Uncertainty over a key federal tax credit in 2012 led to a steep drop in the number of wind farms installed this year, but the pipeline is starting to fill back up with Oklahoma at the forefront.
The latest market report from the American Wind Energy Association shows utilities signed deals this year for 1,049 megawatts from planned Oklahoma wind farms. That's about 14 percent of the 7,500 megawatts in wind power purchase agreements signed nationally so far this year.
“Oklahoma is really leading the country for new wind builds over the next few years,” said Emily Williams, senior policy analyst with the association. “Oklahoma and Texas are really going to be the heartland of a lot of wind activity.”
Wind farm construction completed this year has amounted to just 71 megawatts, Williams said. That compares to more than 13,000 megawatts that came online in 2012. She said this year's decline can be attributed to uncertainty over renewal of the federal production tax credit, which gives producers a 2.3 cent credit for every kilowatt hour of electricity generated from wind.
“Because of that, developers didn't place turbine orders and they didn't start construction on projects, and we really saw a halt of the industry,” Williams said.
Congress renewed the production tax credit for electricity from wind production shortly after it expired at the end of 2012. The renewal is for one year and expires again Dec. 31. It includes a new provision that allows projects to qualify if they start construction in 2013 but aren't yet generating electricity.
Most of the planned wind capacity for Oklahoma comes from Tulsa-based utility Public Service Co. of Oklahoma, which last month announced agreements for 600 megawatts from three wind farms to be built in the state. One megawatt can power about 200 homes during peak demand times.
PSO, a unit of American Electric Power Co. Inc., originally asked wind providers to bid for 200 megawatts but signed deals for three times that amount. PSO will begin taking electricity from planned wind farms in Seiling, Balko and Goodwell in 2016. The utility filed an application with the Oklahoma Corporation Commission last week to begin the process of cost recovery for the wind power purchase agreements.
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