News from AWEA: President's Energy Plan

["Tom Gray" <tomgray@igc.org>]

American Wind Energy Association
www.awea.org

FOR IMMEDIATE RELEASE:          

May 
17, 
2001

    

        

        

        

Contact: 
Tom Gray (802) 649-2112
Christine Real de Azua  (202) 
383-2508

PRESIDENT'S ENERGY PLAN IS 'USEFUL FIRST STEP,'
WIND ENERGY ASSOCIATION SAYS
Trade Group Supports Wind Portion of Proposal,
Calls for Stronger Measures on Renewable Energy

        

The 
national energy program announced today by President Bush is "a useful first 
step" toward recognizing the value of wind and other renewable energy sources, 
the American Wind Energy Association (AWEA) 
said.

        

AWEA 
said it is pleased that the Administration plan calls for extension of the 
federal wind energy production tax credit (PTC) and for a review of 
previously-proposed cuts in federal renewable energy research and development 
(R&D 
funding).

        

"Extending 
the PTC and revisiting the R&D budget cuts are important and valuable 
actions," commented AWEA Executive Director Randall Swisher, "but there is still 
much to be done if we are to have an energy policy that is truly balanced among 
conventional energy sources, efficiency, and 
renewables."

        

Swisher 
said further action is needed to develop a "serious renewable energy agenda for 
the nation."  For wind, he said, additional necessary measures 
include:

*

       

A 30% 
investment tax credit for small wind systems (below 75 kilowatts in capacity, 
suitable for household or small business 
use).

*

       

A 
directive to the Federal Energy Regulatory Commission (FERC) to take steps to 
integrate intermittent electricity-generating resources like wind into the 
electric utility transmission 
system.

*

       

A 
Renewables Portfolio Standard (RPS), which would require that a certain minimum 
percentage of electricity generated in the U.S.--AWEA has previously endorsed 
10% by the year 2010--be produced by new renewable energy power 
plants.

*

       

A 
requirement that federal government agencies purchase an increasing percentage 
of their energy needs from renewable energy 
suppliers.

*

       

Increased 
R&D funding to continue driving the price of wind-generated electricity 
down.

        

"The 
European Wind Energy Association (EWEA) has recently raised its target for 
installed wind capacity in the European Union for 2010 from 40,000 MW to 60,000 
MW," said Swisher, "because it has become evident that the lower target will be 
surpassed."  Sixty thousand megawatts of wind generating capacity are 
equivalent to 20 to 25 new 1,000-MW nuclear power 
plants.

        

AWEA 
said it projected in 1995 that global installed wind capacity would reach 18,500 
MW (requiring investment of roughly $18 billion) by 2005.  Instead, that 
total will be surpassed before the end of this 
year.

        

In 
the U.S., wind energy's growth is surging, with about 1,500 MW of new capacity 
likely to be installed this year, a 60% increase over the approximately 2,600 
megawatts (MW) that were on line at the end of 2000.  By year's end, U.S. 
wind capacity will be nearly triple what it was at the end of 1997, just four 
years earlier.  Texas alone will account for about a third of the new 
additions and will more than triple its wind energy generating capacity this 
year.

        

"Wind 
plants can be built much more quickly than other power plants, and they are a 
clean, affordable source of electricity," Swisher said.  "U.S.wind energy 
potential is vast--equal to or exceeding the oil reserves of  Saudia 
Arabia.  We need a far more aggressive plan to make use of it."

* * *

The following is relevant background 
information about wind energy in the U.S. and the world.

Growth of the 
Wind Energy Industry

- Total worldwide wind capacity today is 
approximately 17,300 MW, enough to generate about 37 billion kilowatt-hours of 
electricity each year.  This is about the same amount of electricity as 5 
million average California households (containing 12.5 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 35%.  In 
2000, about 3,800 MW of new wind capacity (a $4 billion investment) was 
installed around the world, but only 53 MW of that total, or a little more than 
1%, was installed in the U.S.  However, AWEA expects as much as 1,500 MW of 
new wind capacity to be installed in the U.S. this year.

- Leading states 
in terms of installed wind capacity today are California (1,646 MW), Minnesota 
(272 MW), Iowa (242 MW), and Texas (188 MW).

- U.S. wind potential is 
enormous--many times the amount installed.  California, for example, could 
conservatively install an estimated 5,000 MW of wind capacity.  Other 
western states have much larger potential--e.g., Wyoming has more than 10 times 
California's.  The U.S. is, quite literally, a "Saudi Arabia of wind," with 
vast resources throughout the Plains states.


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.  The wind energy credit will expire at the 
end of this year unless it is extended by Congress.

(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 new 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 including the federal wind energy Production Tax Credit (PTC)). 
However, the cost of electricity from a wind plant varies based on its size and 
the average wind speed.  A large plant (50 MW and up) at an excellent site 
(20 mph average) can deliver power for 3-4 cents/kWh; electricity from a small 
plant (3 MW) at a moderate site (16 mph) may cost up to 8 cents/kWh.  In 
the not-too-distant future, analysts believe, wind energy costs could fall even 
lower.

(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, over 190 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, including 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 at least five years.  More information on the PTC is 
available from http://www.awea.org/policy/index.html#PTC.

(3) 
Incentives for Small Wind Turbines:  Tax incentives or rebates help make 
the purchase of a small wind turbine for household use more attractive to 
potential buyers.  California currently provides a rebate of up to 50% of 
the purchase price of a small turbine, and that has helped to sharply increase 
demand for the units in the state.

(4) Fair Transmission Policy:  
The nation's electricity transmission system operates based on rules that were 
designed to fit the characteristics of fossil fueled power plants.  
Congress should take appropriate steps (including guidance to the Federal Energy 
Regulatory Commission and the emerging Regional Transmission Organizations) to 
ensure that wind energy is not disadvantaged in the market simply because it is 
an intermittent power source.

(5) Research and Development:  The 
U.S. Department of Energys wind energy research and development (R&D) 
program has worked closely with wind energy companies in recent years to improve 
wind technology and pursue innovative approaches to reducing costs.  
Funding for the R&D program should be continued and, if possible, 
expanded.

(6) 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

Wind energy 
provides both environmental and economic benefits.

Windy counties 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 1,500 MW of wind this year will mean $15 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 1,500 MW will result in 7,500 job-years.

(3) Payments to landowners: 
The development of 1,500 MW in the U.S. will mean annual payments of 
approximately $3 million to farm and ranch 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, would 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.

# # #

AWEA, formed in 1974, is the 
national trade association of the U.S. wind energy industry.  The 
associations 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


Christine Real de 
Azua 
Communications Coordinator 
American Wind Energy Association 
122 
C Street NW
Washington D.C. 20001
main (202) 383-2500
direct (202) 
383-2508
fax (202) 383-2505 
email: christine@awea.org
website: www.awea.org

President's Energy Plan - 2001-05.doc