Colorado: Entering the Top Ten
According to the American Wind Energy Association, as of September 2014, Colorado ranked tenth for wind power capacity with 2,332 megawatts (MW) installed. Colorado generated 13.8% of its power from 1,530 wind turbines in 2013. But in 2006, Colorado only had 291 MW of capacity, despite its strong wind resource. Colorado has not only experienced rapid growth in its installed wind capacity, but it’s also become home to several wind turbine component manufacturers, including Vestas. Despite recent layoffs due to Production Tax Credit uncertainty, thousands of people are employed in the wind industry in the state. What happened to boost Colorado’s growth in the wind industry?
On February 23, 2001, the Colorado Public Utilities Commission (PUC) made an historic decision when it ordered Xcel Energy to undertake good faith negotiations for a wind plant as part of the utility’s integrated resource plan. The commission concluded that the wind plant would cost less than new gas-fired generation under reasonable gas cost projections. As a result, a 162-MW wind farm was built in southeast Colorado near Lamar. More wind farms would follow. In November 2004, Colorado voters passed Amendment 37, which created a 10% Renewable Portfolio Standard (RPS) by 2015. In 2007, new legislation doubling the RPS passed with bipartisan support. Governor Bill Ritter signed Colorado House Bill 1001 into law in March 2010, establishing a new Renewable Energy Standard for Colorado. In 2020, the Renewable Energy Standard in Colorado increases to 30%.
In addition, the legislature established a Clean Energy Fund to advance energy efficiency and renewable energy throughout the state. Grants are awarded from the Clean Energy Fund on a competitive basis. All of this legislation resulted in a variety of tax credits, tax incentives, rebates, loans, and grants at the state and local levels for renewable energy projects. Various financial benefits were now available to wind developers and other clean energy companies. Colorado’s “New Energy Economy ” took off, and now 19 wind energy manufacturing facilities are located in Colorado.
Vestas, for example, considered more than 70 communities for its first North American factory but chose Windsor, Colorado, for a blade manufacturing operation for three reasons: 1) the geographical location of Colorado on the continent and its relative closeness to Vestas customers; 2) the close proximity of rail for transportation; and 3) the quality, skilled workforce. In addition, Vestas received an approximately $4 million incentive package from various state and local agencies that included grants, tax rebates, and job-training funds. In addition to the Windsor blade plant, a plant in Brighton assemble nacelles, and another builds blades. A plant in the former steel town of Pueblo builds towers for the turbines. Additional suppliers have announced plans to locate in Colorado. These manufacturing investments (online and announced) total more than $700 million.
Although Colorado has successfully created an attractive business environment for private and public investment and renewable energy companies, the state must address a challenge that is also faced by other states with a great wind resource: how to improve an outdated electrical grid and build the network of transmission lines that will be critical to further large-scale wind development in the state.
