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Wind Plants in West
Have Performed Well During Latest Round In recent days, wind energy has demonstrated its readiness to become a more significant contributor to electricity supply in the western U.S. and to help ease the power shortage problems California is experiencing, according to the American Wind Energy Association (AWEA). AWEA said wind plants in Wyoming and in Southern California have performed well during the most recent supply crisis in the Golden State. New projects will also come online next year in Washington, Oregon and Wyoming as well as California, bringing much-needed additional generating capacity to the region. "Wind energy, especially in combination with natural gas-fired power, can help conserve fuel supplies, reduce price spikes, and diversify the electricity generating mix," said AWEA executive director Randall Swisher. "It's time to start putting the vast wind resources of the West to work." Wind energy offers three major benefits for California's electricity system: 1. Because wind energy's "fuel" is free, its price does not go up or down. Wind energy is impervious to fuel price hikes because its fuel — the wind -- is free. Wind plants generate electricity at a predictably constant price over the life of their wind turbines. The current cost for wind projects with up-to-date technology is 4 to 5 cents per kilowatt-hour (kWh) at good sites like the San Gorgonio pass in southern California, where most of the projects are operating under utility contracts for a period of 20 to 30 years. By comparison, recent hikes in natural gas prices have driven fuel costs alone for older gas-fired power plants past 5 cents per kWh produced, and spot market shortages have led to much higher prices -- $10 per kWh and up. Wind energy helps insulate the power system, and consumers, from inflation and spikes in fuel costs. Greater use of wind for power generation would also help stretch natural gas supplies, making more gas available for heating and easing home heating bills. 2. Adding more wind plants increases overall system reliability. Even though a wind plant's fuel source, the wind, is intermittent, the more wind plants there are, the greater the probability that substantial energy will be generated from wind plants at any given time to meet demand. But perhaps even more important, greater use of wind generation allows aging fossil-fueled plants that are being pushed to their limits to shut down for repairs and avoid running afoul of air pollution limits. Currently there are some 1,600 megawatts (MW) of wind energy generating capacity in California, generating about 1.5 % of the state's electricity, or enough to power all the homes in the city of San Francisco. 3. New, high-tech wind projects can be online by next winter. California has recently approved more than 400 MW of new wind capacity as part of a state program to encourage new renewable energy sources. While that will push the state's total wind capacity to 2,000 MW installed, California will still remain well short of its wind energy potential, conservatively estimated at 5,000 MW. That potential is enough to meet the electricity needs of over 2 million homes, or more than 5 million people. In addition, other Western states have much larger wind resources that could be tapped. New wind plants could be combined with energy efficiency and load management measures to substantially reduce California's shortfall in generating capacity. A typical wind farm generates electricity within six months of ground-breaking for the project. An at least equal amount of new wind capacity will come on line next year in Washington, Oregon, Wyoming and Montana, from projects developed by FPL Energy (including the 300-MW Stateline project in Oregon and Washington) and SeaWest Windpower. Finally, the icing on the cake: Wind energy also helps prevent smog and global warming. California's natural gas-fired power plants emit sizable quantities of nitrogen oxides (NOx), a primary component of smog, which is associated with asthma and other respiratory ailments, and of carbon dioxide (CO2), the most important greenhouse gas associated with global warming. NOx emissions are capped in California, and the state’s power plants are running short of NOx pollution credits. Wind plants generate electricity without any emission of air pollutants or greenhouse gases. "When he was chief of staff to Governor Jerry Brown, Governor Davis played a leading role in developing renewable energy incentives for California. As a result, some 10,000 MW of renewable energy presently help power the state," noted Swisher. "Governor Davis now has a unique opportunity to build on this legacy, and spearhead the effort to make renewable energy a leading source of clean, reliable electricity for Californians." The following is relevant information about wind energy in California, the U.S., and the world. Growth of the Wind Energy Industry - Total worldwide wind capacity today is approximately 15,000 MW, enough to generate about 30 billion kilowatt-hours of electricity each year. This is about the same amount of electricity as 4.5 million average California households (containing 12 million people) use. - Wind energy was the world's fastest-growing energy source during most of the 1990s, expanding at annual rates ranging from 25% to 30%. In 1999, about 4,000 MW of new wind capacity ($4 billion investment) was installed around the world, and 732 MW ($700 million investment), or 18%, of that total was installed in the U.S.
