WORLD WIND ENERGY NET

The benefi ts from such an expansion include not only lower costs but more electricity to  ower our homes and offi ces, new high-tech jobs, cleaner air, additional income to farms and rural communities — all from a vast, inexhaustible, domestic source: the winds fl owing over our continent.

States Move to Develop More Clean Energy

One of the strongest drivers of new wind installations is state policy, and in particular the renewables portfolio standard (RPS), which requires that a minimum amount of electricity be
supplied from renewable sources. As of January 2005, 18 states had some form of renewable power requirement, including Arizona, California, Connecticut, Iowa, Maine, Massachusetts, Minnesota, Nevada, New Jersey, Texas, and Wisconsin. Joining these in 2004 were New Mexico, Maryland, Hawaii, Rhode Island, New York, Colorado, and Pennsylvania, as well as he
District of Columbia. In early 2005,Illinois Governor Rod Blagojevich called for an RPS ensuring that 8% of the state’s power comes from clean, renewable energy by 2012. Some of these laws are more effectively designed and implemented than others, but all recognize the public benefi t of having a diverse resource mix drawing from domestic, inexhaustible renewable
resources.
States are also taking other actions to spur renewable energy development as a way to ensure cleaner air and slow emissions of carbon dioxide, the leading gas associated with global warming.  Connecticut’s state government, for example, is planning to purchase 20% of its electricity from renewable sources by 2010 and all of its electricity from renewables by 2050.

More Wind, More Jobs

Boosting U.S. wind energy installations to approximately eight times today’s levels would bring $50 billion in new investment and could create 150,000 manufacturing jobs nationwide,
with most being added in the 20 states that have lost the most jobs over the past three years, according to a study by the Renewable Energy Policy Project (REPP).
Some 90 companies in 25 states currently manufacture wind turbine components. Over 6,000 companies in all 50 states have the technical potential to enter the wind turbine market, according to the study. Additional job creation would also flow into non-manufacturing sectors
such as construction, transportation, marketing, fi nancial, and other services.

ROLLING BACK CONSTRAINTS TO GROWTH:Bringing Wind Energy to Market

The U.S. Department of Energy estimates that approximately 600 gigawatts (GW) of wind energy, enough to easily provide 20% of U.S. power supply, are cost-effective at the wind
plant “busbar” (that is, the point at which the wind farm connects to utility transmission lines) when natural gas prices exceed $4 per thousand cubic feet (mcf). Most experts see gas
prices staying above that level in the foreseeable future. Why then isn’t even more wind energy rushing to market today?
In addition to the uncertainty about the availability of the federal production tax credit, a  discriminatory transmission system limits wind energy’s growth. The nation’s power markets are governed by a patchwork of rules and conditions for access to, and use of, the ransmission network. Some charge heavy, unfair penalties against new market entrants or technologies with different operating characteristics. The result: artifi cially high costs and ineffi cient markets. Under the Western Area Power Administration’s old-style rules, for example, the cost for wind to use the network is about 2 cents per kilowatt-hour, a huge obstacle. In California, where the California Independent System Operator (Cal-ISO) has replaced ineffi cient, discriminatory penalties with a innovative requirement that wind
generators provide forecasts for their power deliveries, the costs are 10 times lower.
The Federal Energy Regulatory Commission (FERC), which oversees wholesale electric power markets in the U.S., is  promoting reforms to ensure fair access for all technologies so that customers can reap the benefi ts of competition. Where such reforms are in place, they are already helping remove barriers to market entry for wind. The agency is also standardizing
utility system interconnection agreements and procedures for the entire electric industry, including wind  energy. AWEA supports the proposed standards and procedures for wind
with a detailed Guide on Wind Energy for the wind energy industry and for transmission owners/operators and utilities. Wind turbines meeting the new standards can ride through system faults, contribute reactive power and active voltage control, and communicate with grid operators—and thereby make the electricity transmission system more reliable.
Strategic upgrades to existing lines and investment in new transmission lines are also needed to tap the country’s vast wind energy potential. Lines that have long been
bottlenecks are now being upgraded in Minnesota and California, and such successful precedents may spur similar action in other areas where they are needed. However, the nation has yet to see the development of a national energy policy that includes, as a

strategic goal, transmitting large amounts of wind energy from the windy heartland to fast-growing demand centers. Such a strategy would reduce dependency on natural gas imports and diversify the nation’s energy portfolio with a safe, clean, abundant, domestic resource.

