From: Akweli Parker, The Philadelphia Inquirer
Published October 15, 2004 12:00 AM

Pennsylvania Scores Wind-Power Coup

Oct. 15—Pennsylvania messed with Texas, and won.


Specifically, Kathleen A. McGinty, secretary of environmental protection, engineered an economic coup, winning a Spanish company's agreement last month to set up a wind turbine blade factory in the state and its U.S. headquarters in Philadelphia.


Gamesa Corp. Tecnologica S.A.'s move could bring 1,000 jobs and an initial $25 million in investment to the state. Texas had been a leading contender.


Though wind-generating capacity is only about 6,000 megawatts in the United States, less than 1 percent of the nation's electricity generation, wind power's attraction is growing as governments look to increase their use of clean alternative energy sources.


Pennsylvania generates 129 megawatts of electricity through wind, and is looking to do more.


"There is an environment in Pennsylvania that is incredibly supportive," Gabriel Alonso, executive director of Gamesa Energy USA, Gamesa Corp.'s U.S. operating unit, said yesterday. He cited the enthusiasm not only of government, but also of business and environmental groups.


He also praised PJM Interconnection L.L.C., the region's grid manager, for its progressive operations.


People in the wind-power business hope that Pennsylvania lawmakers pass a bill next month forcing utilities to produce at least 10 percent of their electricity using renewable sources through the next decade, a move that could attract further investment.


McGinty said yesterday in Center City at the annual renewable-energy awards ceremony of the environmental group PennFuture that the state had achieved its goal of meeting 10 percent of its electricity needs through renewable sources.


Seventeen states, including New Jersey and New York, have such a "renewable portfolio standard" to shoulder some of the burden of plants run on fossil fuels. And a standard is a compelling advertisement for states trying to attract renewable-energy companies.


But the Gamesa deal almost did not happen.


As McGinty described it last week, Texas' already substantial investment in wind development and its large Latino population had it "very far down the road" to striking a deal.


McGinty, who had met with Gamesa executives in a prior job with Natsource L.L.C., a financial-services firm specializing in clean-energy investments, got Pennsylvania an audience with Gamesa.


"We were not on the radar screen at all for Gamesa" when she discovered their interest in the United States 10 months ago, McGinty said, putting part of the blame on poor self-promotion.


She and Gov. Rendell pitched a Pennsylvania moving to embrace clean energy — proposing a minimum for utilities' clean-energy production and fostering cooperation among businesses, environmental groups and the state to boost nonpolluting electricity sources.


"The interest in clean advanced energy is not just Katie McGinty's hobby and Ed Rendell's, it is a bipartisan, government and business-shared priority," McGinty said. "Our environmental groups want to partner with industry" rather than harangue it, she said.


Such interest comes not a moment too soon for Pennsylvania, whose manufacturing industry has been hollowed out by a loss of jobs overseas.


"The opportunity is in states that have suffered enormous job losses," said George Sterzinger, executive director of the Renewable Energy Policy Project, a Washington-based think tank partly funded by the federal government.


A recent study by the group determined that a national program to develop the equipment to produce 50,000 megawatts of renewable energy — mostly wind-turbine parts — would create 120,000 jobs, mostly at existing companies, including 7,600 jobs in Pennsylvania, over several years. One megawatt is enough to power about 300 homes.


Renewable energy includes solar power and hydro-electric generation.


But wind's additional contribution could be greatest.


"I firmly believe that 50,000 1/8megawatts3/8 is not the end of the potential for development of renewable energy," Sterzinger said.


PennFuture, a nonprofit economic and environmental policy group, praised McGinty and Rendell in their efforts to snare Gamesa, and in their equating alternative energy with economic growth.


Alternative energy — once seen as the province of eccentrics and dreamers — is emerging as a serious contender to oil, natural gas and coal as the price of those fuels continues to rise.


A perennial knock against wind energy has been its cost — traditionally several cents more per kilowatt-hour than coal or natural gas, even with the support of federal tax credits.


Now, "renewables can compete effectively against natural gas," Sterzinger said, noting that liquefied natural gas for electricity generation has sold recently for 6 cents a kilowatt-hour.


Wind, with the tax break included, costs from 2 to 5 cents per kilowatt-hour, Sterzinger said.


So the race is on to cash in on expanding opportunities, and to develop new technologies, even if the returns seem small now.


"It's competitive between states and even nations where investment for emerging energy technology will locate," said John Hanger, PennFuture's president and chief executive officer.


Incentives such as minimum requirements for renewable energy, Hanger said, will help determine which states win.


© 2004, The Philadelphia Inquirer. Distributed by Knight Ridder/Tribune Business News.


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