North Carolina could soon join its neighbor Tennessee by placing an 18-month moratorium on wind farm construction. Lawmakers in the Tar Heel State recently passed its moratorium to avoid higher energy costs and interference to military operations.[i] If signed by the governor before the July 30 deadline, the measure would be the longest statewide stoppage on wind energy development in the nation. Tennessee passed its year-long moratorium on new wind turbines in May.
In 2015, the North Carolina legislature began to consider freezing the state’s green energy mandate on the belief that it hurts job growth and causes energy prices to spike. The moratorium will keep the state’s green energy goal at 6 percent of electricity sales—less than half the original goal of 12.5 percent by 2021.
When North Carolina passed its renewable mandate in 2008, 28 other states had similar policies forcing more renewable energy onto the grid. But now renewable energy mandates are being scaled back. Some states—including Kansas, Ohio, West Virginia, Texas, Michigan, New Mexico and Colorado—have repealed their renewable energy mandates entirely.
According to the John Locke Foundation, since 2008 electricity rates in North Carolina increased 2.5 times faster than the national average because of its renewable energy mandate.[ii] By 2014, the cost to ratepayers due to the state’s renewable mandate totaled $276 million.[iii] A 2009 study predicted that in 2021 the mandate would cost the state:[iv]
▪ Loss of 3,592 jobs
▪ Loss of $56.8 million in real disposable income
▪ Loss of $43.2 million in investment
▪ Loss of $140.4 million in real state gross domestic product
▪ Loss of $43.5 million in state and local government revenues
(Figures are in 2009 dollars.)
If the moratorium is signed by the governor, two wind farms may be in jeopardy. One of the wind farms, the Timbermill Wind project, would erect 48 wind turbines rising up to 599 feet on private land. The other project, the Little Alligator wind farm, would erect 29 wind turbines on land owned by timber producer Weyerhaeuser. Little Alligator’s blade tips would reach as high as 660 feet. The developer, British energy firm Renewable Energy Systems, is reconsidering its commitment to the $200 million project.[v]
The turbines used in the Timbermill and Little Alligator projects would be among the tallest in the United States. By comparison, the Amazon Wind Farm, which reaches a height of 492 feet, underwent a military review and was scaled back from 150 turbines to 104 turbines after the Department of Defense expressed concerns.
Tennessee’s legislation prohibits the construction of any wind farm until July 1, 2018, in counties that do not have regulations related to wind farms in place by July 1, 2017. The law also creates a special joint legislative study committee to evaluate and make recommendations on the siting of future wind farms based on how the industry is regulated in other states.[vi] The moratorium does not prohibit wind farm developers from doing preliminary work on projects.
The legislation, however, resulted in the suspension of a 23-turbine wind farm that would have cost over $100 million. The wind farm was to have been built on 2.8 square miles of the Cumberland Plateau behind a limestone quarry, but its turbines would have been visible from Interstate 40. Some area residents strongly opposed the wind farm due to aesthetic concerns and environmental impacts associated with the construction and operation of the turbines near local farm fields.[vii]
New wind farms do cost more than existing technologies[viii] and customers in certain states are finding that out when their electricity rates increase. The cost of renewable energy and issues with aesthetics are causing state legislators to question whether their renewable energy mandates should continue and/or if a moratorium should be used to study the issues.
[i] Daily Caller, North Carolina Lawmakers Pass Two Year Ban On Wind Turbines, June 30, 2017, http://dailycaller.com/2017/06/30/north-carolina-lawmakers-pass-two-year-ban-on-wind-turbines/
[ii] The News&Observer, Counting the costs of North Carolina’s renewable energy mandate, June 16, 2015, http://www.newsobserver.com/opinion/op-ed/article24658246.html
[iii] Strata, Renewable Portfolio Standards: North Carolina, February 2015, http://www.strata.org/wp-content/uploads/2015/03/FINAL-RPS-North-Carolina.pdf
[iv] Beacon Hill Institute, The Economic Impact of North Carolina’s Renewable Energy and Energy Efficiency Portfolio Standard, August 2009, https://www.scribd.com/document/23880187/The-Economic-Impact-of-North-Carolina-s-Renewable-Energy-and-Energy-Efficiency-Portfolio-Standard
[v] News&Observer, Two proposed wind farms threatening to pull out of NC if moratorium becomes law, July 5, 2017, http://www.newsobserver.com/news/business/article159811154.html
[vi] The Chattanoogan, Alexander Says Tennessee Has Opportunity To Decide Whether Wind Turbines Are Acceptable, May 12, 2017, http://www.chattanoogan.com/2017/5/12/347943/Alexander-Says-Tennessee-Has.aspx
[vii] Climate Wire, Wind farm suspended after Tenn. passes moratorium, June 15, 2017, https://www.eenews.net/climatewire/2017/06/15/stories/1060056079
[viii] Institute for Energy Research, The Levelized Cost of Electricity from Existing Generation Resources, July 2016, http://instituteforenergyresearch.org/wp-content/uploads/2016/07/IER_LCOE_2016-2.pdf