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Oregon’s Wind Advantage

Oregon’s Wind Advantage. Why Oregon Makes Sense for Wind Manufacturers Tim McCabe, Director Business Oregon (Oregon Business Development Department). Oregon Is Committed to Renewable Energy. Oregon greenhouse gas reduction targets in law: 10% below 1990 levels by 2020

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Oregon’s Wind Advantage

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  1. Oregon’s Wind Advantage Why Oregon Makes Sense for Wind Manufacturers Tim McCabe, Director Business Oregon (Oregon Business Development Department)

  2. Oregon Is Committed to Renewable Energy • Oregon greenhouse gas reduction targets in law: • 10% below 1990 levels by 2020 • 75% below 1990 levels by 2050 • 2020 target is double new federal goal • Oregon promotes wind and other renewable energy through state incentives: • residential and business tax credits • low interest loans • utility public purpose charge

  3. Oregon Regulatory Policies Encourage Renewable Use Simpler siting review for renewable energy Renewable Portfolio Standard (RPS) • Utilities must provide 25% of electricity from renewable energy by 2025 • virtually all Oregon’s electric load growth must be from renewable energy Power Plant Emission Standard • No new coal plants unless they meet CO2 emissions of natural gas plants, i.e. virtually precludes any new coal plants in Oregon

  4. Wind Energy in Oregon • Nearly 2,000 MW operating • 2,000 MW more being built • 2,100 MW more under review • Energy = 6 fossil fuel plants • Oregon #4 State in US in wind operating plants • Oregon is North American Headquarters of Vestas and Iberdrola

  5. Economic Benefits - Wind Energy Projects • Over 1,600 jobs in construction and operation • 1,000 jobs at Vestas and Iberdrola US headquarters alone • $76 million for farmland leased • $142 million local taxes & fees • #1 green jobs per capita in US

  6. Why Oregon Makes Sense for Wind Manufacturers • Renewable energy incentives • Low business costs • Competitive industrial power rates, low business taxes, tax abatement and incentives • Highly skilled workforce • Access to market for windfarms • Oregon is #4 State in windfarm capacity in US and borders California #3 and Washington #5 • Convenient gateway to Pacific Rim and Europe

  7. Manufacturing Incentives for Wind & Other Renewable Energy • Business Energy Tax Credit (BETC) • 50% tax credit on first $40 million investment. • Convertible to cash at variable rate yields (current @35%) • Multiple credits possible over time • Biennium cap of $200 million of credits • Subject to application & approval • Subject to negotiated performance contract

  8. Manufacturing Incentives continued: • Small Scale Energy Loan Program (SELP) • Loans backed by state tax-exempt general obligation bonds; adequate security required • Interest rate based on bond issue rate, typically 6-7% • Loan terms are flexible, from 5 to 20 years, loan size as large as $20 million • Loans for energy efficiency, renewable energy production, and renewable energy manufacturing • Can include most capital costs e.g. design, engineering land, building and equipment costs. • Fess and interest pay program costs • Can be used with state BETC and federal incentives

  9. Low Costs of Manufacturing Wind in Oregon • Low State and Local Taxes • Low Power Costs • Low Worker Compensation Rates • Low Cost of Land & Buildings • Low Total Operating Costs • Near Other Large Wind Markets: California(#3), Washington (#5)

  10. Oregon Has Low State and Local Business Taxes • Oregon has the lowest effective tax rate in the U.S. (Ernst & Young COST Study, 2010) • Local property taxes, 1–2% of assessed value, rising not more than 3% per year • Inventories and vehicles excluded • Programs to exempt new plant & equipment • No sales tax, no VAT, no inventory tax, stamp tax or transfer tax • Affordable, stable power

  11. Oregon Business ClimateLowest Total Effective Business Tax Rate in the U.S.Oregon is tied for The Lowest in the U.S. at 3.5%

  12. Enterprise Zone (E-Zone)Property tax abatement program • New, qualified plant & equipment 100% exempt from taxation • Three years automatic with hiring requirements and potential urban zone additional conditions • Extra one or two years (years 4 & 5) based on written agreement with local zone sponsor • Future use for subsequent phases or projects • Exemption periods apply to each year’s newly operational property over 3 years per authorization • Future authorizations with 10% employment increases

  13. Low Electrical Power Cost • Average industrial rates are about half that of California’s (U.S. Department of Energy, 2010)

  14. Skilled, Ready Workforce • Established windfarm workforce • Over ten years experience in construction, operation and maintenance of windfarms • Wind-specific programs at community colleges, university system and union training centers • Oregon's attraction and retention of 18-34 year olds is 39% above U.S. average

  15. Oregon Population:3.7 million - 78% in Cities • Top 5 state for attracting young educated workers • Growing population

  16. Access to Market • Access to Key Markets • Easy distribution to Oregon, California, and Washington, three of the top five wind markets in the US, as well as the Pacific Rim • Full intermodal access • Portland International Airport voted best airport for business travel 4 of last 5 years. (Conde Nast, 2006-2008, 2010)

  17. Advanced Inter-Modal Connectivity Port of Portland, Oregon

  18. Port of PortlandWest Coast Flight Hub • About 13 million passengers per year • 200,000 tons of air cargo per year • 20 carriers • 14 passenger carriers • 6 all-cargo carriers • About 216 passenger flights daily • Nonstop flights to Asia, Europe & Canada • Tokyo, Amsterdam, • Calgary, Toronto, Vancouver • General aviation airports in Hillsboro, Troutdale and Salem, Oregon

  19. Delta Non-Stop Service:Tokyo-Portland-Amsterdam

  20. For more information on whyOregon makes sense for wind manufacturers Mr. Tim McCabe, Director 1-503-986-0110 Tim.mccabe@biz.state.or.us Mr. Mike Grainey Renewable Energy Advisor 1-503-986-0071 michael.w.grainey@state.or.us or Mr. Bruce Laird Clean Technology Recruitment Officer 1-541-944-2920 bruce.a.laird@state.or.us www.Oregon4biz.com

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