- U.S. wind potential is vast--many times the amount installed. California's potential, for example, is conservatively estimated at 5,000 MW of wind capacity. Other western states have much larger potential--e.g., Wyoming has more than 10 times California's. Market Drivers Behind Wind Energy's Growth (1) Federal government policy: The federal government provides a tax credit of 1.5 cents per kWh (adjusted for inflation) for electricity generated by a wind plant during its first 10 years of operation. This credit is intended to "level the playing field" for wind, which must compete with other energy industries that receive billions of dollars in federal subsidies each year. (2) State government policy: Several states, as part of electric utility restructuring legislation, have enacted policies to encourage clean energy sources like wind. The state of Texas, for example, has passed a law requiring the construction of 2,000 MW of renewable energy generation by the year 2009, of which wind is expected to capture a major share. New wind projects of 160 MW, 208 MW, and 82.5 MW have been announced in Texas within the past few months. (3) Declining costs: The cost of producing electricity from wind energy has declined by more than 80%, from about 38 cents per kilowatt-hour in the early 1980s to a current range of 3 to 6 cents/kWh (levelized over a plant's lifetime). In the not-too-distant future, analysts believe, wind energy costs could fall even lower than most conventional energy sources, reaching a cost of 2.5 cents/kWh. (4) The green power market: As the electricity market becomes more competitive, utilities and other power suppliers are looking for ways to differentiate their products. One of the best ways to do that is to offer "green power"--electricity from clean energy sources like wind--at a premium price. Today, dozens of utilities nationwide are selling wind-generated electricity as part of green power programs, and consumer demand for green power (even though still very small) is beginning to result in the building of new wind power projects, including some in southern California. Clean Energy Policy Options (1) Renewables Portfolio Standard (RPS): The RPS is a "minimum content requirement," which specifies that a certain minimum percentage of electric power must be generated from renewable energy sources (wind, solar, and others). Typically, RPS legislation provides that the minimum percentage increase gradually over time to encourage the sustained, orderly development of the renewable energy industries. Several states, most successfully Texas, have enacted RPS laws, and the concept is also being considered by the U.S. Congress. More information on the RPS is available from http://www.awea.org/policy/index.html#RPS . (2) Production Tax Credit (PTC): The U.S. government currently provides a tax credit of 1.5 cents per kilowatt-hour (adjusted for inflation) for all the electricity generated by a new wind plant during its first 10 years of operation. Under current law, the credit is scheduled to expire at the end of 2001. The American Wind Energy Association (AWEA) is seeking its extension for five years. More information on the PTC is available from http://www.awea.org/policy/index.html#PTC . (3) Net Metering for Small Wind Turbines: Many states have enacted "net metering" laws, under which the electric meter of a small wind turbine owner is allowed to run backward if his wind turbine is producing more electricity than is needed by his household or small business. Net metering is a simple and effective way to encourage homeowners to purchase and install small wind machines. More information is available from http://www.awea.org/policy/index.html#netbill . (4) Disclosure of Energy Sources: AWEA also supports "disclosure" laws, which require sellers of electricity to inform customers of the sources of energy (coal, nuclear, natural gas, etc.) that are used to generate the electricity. Such information is important for consumers to be able to make intelligent choices in a competitive marketplace. Benefits of Wind Energy Development in California - Wind energy provides both environmental and economic benefits. - Windy counties in California profit from wind development through: (1) Tax Payments: Every 100 MW of wind development generates about $1 million in property tax revenue. Development of another 1,000 MW of wind by 2005 in California would mean $10 million annually in tax revenues to rural communities. (2) Jobs: Every 100 MW of wind development creates about 500 job-years of employment. Installation of 1,000 MW in California would result in 5,000 job-years. (3) Payments to landowners: The development of 1,000 MW in California would mean annual payments of approximately $2 million to farm and forest landowners. (4) Stable electricity prices: A recent study (January, 2000) found Iowa's electric utility customers could save over $300 million over a 25-year period if a proposal to meet 10% of the state's electric demand through wind energy is adopted. The savings result because the cost of fossil fuels is expected to rise over time, while wind’s costs decline. Savings in California, where prices have skyrocketed because of supply constraints, should be enormous. (5) Reduced emissions of pollution and greenhouse gases: A single 660-Kw wind turbine will displace emissions of 1,100 tons of carbon dioxide (the leading greenhouse gas), 6 tons of sulfur dioxide (the leading component of acid rain), and 4 tons of nitrogen oxides (the leading component of smog) every year, based on the U.S. average utility fuel mix. 375 acres (more than half a square mile) of forest would be needed to absorb the same amount of CO2. Quotation "California today is reaping the results of two decades of short-term, quick-fix energy policies. Now is the time for the Golden State to take a longer view, and to begin laying the foundations for the long-term energy supply that it needs to continue to be a world-class economy. Pollution-free electricity from the wind can be a major part of meeting California's needs." -- Randall Swisher, AWEA Executive Director.
AWEA, formed in 1974, is the national trade association of the U.S. wind energy |
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©
2000 by the American Wind Energy Association. |
