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Wind power could bring state economic windfall
By Dan McCue
Staff Writer
Standing before a series of maps depicting the wind gradients along the South Carolina, North Carolina and Georgia coasts—a region referred to by scientists and cartographers as the “South Atlantic Bight”—Nicholas C. Rigas was making the case for wind science being a tool for economic development.
“People look out here and equate the ocean winds with megawatts, but for many people, that’s not a compelling argument to support the massive investment it will take to build a wind farm out here,” said Rigas, the director of Clemson University’s Institute for Energy Studies, as his right index finger traced a line on the sea.
“What they should be talking about as well is the huge economic development potential this alternative energy source holds for the port communities of states that embrace this technology. Not only will you need the port facilities to take the turbines and mono-piles out to sea, you’ll also need operational and maintenance people for the machines.”
While wind power is, and should continue to be, thought of as green energy, its harvesting has already proven to be the support for a large industry in the European countries that have taken the lead on its deployment, Rigas said.
“That’s why we’re here and hoping South Carolina takes notice,” he said. “Because if North Carolina or Georgia takes the lead on this, either would be able to serve South Carolina from its facilities as well.
“What that will mean is that while South Carolina would benefit from its use of wind power, it would lose the economic benefits of having wind power-related companies clustering around the Port of Charleston or Port of Georgetown.”
Standing room only
Rigas made his comments during a break between sessions at the Southeast Regional Offshore Wind Power Symposium on Feb. 26 and 27 at the Historic District Embassy Suites in Charleston.
More than 140 registrants, including representatives of all the major utilities serving residents and businesses in the tri-state region, were on hand to hear what researchers from Clemson University, North Carolina State University and the Georgia Institute of Technology had to say about the viability of wind power in the Southeast, what it might cost and how the public and government officials can be inspired to buy into it.
Sponsors for the standing-room-only event included the Savannah River National Laboratory, the U.S. Department of the Interior’s Minerals Management Service, the S.C. Energy Office, Santee Cooper and Coastal Carolina University.
Wind energy, Rigas said, is a clean, renewable source of energy, the technology for which has already been proven in a host of European nations including Ireland, Germany, France and Denmark.
He cited environmental concerns and a desire for energy security and diversification in an uncertain world as reasons wind power has caught on so widely in Europe, but said while those same influences should make it attractive here, the United States has been far slower to embrace it.
Roger Flynn, a doctoral student at Clemson’s Strom Thurmond Institute of Government and Public Affairs, said so far the state and federal governments in the United States have demurred from emulating the steps taken in Europe to promote wind power.
These include creating a market for alternative energy by placing higher taxes on fossil fuels, providing subsidies to keep the costs associated with alternative energy sources low and providing regulatory and policy stability to encourage investment.
This situation is particularly nettlesome in the Southeast, which social scientists characterize as having a traditional political and social culture that prefers making slow, steady adjustments to existing policy instead of drastic changes in direction, Flynn said.
“As a result, it’s a culture that prefers incentives to the mandates put in place in many European countries and one that would look askance at a fossil fuel tax, to cite two examples,” he said.
“Here in the Southeast, lawmakers and the public would be far more comfortable with augmenting incentives with low-cost, low-interest loans and rebates. The problem is these kinds of things don’t appear to work very well when it comes to the creation of a $700 million or $1 billion wind farm.”
Governmental involvement needed
As an option, Flynn urged local governments to sign long-term contracts for a specific amount of green energy as a way to lead by example and begin to establish a customer base for the utility or developer who takes on the risk of creating a wind farm.
He also proposed the creation of a Southeastern Green Power authority to share the investment risks, revenue and environmental benefits of creating such a facility.
“You could provide each investor with a percentage of the energy produced to either use themselves or to sell on the open market,” Flynn said.
State lawmakers should urge their counterparts in Washington, D.C., to be more proactive about renewing the federal Production Tax Credit for Renewable Energy, he said.
Originally enacted as part of the Energy Policy Act of 1992, the tax credit for the production of wind power and other bioenergy resources has been allowed to sunset more than half a dozen times in the intervening years, only to be renewed again later.
It is next set to sunset on Dec. 31, 2007.
“Uncertainty over the tax credit makes it very difficult to convince people wind power is a worthwhile, viable investment,” Flynn said.
He also said the public needs to understand that while a local utility like Santee Cooper might be producing a certain percentage of green power, large businesses in their community that buy green power will likely be buying it from entities in other states that have made bigger investments in the technology.
“Whole Foods Market, Starbucks, Staples, Office Max, Safeway. These are some of our top non-residential green power consumers, but in most instances, the vast amount of the money they’re spending on green power is going elsewhere,” Flynn said. “If the public could be made more aware of that, I think they’d push for money for green power in their own states.”
He also said he believes taxpayers would shrink less from the idea of providing subsidies to the alternative fuel industry if they were made to understand that similar subsidies have been provided to the fossil fuel industry for nearly 100 years.
These subsidies now range between $4 billion and $30 billion annually, according to Taxpayers for Common Sense, a nonprofit watchdog group in Washington, D.C.
For his part, Rigas refrained from getting involved in the political discussion, instead preferring to focus on the possibilities of wind power farms along the South Atlantic Bight.
“Let’s make sure those issues are addressed certainly, but then let’s get to work on a management project, one that will produce 100 to 200 megawatts of electricity,” he said.
“I’m very confident in the promise of wind power. I believe in it. At the same time, it’s not a panacea, but it will greatly diversify our energy risk.”
Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@charlestonbusiness.com.
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