AWEA Statement for Bonn "Renewables 2004" Conference

he American Wind Energy Association (AWEA) supports the efforts of the International Renewable Energy Conference ("Renewables 2004") to promote renewable energy to help reduce the threat of climate change.

AWEA wishes in particular to draw attention to several characteristics of wind power as it is developing in the U.S., which underscore the potential of this technology to provide a large share of the country's—and the world's—power, while delivering compound environmental and economic benefits. AWEA calls for a number of actions to remove barriers to large-scale development of wind power in the U.S.

Characteristics of wind power as it is developing in the U.S.:

Wind power is no longer "too expensive."

Today's large, high-tech utility-scale wind turbines generate electricity at a cost that can be competitive with other new power plants. Moreover, the cost of power from a wind farm is stable over time and provides valuable insurance against volatility in the cost of natural gas and other fuels used for power generation. A growing number of U.S. projects have been built principally on the basis of their economics, including the 162-megawatt (MW) Colorado Green wind farm in Lamar, Colorado, and two 40-MW projects in the Dakotas, completed in 2003 alone. More are in the pipeline, including wind power bids that won a total of 450 MW out of a 1,000-MW all-source solicitation by one of the nation's large utilities, Xcel Energy. Government incentives are still needed, however, to allow wind to continue to compete with established energy technologies that still receive subsidies in various forms, and to further accelerate investment in wind.

Local economic benefits of wind power revitalize rural communities.

The communities where wind farms are placed welcome the additional income and jobs that come with wind energy development. Increased county revenues can go to schools, hospitals, and other services. Farmers and ranchers can continue to work the land up to the base of the turbines while earning $2,000 to $4,000 per year per turbine installed on their property. Large-scale development of wind power in the U.S. would blow prosperity back to many rural communities in the American heartland.

Sophisticated technology makes wind power reliable and predictable, although it cannot be "dispatched" on demand.

Modern wind turbines are very reliable, and wind farms are available to generate power over 98% of the time, an outstanding performance for any energy technology. And while the wind does not blow on demand, seasonal and daily wind patterns at specific locations can be anticipated over time. Short-term forecasting is also increasingly accurate. In California, for example, wind farm operators participate in a program that provides wind power forecasts to the California Independent System Operator (Cal-ISO), the organization that manages power flows on the state's grid, which then schedules the energy from wind farms into the grid about an hour ahead of time. AWEA is reaching out to utility managers and decision-makers to inform them about the technology's capabilities.

These economic and operational characteristics make it possible to envision a near-term future in which wind plays a substantial role in U.S. power supply, thereby helping curb the nation's emissions of greenhouse gases and air pollutants in an economical and efficient way. However, wind power still faces daunting policy and regulatory barriers. AWEA calls for the following actions to remove these barriers and accelerate the development of wind power in the U.S.:

Actions to remove barriers to large-scale development of wind power in the U.S.:

• Long-term extension of the federal production tax credit (PTC)
  The credit, which is important for the financing of wind farms, expired December 31, 2003, and still has not been extended as of May 2004. The uncertainty about the timing of an extension has brought almost all wind power investments in the U.S. to a halt. This is the third time that the PTC has expired in five years. A long-term extension is urgently needed to put the industry back to work, eliminate the boom-and-bust cycles resulting from successive expirations, and provide the industry with a stable planning horizon.
   

• National renewable energy portfolio standard (RPS)
  The RPS, which requires that a minimum amount of electricity be generated from renewable sources, is a market-friendly tool that has successfully stimulated least-cost renewable energy development in Texas and several other states. A national standard would provide a much-needed long-term market signal and stimulate large-scale deployment of renewable energy at competitive costs over time.
   

• Non-discriminatory interconnection and transmission policies
  Over 200 different "tariffs" throughout the country govern the costs and conditions for access to, and use of, the common electricity grid. Many charge heavy, discriminatory penalties against new technologies like wind. For example, on the Western Area Power Administration (WAPA) system, an area encompassing some of America's windiest lands but which operates under outdated rules, the cost of bringing wind power to market is a prohibitive $20 per megawatt-hour (MWh), ten times more than in California where rules are more fair. Non-discriminatory policies are needed nationwide to remove these costly barriers to wind power development.
   

• Large-scale "wind pipeline" to bring wind power to market
  AWEA proposes a three-phase plan to collect large amounts of wind power from the windy, lightly-populated heartland to deliver it to urban centers:
  Phase 1 -- Transmission reforms to use existing power line capacity more efficiently;
  Phase 2 -- Upgrades and additions to some local transmission lines to remove regional bottlenecks; and
  Phase 3 -- Construction of two major high-voltage lines from the Great Plains to growing demand centers to the East (toward Chicago) and West.
   

• Clean Air credits for wind power and other renewable energy sources
  The Clean Air Act in the U.S. sets caps on emissions of sulfur dioxide and nitrogen oxide, but wind and other renewable energy sources are not compensated for their contribution to reducing emissions of these pollutants. Moreover, the Clean Air Act does not currently set any cap on emissions of carbon dioxide, the leading greenhouse gas. The Clean Air Act should be expanded to cap emissions of carbon dioxide and should allow renewables to participate in credit trading schemes by setting aside specific allowances for these technologies or assigning allowances to all generators, including renewables, on an output basis.

Prompt adoption of these measures as part of a national energy plan to increase the overall reliability of the U.S. power supply while reducing emissions caused by power generation would unleash investments in the U.S. wind energy market, and boost wind's share in U.S. power supply from less than 1% today to 6% — about what hydropower generates today — by 2020. The U.S. can participate in the Bonn conference negotiations in the knowledge that the American wind energy industry is ready and eager to help the country meet ambitious renewable energy targets and join the world's leaders in the field of renewable energy development.

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AWEA, formed in 1974, is the national trade association of the U.S. wind energy industry. The association’s membership includes turbine manufacturers, wind project developers, utilities, academicians, and interested individuals. More information on wind energy is available at the AWEA web site: www.awea.org

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