Wind Energy Report Card
We have several farm clients in Washington and Oregon that either are getting royalty checks from wind turbines or will be getting these checks in the near future. In many cases, the income from wind turbines is substantially higher than the income from traditional farming.
In many cases, one turbine can generate in excess of $5,000 or royalty income per year and many are higher than this number.
The American Wind Energy Association recently gave their report card on how the industry is meeting its goal of providing 20% of the USA’s electricity by 2030. Their overall grade was a B. The major report card subjects were:
Technology – Grade A-
Turbine productivity has increased substantially over the last several years. There are many towers now that are over 320 tall with the rotor diameters in excess of 300 feet. These sizes allow the turbines to use the wind better and some of them are producing 3 mega-watts.
Manufacturing – Grade B+
Over 55 new facilities have either come online, were announced or expanded in 2008. The domestic manufacturing content is approaching 50%, however, with out help from the government on regulations, etc., it may be difficult to exceed this number over the next few years.
Transmission & Integration – Grade C-
This is the biggest bottleneck for reaching the 2030 goal. It is far easier to produce the power than to get it to the people and industries that can use. Until this is fixed, there is no way the 2030 goal can be met.
Siting – Grade B
This area continues to improve with education of the public. However, there is no national process for siting and almost all of the siting process is on the local and regional level. This may be a good thing, however, to meet the 2030 goal, this may need to be streamlined.
Some fun wind farm facts:
Texas is the number one state with current power capacity of 7,907 MW (mega-watts). Number 2 is Iowa, with California, Minnesota, and Washington rounding out the top 5.
During 2008, the wind industry installed 8,500 MW of capacity bringing the total to 25,300 MW.
The top five potential wind states of North Dakota, Texas, Kansas, South Dakota and Montana could produce enough electricity to provide all of the electricity that the US is currently producing.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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