Obama Calls for Clean Energy

Last Tuesday night during the State of the Union address president Barack Obama made a big push for renewable energy. The president stated that the nation should develop 80 percent of its electricity from clean sources by 2035 and pursue and research development projects to be financed by killing $4 billion in annual tax subsidies for oil, gas and other fossil fuels.

The White House believes that domestic production of wind, solar and other types of clean energy helps to underscore its prime time focus on clean energy as well as innovative technologies that make them cheaper and more reliable.

President Obama’s 2012 budget will increase clean energy technology funding by one-third when compared to last year or to about $8 billion. “Instead of subsidizing yesterday’s energy, lets invest in tomorrows,” said Obama.

Going forward wind and solar companies would also like to see a long-term extension of the popular government 1603 grant program, which allows companies to obtain grants instead of investment tax credits.

Clean energy advocates have also supported the creation of a national renewable energy standard. This would force companies to generate a certain percentage of their electricity from renewable energy sources.

For more on Obama's clean energy push click here >

India’s Inox Wind Orders More From American Superconductor

Inox Wind Limited of India has placed a $9 million follow-on order for a wind turbine electrical control system from American Superconductor (AMSC). AMSC is gaining a business presence in India with multiple orders for its products being used on renewable energy projects. In August AMSC received an initial order for 17 of the companies electrical control systems and another $20 million order from Ghodawat Energy in April of last year.

Inox will use the systems in its 2MW wind turbines and has the ability to manufacture 400 annually. India is currently the 5^th largest wind energy market in the world and is expected to double its capacity within 4-5 years.

“India has one of the fastest growing economies in the world,” said Devansh Jain, Director of Inox Wind Limited. “When considering our rapid urbanization and industrialization combined with our need to reduce pollution and increase electricity generation, it is imperative that we continue to promote and produce zero-emission electricity from sources such as wind. Our partnership with AMSC has enabled us to enter full-scale manufacturing quite rapidly, taking us one step closer to our goal of becoming a leader in the global wind power marketplace.”

U.S. Market Report shows high Wind Energy Investment in 2010

A recent U.S. Market report from Peachtree Capital Advisors showed the wind industry with 4.8 billion in transactional value in 2010. A bulk of the investment was seen in energy generation projects for wind.

The report showed a large portion, 85 percent, of the federal money allotted to subsidize renewable energy generation construction went to wind companies.

The report supported continued investment in 2011 in renewable energies, specifically wind, because of less initial investment and quicker returns than other renewables like solar and biofuels.

Read the full article on reuters.com and view the complete report.

The report argues the losers in 2010 were bioenergy firms, who say a 27-percent decline from 2009 investment. The article supports that higher investment needs due to high demands of R&D and time for this market is holding back investment. Do you agree?

Magnetek Receives Orders Valued at Over $8 Million for E-Force® Renewable Energy Inverters

Wisconsin Wind Works Member Magnetek sees over $8 Million of orders for its E-Force^® inverters for variable speed turbine generators.  The orders represent a new market for Magnetek and have come in over the past five weeks, to be delivered April 2011 and July 2011.

Wisconsin Wind Works supports Magnetek’s recent successes in the wind industry and forwards their progress update on to all Wisconsin Wind Works members. 

Read the full press release, as well as information on Magnetek, Inc., below.

Menomonee Falls, Wis. –January 10, 2011–Magnetek, Inc. (NYSE: MAG) today announced that it has received production orders over the past five weeks for its E-Force^® power inverters valued at over $8 million. Magnetek's modular utility-scale power inverters regulate and transform DC power generated by renewable sources into utility-grade AC power, which is distributed to the power transmission grid. The orders received include inverters for wind turbines as well as an initial production order valued at nearly $1 million for inverters to be used in the operation of variable speed turbine generators for combined heat and power (CHP), a new market for the Company.  The orders are currently scheduled for delivery between April 2011 and July 2011.

“We are pleased to receive these additional inverter orders. The use of our E-Force inverters in CHP turbine power generation is an exciting new application for our products and furthers our goal to become a major provider of utility-scale power inverters for renewable energy applications,” said Ed Butte, Magnetek’s Director of Renewable Energy.  “We continue to actively quote applications beyond wind and see this order as a solid sign that the benefits of variable speed technology are being recognized in other markets.”

About Magnetek, Inc.

