williams and his family agreed when E.ON approached them about the turbines, seven of which will be on land owned by members of his family and their corporation.

He remembers unloading corn with his 8-year-old granddaughter while workers were building the closest turbine to his house, said Williams, 63, of Elwood.

He likes the financial incentives, but the environmental ones are good for the future of his family, too, he said. "We're going to be part of the solution."

And, on a broader scale, there's the boost to the local economy, said Elwood planning commission president Bill Savage.

Projections showed the project could generate $11 million in property tax revenue over 10 years, but a tax abatement package approved by the Madison County Council will lower the actual taxes due to about $5.1 million.

The AWEA says wind energy accounted for over $21 million in annual property tax payments by Indiana wind project owners in 2010.

That's good for Elwood, Madison Co. and the state "not only now, but in the long-term," Savage said.

And "it's put us (Elwood) on the map," he said.

He's taken to calling the portion of State Road 28 running between Alexandria and Elwood the "Renewable Energy Industrial Corridor" — a name he hopes will stick.

Wind energy supported 1,000 to 2,000 jobs in Indiana in 2010, says the AWEA. It also said "many smaller Indiana companies have found a role in the wind energy supply chain," by building parts and wind equipment.

But on the national economic stage, Wildcat's construction crews, along with others in the wind power market, are racing against a ticking clock.

When 2012 expires at midnight on Dec. 31, so too could a tax subsidy for new development that's proven vital to the expansion of the wind industry, say proponents.

Melka said White Construction crews are on track to finish all of the 125 turbines in the first phase by that deadline. They had 106 finished by Friday.

But there are three more phases, he said. Two of those would involve building as many as 190 more turbines capable of producing a combined 225 megawatts of electricity to the north in Howard and Grant Counties.

The details for a fourth phase aren't quite set, but could see an additional 100 to 250 megawatts of power produced in Tipton Co., he said.

That is, if Congress votes to give the tax credit a favorable wind.

Melka said phases three and four are "still too preliminary" to say, regardless of the credit. But for phase two, the tax credit will play a big part in deciding if it would go forward, he said.

And that's true for much of the wind industry, said Michael Hicks, an economist at Ball State University.

While it might still be viable to use existing turbines, "if the incentives went away, it might mean we see less new or future investment," he said.

The tax incentive for wind power has expired multiple times, each time taking the wind out of wind power's sails, so to speak.

U.S. tax credits tend more toward fossil fuels. That needs to change if there's ever going to be a "real market for wind and manufacturing in the U.S. to compete globally," said the AWEA. "The U.S. needs to provide a long-term, clear and consistent policy signal."