[ exact phrase in "" ]

[ including uploaded files ]

ISSUES/LOCATIONS

List all documents, ordered…

By Title

By Author

View PDF, DOC, PPT, and XLS files on line
Get weekly updates

WHAT TO DO
when your community is targeted

RSS

RSS feeds and more

Keep Wind Watch online and independent!

Donate via Paypal

Donate via Stripe

RSS

Add NWW documents to your site (click here)

Wind Watch is a registered educational charity, founded in 2005.

Shepherds Flat Loan Guarantee 

Author:  | General

The Shepherds Flat loan guarantee illustrates some of the economic and public policy issues raised by OMB and Treasury. Shepherds Flat is an 845-megawatt wind farm proposed for Oregon. This $1.9 billion project would consist of 338 GE wind turbines manufactured in South Carolina and Florida and, upon completion, it would represent the largest windfarm in the country.

The sponsor’s equity is about 11% of the project costs, and would generate an estimated return on equity of 30%.

Double dipping: The total government subsidies are about $1.2 billion.

Subsidy Type

Approximate
Amount
(millions)

Federal 1603 grant (equal to 30% investment tax credit)

$500

State tax credits

$18

Accelerated depreciation on Federal and State taxes

$200

Value of loan guarantee

$300

Premium paid for power from state renewable electricity standard

$220

Total

$1,238

Skin in the game: The government would provide a significant subsidy (65+%), while the sponsor would provide little skin in the game (equity about 10%).

Non-incremental investment: This project would likely move without the loan guarantee. The economics are favorable for wind investment given tax credits and state renewable energy standards. GE signaled through Hill staff that it considered going to the private market for financing out of frustration with the review process. The return on equity is high (30%) because of tax credits, grants, and selling power at above-market rates, which suggests that the alternative of private financing would not make the project financially non-viable.

Carbon reduction benefits: If this wind power displaced power generated from sources with the average California carbon intensity, it would result in about 18 million fewer tons of CO2 emissions through 2033. Carbon reductions would have to be valued at nearly $130 per ton CO2 for the climate benefits to equal the subsidies (more than 6 times the primary estimate used by the government in evaluating rules).

Appendix to Memorandum for the President: “Renewable Energy Loan Guarantees and Grants”, October 25, 2010

This material is the work of the author(s) indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this material resides with the author(s). As part of its noncommercial educational effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Queries e-mail.

Wind Watch relies entirely
on User Funding
   Donate via Paypal
(via Paypal)
Donate via Stripe
(via Stripe)

Share:

e-mail X FB LI TG TG Share

Get the Facts
CONTACT DONATE PRIVACY ABOUT SEARCH
© National Wind Watch, Inc.
Use of copyrighted material adheres to Fair Use.
"Wind Watch" is a registered trademark.

 Follow:

Wind Watch on X Wind Watch on Facebook

Wind Watch on Linked In Wind Watch on Mastodon