Magnetek, Inc. is a leading provider of digital power and motion control systems used in energy delivery, overhead material handling, and elevator applications.  In addition to power conditioning products for renewable energy applications, the Company is North America’s largest supplier of digital drive systems for industrial cranes, hoists, and monorails. Magnetek provides Energy Engineered^® drives, radio remote controls, motors, and braking and collision avoidance subsystems to North America’s foremost overhead material handling crane builders. Magnetek is also the world’s largest independent builder of highly integrated digital motion control systems for high-rise, high-speed elevators and is a leading independent supplier of digital motion control systems for underground coal mining applications. Magnetek is headquartered in Menomonee Falls, Wis., in the greater Milwaukee area and operates manufacturing facilities in Pittsburgh, Pa., and Canonsburg, Pa., as well as Menomonee Falls.

http://www.magnetek.com/

Milwaukee Considering Lakefront Wind Turbines

The city of Milwaukee has seen a lot of development along its lakefront in the past couple of years with such projects as the Milwaukee Art Museum renovation and the building of Discovery World on Pier Wisconsin. Currently the city is seeing another high-profile project that could add more landmarks to the lakefront.

Milwaukee officials are considering installing one to three wind turbines near the Lake Express car ferry terminal or by the Port offices in Milwaukee's, Bay View neighborhood. City officials are considering if Milwaukee should follow in other Great Lake cities footsteps such as Toronto and Cleveland and erect wind turbines in an urban setting.

"If the project is approved," said Erick Shambarger, a city environmental sustainability manager, "the project would be funded by the federal economic stimulus package."

"No property tax dollars would be involved," Shambarger stated, "The purpose is to power the Port administration building with renewable energy."

Milwaukee is allocating most of its block grant money towards programs that aim to boost energy efficiency and conservation efforts. Shambarger hopes that if the erection of wind turbines on the lakefront is approved that the project will "show the city's commitment to renewable power."

City officials are considering two different types of turbines for the project. One turbine would be 115 feet tall while the other would be 156 feet tall.

No final decision has been made yet to go through with the project. On Thursday the city will be holding a meeting to offer residents a chance to express their opinions on the project. "We really want to get public input," said Shambarger.

The cost of the project is still unknown and would depend on the types of turbines that would be selected. The larger of the turbines is estimated to cost around $550,000 but the actual price could be reduced by incentives offered from the Focus on Energy Program and the Milwaukee utility We Energies.

We Energies spokesman, Brian Manthey said, "the utility provides incentives of $10,000 to $100,000 for renewable energy projects installed by nonprofit organizations and governments. Funding is awarded after Focus on Energy agrees to provide an incentive for the project."

If interested in attending the informational meeting regarding the turbines it will be held Thursday, January 13th, at 6 p.m. at the South Shore Park Pavilion in Bay View.

Rice Management Inc. Builds Wind Turbine

Officials for Rice Management Inc. knew they wanted to build a wind turbine after purchasing the Maple Lane Health Care Center from Shawano County.

“Rice Management really looks to the future,” said Colinda Clark, administrator of what is now the Maple Lane Health and Rehabilitation Center. “When Rice Management purchased the building that is one of the things they were looking at.”

On Wednesday a 100-foot wind turbine was erected in front of the building with great enthusiasm. “The turbine will help us reduce energy costs so we can do more improvements for the building and do more things for the residents here,” said Clark.

Clark has never seen a wind turbine up close but stated that while in Iowa over the holidays she noticed how well the state and businesses in the state have used wind power as a form of renewable energy. “I’m very excited to know that we are enhancing the life of the earth by installing a turbine,” said Clark.

The turbine at the Maple Lane Health and Rehabilitation Center has blades that are 32 feet in diameter and will produce a maximum 20 kilowatts or 20,000 watts of power when the wind is blowing hard enough.

“The 20 kilowatts is enough energy to power three to five smaller homes,” states Jeff Ehlers, president of Renewergy Inc. located in Oshkosh.

New Rule Could Make It Easier to Build Wind Projects in Wisconsin

On January 1st, a wind siting rule took effect which could open the door to wind farms in southwest Wisconsin.

The rule provides a path for obtaining a permit to build a wind farm, as long as the project developers abide by the guidelines established by the state Public Service Commission (PSC). If a township wishes to regulate a wind energy power system its ordinances can not be more restrictive that the PSC's rules.

In short the PSC's rules trump any local ordinances.

The new rule could help the development of the proposed White Oak wind project in southwest Wisconsin. The White Oak wind project includes parts of Smelser, Hazel Green and Paris townships and has been on hold for more than two years.

Tom Green, senior manager of project development for Wind Capital Group the company pursuing the project believes that the passage of the PSC's rule will help to make the development of wind facilities in state easier.

