Iberdrola's N.C. wind project a no-go
By Charlotte Business Journal
Iberdrola Renewables is putting what would have been North Carolina's first large wind farm on hold after it was unable to secure a power-purchase agreement.
Iberdrola Renewables has decided not to start construction on a proposed $600 million North Carolina wind project this year. The company says it has been unable to negotiate a power-purchase agreement with a regional power company for the electricity the operation would generate.
And without an extension of an expiring federal program that would offer a grant of up to $200 million for the 300-megawatt project, it is unlikely to be built in the near term.
“The federal incentives are a critical piece of the project,” says Iberdrola spokesman Paul Copelman. “I wouldn’t want to say we definitely couldn’t find a way to build it. But if the incentives expire, it's very challenging for the industry.”
Iberdrola, which bases its U.S. operations in Portland, will continue to pursue negotiations for a power-purchase agreement with a utility. But if there are no incentives, the costs of the project — and thus the cost of the power — will go up considerably. Iberdrola could not get a utility to sign a long-term deal to buy power from the project with the pricing advantage that comes with incentive. It is difficult to see why a utility would be more interested in a contract without that price advantage.
This is the second time in recent months that Iberdrola has pulled the plug on a project due to the inability to establish a power-purchase agreement. In October, Iberdrola announced it would stop construction of a biomass plant in Lakeview because it hadn't lined up a utility to purchase power from the plant.
State and local officials in North Carolina had rallied for the project in recent weeks. Last month, Gov. Bev Perdue wrote the chief executives of Duke Energy, Progress Energy and Dominion Resources, asking them to consider partnering with Iberdrola on the wind farm slated for Perquimans and Pasquotank counties.
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