December 31, 2012

Wind industry: Tax breaks key

Credits due to expire unless Congress acts help stabilize the market for six Maine projects as they try to boost their output.

By Tux Turkel
Staff Writer

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In this July 2009 file photo, wind turbines are seen on Stetson Mountain in Washington County.

AP file photo

The information shows that performance varied greatly by site and season. As a rule, Maine's wind farms generate the most power during the winter, less in the spring and fall, and the least in the summer. First Wind's project at Mars Hill in Aroostook County tallied a top capacity factor of 44 percent during the winter. On the other end of the scale, the Kibby Mountain project had a capacity factor of 14 percent during the summer months.

But other factors can drag down the numbers, operators say.

For instance, Record Hill's capacity factor in the fall of 2011 was less than 6 percent because the project had just started up midseason. That reduced the first-year, annual capacity factor to less than 20 percent. Rob Gardiner, a former owner and developer of the project, said he expects robust generation this winter to boost the annual capacity factor to 34 percent.

First Wind's projects in eastern Maine -- Stetson 1, Stetson 2 and Rollins -- averaged roughly 23 percent over the 12-month period. They could have approached 30 percent, according to John Lamontagne, a First Wind spokesman, but the company was asked to curtail generation during construction of a new transmission line.

Both Gardiner and Lamontagne say technology changes and improved designs will bring up the annual capacity factors of Maine's wind fleet.

Gardiner noted that Record Hill has larger, more-efficient turbines that are proving to be very reliable. Wind power's high output in the winter is a good match for New England's energy demand, he noted.

First Wind recently brought a new project online, near Ellsworth. The Bull Hill wind farm is located on low ridges, but it features 310-foot-tall towers that catch more wind and increase capacity, Lamontagne said.

Gardiner also cautioned that wind capacity factors should be put in context with other forms of generation. For example: The nation's hydro-electric dams averaged 40 percent in 2009, according to the U.S. Department of Energy.

Power plants that are needed to supply basic around-the-clock energy stay on for longer periods. Agency data show nuclear reactors averaged 90 percent, and coal-fired plants averaged 64 percent. Plants that run on natural gas averaged 50 percent, during hours of peak demand.

Natural gas generates half the electricity in New England. That makes the price of natural gas critical to what Mainers pay for electricity.

Wholesale electricity prices this fall have been in the $35 per megawatt-hour range, which is very low. By comparison, Maine's six leading wind farms produced power over the 12 months ending in September at an average of $38.07 per megawatt-hour, FERC data show.

As 2012 comes to a close, the outlook for the production tax credit is uncertain. On three occasions, Congress allowed the credit to expire at year's end, then restored it when lawmakers reconvened.

Beyond the tax credit, the wind industry is counting on fossil fuel prices -- notably natural gas -- to start rising again. Because wind has no fuel costs, it can offer stable rates over 20 or more years, Salerno, at the wind energy association, noted.

"The ultimate factor that matters is price per kilowatt hour," she said.

Maine Wind Farm Actual Output
The six major wind-energy projects in Maine on average generated only 25 percent of their total potential power over the 12-month period ending in September, according to the Federal Energy Regulatory Commission. The 25-percent figure is in line with New England's sporadic wind conditions, and is one reason the industry wants Congress to extend a tax credit that creates an incentive for power production.
Maine Wind Farm Potential Output
Megawatts Capacity:
SOURCE: From FERC Spreadsheets

Staff Writer Tux Turkel can be contacted at 791-6462 or


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