Utility Interest in Wind Rises

The escalating and volatile price of natural gas — a fuel that now accounts for some 20% of U.S. electricity generation — has put a damper on the rate of investment in natural gas
power plants. Building new coal plants that meet modern pollution abatement standards is expensive and comes with the risk of new or tightening regulations to curb emissions of carbon dioxide, the leading gas associated with global warming, and of mercury and other pollutants. Utilities seeking to manage such costs and risks are fi nding that wind energy is an attractive option for new generation.
Wind energy provides stable, affordable insurance against the risk of increases in the price of natural gas and other fuels over time. Wind energy development can also cut consumers’
bills by lowering demand for natural gas — particularly during winter peak demand — and by extending  its supply.
The 2,500 megawatts of wind scheduled to be built in 2005 will generate new, clean, predictably-priced energy for a growing number of utilities and customers across the nation
— from the West Coast where Puget Sound Energy, for example, is adding close to 400 MW of wind to its portfolio, to Texas where CPS Energy, the municipal utility of San Antonio, will
purchase energy from the new 100- MW Cottonwood Creek Wind Farm near Sweetwater, Tex. under a 20-year  contract, and to the East where in upstate New York the fi rst 198 MW of the Maple Ridge wind energy project are expected to start up by the end of the year.
New studies fi nd that utilities can signifi cantly expand wind power in their portfolios without major adjustments in the planning, operations, or reliability of their systems — a concern
sometimes expressed by utilities. The expansion can in some cases increase operational reliability, as the two studies referenced below demonstrate. Xcel Energy, a large energy company serving Western and Midwestern states, is expecting to supply electricity from 1,500 MW of wind power within its northern operation area by 2010, in compliance with Minnesota state laws. A report released by the Minnesota Department of Commerce found that the cost of integrating those 1,500 MW of wind would be less than one-half cent per kilowatt-hour, and could be further reduced with improved scheduling, forecasting, and markets. The study also concluded the 1,500 MW of wind generation contributes the equivalent of 400 MW of conventional generation (27% of the wind power nameplate capacity) in terms of system
reliability. Although some wind opponents have claimed that each MW of wind added to the system requires a MW of new fossil backup, the Minnesota study revealed that 1,500 MW
of new wind would only require 7.8MW of new backup power. The entire study is available at http://www.commerce.state.mn.us .

“Wind energy is a cost-competitive resource that helps diversify our power-supply portfolio
and reduce the risk to our customers from a volatile short-term energy market.” Stephen P. Reynolds, President and CEO,Puget Sound Energy.

The New York Independent System Operator (NYISO) and New York State Energy Research and Development Authority (NYSERDA) have released a  eport concluding that a 10% penetration level of wind can be accommodated by existing processes and resources in the state’s bulk power system. Ten percent, measured as nameplate wind capacity  divided by system peak load, would equate to about 3,300 MW of installed wind power capacity.
These studies confi rm what has long been the experience in Europe, where Denmark and certain regions  of Germany and Spain generate 20% or more of their electricity from wind
without costly adjustments or detriment to the reliability of their systems.

ROLLING BACK CONSTRAINTS TO GROWTH:Industry Calls for Long-term Incentive

The wind energy industry is calling on Congress to extend the federal production tax credit (PTC) this year as soon as possible and for a minimum of fi ve years, so that businesses can plan for growth, put more people to work, and deliver more clean, safe power to the American economy.
Record-breaking installations are planned or under construction across the country following renewal of the credit in October  2004. However, the short duration of the extension — only
until December 31, 2005 — did not give manufacturers suffi cient lead time to provide enough turbines, and will spell another boom-and bust cycle for the industry, unless Congress moves
quickly this year to extend the valuable incentive.
Enacted in 1992, the PTC currently provides a 1.9 cent per kilowatt-hour credit for electricity produced commercially from a wind energy facility during the fi rst 10 years of its operation.
The incentive was expanded in 2004 to include other sources such as solar, geothermal, small irrigation hydroelectric power, open-loop biomass, refi ned coal, agricultural livestock waste, municipal solid waste, and landfi ll gas. In order to qualify, a wind farm must be
completed and start generating power while the credit is in place.