Tax credits, trades, turbine counts hound wind power in Pennsylvania 

States can rely on renewable energy sources such as wind to meet the federal Clean Power Plan’s requirement to cut carbon emissions by 2030, but regulators and environmental advocates don’t know how much of a role wind will play in Pennsylvania’s framework.

The state is 16th in the nation for installed wind energy capacity – about 1,340 megawatts, less than what a single coal-fired plant can provide – and it has not expanded much in the past few years.

“It’s certainly something that we want to take a look at,” state Department of Environmental Protection Secretary John Quigley said when asked how wind would figure into the plan his agency is writing to meet federal requirements, due next September.

The Clean Power Plan that the Environmental Protection Agency released this summer includes three major building blocks that states can employ: improving the energy efficiency of coal-fired plants, switching from coal to natural gas, and increasing the use of renewable energy. In Pennsylvania, wind accounts for most of the renewable source.

Environmental advocates, especially those opposed to further natural gas development, want the state to rely on that third block.

“When you put any clean, renewable energy on the grid, that’s that much fossil fuel that you’re not burning,” said Rob Altenburg, director of environmental group PennFuture’s Energy Center in Harrisburg.

Uncertainties over tax incentives for wind, rules regarding energy credit trading and questions over how to count turbines in the EPA plan cloud its chances for inclusion in the state’s proposal.

“We expect that the state is going to take advantage of renewable energy to meet the plan,” Altenburg said. “How much renewable energy is going to play a part (is unknown).”

Quigley said the DEP is looking for data from the wind industry and other sources to determine how much renewable energy it can rely on to hit the goal of cutting carbon emissions by 33 percent by 2030.

One of 14 state hearings at which DEP is collecting comment on the plan is scheduled for 6 p.m. Monday at Carnegie Mellon University.

The state has 720 turbines at 24 sites, according to the American Wind Energy Association in Washington.

There is potential for more wind power development in Pennsylvania, but questions over several types of credit are hindering it, Altenburg and others said.

Under the state Alternative Energy Portfolio Standard program, for example, an annually increasing percentage of electricity – 8 percent by 2020 – sold to retail customers in the state has to come from a renewable energy source.

But a power company in Pennsylvania can buy renewable energy credits from generators in the 13 states served by regional grid operator PJM Interconnection. Other states limit the number that can be bought out of state and/or place more value on their in-state credits.

That has resulted in Pennsylvania credits flooding the market and losing their value, Altenburg said.

A separate federal wind production tax credit expired at the end of 2014. Turbine owners for 10 years could collect 2.3 cents per kilowatt hour as a tax credit, said Bruce Burcat of the Mid-Atlantic Renewable Energy Coalition in Delaware.

Counting on getting those credits can reduce the projected cost of a wind farm, which runs about $200 million to build in Pennsylvania, he said.

“They plan those wind farms to include the production tax credit, and therefore, not having the certainty of the production tax credit leads to uncertainty by developers as to whether they can build in certain areas,” Burcat said.

To be included in the state Clean Power Plan, it is likely that only turbines built after 2012 can count toward carbon reductions, Altenburg said. None was built in Pennsylvania after 2012. Older turbines that are upgraded or retrofitted in some way to improve capacity after 2012 might get credit.

“The department can craft a plan that takes credit for out-of-state reductions, but it’s difficult to estimate which sources will be available without seeing the details of the plan,” Altenburg said.