Recipients seek renewed grants for renewable energy projects

BOISE – The wind always seems to blow on the Snake River plain, keeping this high-desert landscape of sage, potatoes and sugar beet plants forever in motion.

Still, General Electric Co. executives said the consistent gusts weren’t enough for them to take a majority stake in Idaho’s largest wind farm, a 122-turbine, $500 million complex due to produce enough electricity for some 43,000 homes.

That took cash – specifically, the promise of more than $100 million in grants from a U.S. Department of Treasury program that’s pumped $5.1 billion into the nation’s renewable energy projects in the last 18 months. It’s helped kick-start wind farms in California’s mountains, geothermal stations that tap boiling water beneath Nevada’s desert, even solar equipment at a Wisconsin cranberry marsh.

Part of the 2009 federal stimulus, it came as financing evaporated after the 2008 global financial crisis.

Grant recipients say risk-leery bankers have grown more willing to give them money, knowing that renewable developers will quickly get 30 percent of eligible capital costs back, to reduce their debts.

But the grant program expires this year, so energy developers and lawmakers are pushing Congress to extend it until 2012, though they fear election-year politics and possible cost concerns will be a roadblock.

Failure won’t kill renewable energy development, but advocates say wind, geothermal and solar power projects would likely slow.

“Industry is already challenged with difficulties in getting power contracts at a price that makes sense,” said Alex Urquhart, president and chief executive officer of GE Energy Financial Services, before touring his new Idaho project. “If you take away the grant, you further dampen the market, you add cost to projects that may already be challenged.”

For years, the U.S. government steered cash to renewable energy development by offering tax credits.

But when financial markets collapsed in 2008, banks and other investors no longer had an appetite for those, leading Congress and President Barack Obama to approve the cash grants with the American Recovery and Reinvestment Act of 2009.

In April, the Lawrence Berkeley National Laboratory in California said wind projects that may have been enabled by the stimulus grants created 51,600 construction jobs and 3,860 permanent jobs. Nearly two-thirds of wind projects and all geothermal plants built in 2009 took the grants.

GE’s project in Idaho expects to create 175 construction jobs and 25 permanent jobs.

With the grants expiring this year, a group of U.S. senators including Maria Cantwell, D-Wash., and George LeMieux, R-Fla., are pushing to extend the program two years. U.S. Rep. Sander Levin, D-Mich., introduced a draft bill in the House Ways and Means Committee with similar provisions.

U.S. Sen. Mike Crapo, R-Idaho, is optimistic an extension could clear the Senate Finance Committee with bipartisan backing – despite deficit concerns.

“The majority of even the conservatives in Congress believe that our energy policy, or lack thereof, is such a serious threat to our economic stability that it justifies congressional support,” Crapo said Friday.

But Karl Gawell, the Geothermal Energy Association’s executive director in Washington, D.C., fears bad blood between parties could color the debate when lawmakers return in mid-September.

“It’s the politics of Washington,” Gawell said. “It doesn’t appear to most people that any significant legislation is going be able to pass, in the Senate, in particular.”