CONGRESS last year declined to cut taxpayer ties to wind energy production. Now, Oklahoma Gas & Electric is cutting the cost of wind power. These two developments aren’t directly related. They’re sidebars in the ongoing growth of an alternative energy source that will be increasingly important to fossil fuel-rich Oklahoma.
Wind power still accounts for just 3.5 percent of the nation’s energy mix. In Iowa, the state that’s embraced wind energy like no other, the figure is 24.5 percent. Some states, notably those in the Southeast, have virtually no wind power production.
At the eleventh hour in 2012, Congress extended the Wind Production Tax Credit, a subsidy worth 2.3 cents per kilowatt-hour. The months leading up to the extension saw a curtailment of investment in wind energy projects as developers worried the subsidy would be gone after Jan. 1. Congress extended the tax credit, but only for one year. Expect to see more wrangling as 2013 draws to a close.
Sooner or later, the industry must stand on its own. Even those who profit from wind power realize this. The only question is how soon the cutting of ties should occur.
OG&E has a modest upcharge for customers who want power generated by wind. The company just announced that the differential will be about half of what it was. Customers who specify that 100 percent of their electricity come from wind power will pay about $3.50 a month more. Such a modest difference incents customers to insist on wind power. The tax credit is likewise an incentive for wind power developers.
Iowa dominates in the field because of state policies friendly to wind power and a lack of local opposition to turbines, according to a roundup of wind power trends by Stateline.org. Other states aren’t as friendly. Some don’t have enough wind on a consistent basis, yet all U.S. taxpayers subsidize wind energy production.
Iowa isn’t as windy as Oklahoma or Texas, the state that leads the nation by far in the amount of power generated by wind (but not in the percentage of its energy portfolio produced by wind). Oklahoma has seen steady growth in its wind energy production, partly as a result of federal and state tax incentives. The state now has more than 20 operating wind farms; its national ranking in wind energy production is on the rise.
The renewables portion of a state’s energy portfolio (the mixture of sources for energy production) can include wind, solar, biofuels and other sources, but in Oklahoma wind is the primary component. It has helped the state get ahead of schedule in a quest to stock its energy portfolio with at least 15 percent from renewables by 2015.
Oklahoma’s wind energy potential seems limitless, given the amount of land and the way the wind blows. Customers in low-wind states to the southeast will be using electricity generated by Oklahoma wind. Any notion that increasing the wind portion of the state’s energy portfolio is a detriment to oil and gas is shortsighted. As the nation moves away from coal to make power and moves toward exporting natural gas to foreign nations, wind has a growing place in Oklahoma’s energy economy.
Stateline.org reports that Texas is a key testing ground for the relationship between natural gas and renewables because it produces more of both than any other state. Recent research says gas and wind aren’t hurting each other but instead are eroding the coal market. And as we know, the wind doesn’t always blow.
In the future, during times when the wind isn’t blowing, natural gas may produce all the power that coal is now making in Oklahoma — a state that today imports Wyoming coal while exporting gas and wind power.