Transporting wind turbines requires considerable planning and expense due to size and weight of components. Each blade can weigh approximately 77 tons per transportation unit and towers can be up to 410 feet tall. Transportation and logistics efforts can account for as much as $150,000 per turbine, or about 20 percent of total installed cost. As a result of this high cost burden, wind turbine manufacturers must give serious consideration to transportation and logistics issues as facility locations are chosen.
In order to attract turbine manufacturers, capitalize on the wind components export market, and help meet demand in neighboring states, states should consider various ways to improve ground and inland water transportation pathways.
In some instances, the current condition of state roads is not sufficient to accommodate cost-effective and continued movement of heavy components like wind turbine towers or blades. In order to prepare state highways and rural roads for wind turbine transportation, policymakers could allocate state Department of Transportation (DOT) funds for road upgrades. Many state DOTs must outline proposed infrastructure investments every few years, and could include a cost benefit analysis of the return on investment of road upgrades that would facilitate movement of large goods, such as wind turbine components. If the state DOT determines that these investments provide sufficient returns to the state, a portion of DOT funds could be allocated to road upgrade projects.
Additionally, the state could consider adopting Florida’s model of transportation development, which encourages new private-sector development through locally managed transportation improvements. Florida’s Economic Development Transportation Fund, also known as the “Road Fund,” provides funds to help solve transportation problems that hinder economic development. Grant funds are awarded to a local government on behalf of specific businesses that want to establish or expand a facility, but cannot locate due to inadequate local infrastructure. Infrastructure upgrades that qualify include construction of access roads, installing signals, and widening roads.
Lastly, state leaders could encourage private road development by extending existing sales and use tax exemptions, such as ones for renewable energy, to include materials used directly for the road upgrades necessary for wind energy production and transportation. A dual public and private sector approach to modernizing state roads will bolster the local wind power sector by mitigating transportation challenges associated with exporting blades and towers to other states.
Encourage River Transport of Heavy Goods
Currently, only 40 percent of the United States’ inland water system is fully utilized, representing an opportunity to improve transportation of large or heavy goods. River shipping is typically less expensive and more efficient per ton-mile. For example, an average fifteen-barge tow can accommodate the equivalent of 216 rail cars. Additionally, barges allow for design and loading flexibility: a single barge can fit up to eighteen wind turbine blades.
Two important shipping pathways connect the Midwest with the gulf states: the Mississippi River and Missouri River. Most of the Mississippi River has terminals that can accommodate transport of wind turbines, while the Missouri River has fewer terminals, such as Big Soo, that are currently able to serve the needs of the wind industry. To fully maximize the potential of freshwater transportation to increase export efficiency, a state could incentivize barge transportation improvements. State policymakers could look to Virginia’s barge and rail tax credit as a model for encouraging alternative transport methods for large, heavy goods.
To decrease movement of goods along highways and incentivize river and railway transport, Virginia offers a barge and rail tax credit. The credit can be claimed against a number of state taxes including individual income tax, corporate income tax, and tax on public service corporations. The tax credit equals $25 per 20-foot equivalent unit of shipping container. This modest incentive encourages the use of alternative transport methods, such as railways and waterways.
In addition to a barge tax credit similar to Virginia’s, state policymakers could encourage the construction of specialty barges that move goods along the navigable rivers. The state could extend existing sales and use tax exemptions, such as ones for “wind energy conversion property,” to include construction of specialty barges that transport wind turbine components along rivers. Incentivizing inland water transportation of wind turbine components would bolster a state’s wind turbine export market and help meet demand in other states. States with robust railway systems could use similar incentives to encourage rail transportation of goods.