"The new law will allow communities to plan and give wind developers the freedom to create wind farm strategies," said Ron Brisbois, Grant County Economic Development Director. "That's what everybody was waiting on," said Brisbois while talking about the White Oak project.

Joe Alt of Cuba City and a participant in the White Oak project stated, "it's important to discus the new rule. It's definitely going to help get a wind farm going."

However there are opponents to the White Oak project, in 2009 the Smelser Township supervisors enacted a moratorium on wind farms. Foes of the project said that siting has and always will be the main concern of numerous Smelser Township residents.

"We're just sitting neutral right now," said Smelser Supervisor, Arnie Rawson who voted for the moratorium and did not see the new wind-siting rules as of Monday. "We are very open-minded on it, but we have to be careful to weigh both sides."

Smelser Township Chairman, Gabe Loeffelholz states that there are still residents out there that are in favor of the moratorium. " I don't know what lies ahead," said Loeffelholz, "but whether it's ethanol, solar power, or wind turbines as an alternative energy source, I say go for it."

"Going for it," is exactly what former Gov. Jim Doyle and state lawmakers did previously. In October of 2009, Doyle signed a bill that called for state regulators to come up with statewide rules for wind farms that specified the conditions a local government could impose on the installation or use of a wind-energy system.

At the beginning of this month the commission adjusted the requirements on two issues of critical importance: setback distances between and compensation to neighboring residents.

Initially, the rule did not specify a definite setback distance between turbines and residences next to the host property. Now municipalities cannot establish a setback distance on non-participating residences that is less than 1,250 feet.

The new rule allows for the owner of non-participating residents within a half-mile of wind turbine to receive monetary compensation from the wind system owner said Alt. "It's fair to everybody."

President Signs 2010 Tax Bill into Law: Renewable and Other Energy Provisions Extended

President Obama recently signed into law H.R. 4853 which extends the “Bush” ear tax cuts for all taxpayers at every income level for the next two years. Many energy provisions were also included in the bill. One of the timeliest provisions is the extension of the law passed in the American Recovery and Reinvestment Act of 2009 enacting Section 1603 Grants.

Section 1603 Grant in Lieu of Investment Tax Credit:
The existing law, under ARRA Section 1603, allows a taxpayer to elect to have certain property which is part of a qualified renewable electricity production facility qualify for a cash grant in lieu of the investment tax credit. In most cases the grant amount is 30 percent of the basis of the qualified property. The previous law required eligible property to be placed in service in calendar years 2009 or 2010, or at a minimum to have begun substantial construction or have met a 5% safe harbor test during that period.

The new law extends the Treasury Secretary's authority to provide grants in lieu of credits for one year (through 2011). The new law provides that eligible property must be placed in service in calendar years 2009, 2010, or 2011, or for property placed in service later, its construction must begin during that period. The extension provided by the new legislation does not extend the deadline to have the qualified projects completed, which relates to the expiration of the underlying tax credits for these types of properties. The qualified projects must still be completed prior to 2013 (in the case of wind facility property), 2014 (in the case of other renewable power facility property eligible for credit under Section 45), or 2017 (in the case of any specified energy property described in Section 48). The grant application due date has also been pushed back a year. Applications must now be filed before October 1, 2012.

The Section 1603 Grant in lieu of credit program has been popular among those who are not able to benefit from a tax credit, and has served to provide a much-needed source of funding during the financial system's challenges over the past two years. The extension is a welcome development for investors and developers of renewable energy projects.
Other alternative energy points of interest pertaining to the passage of the 2010 Tax Bill include:

-100% Bonus Depreciation: 100% bonus depreciation applies to new assets acquired and placed in service starting September 9, 2010 through December 31, 2011. The 50% depreciation structure will again apply for 2012. These accelerated depreciation provisions can enhance the tax benefits when investing in renewable energy projects.

-NOT INCLUDED - Advanced Energy Manufacturing Tax Credit (48C): The first $2.3 billion of credits were designed to jump-start domestic manufacturing of renewable energy components. Unfortunately, even with allocation support from President Obama, the new tax law did not extend this program.

For more information on the Section 1603 Grant or other alternative energy provisions please contact a member of the Baker Tilly Renewable Energy and fellow WI Wind Works Alliance Member:
Rich Frohmader: 608 240 2340
richard.frohmader@bakertilly.com

Sam Blahnik: 608 240 2464
sam.blahnik@bakertilly.com

Visit: www.bakertilly.com/Renewable-Energy