Energy and Environmental Policy Renewable Energy : Wind

1. Energy and Environmental PolicyRenewableEnergy: Wind Presented by: Adam Smith Damien Hammond VeeraKondapiJeff Gruppo

2. Key National Policies Needed to Achieve 20% Wind Power by 2030

3. National Renewable Electricity Standard (RES) Description: The renewable electricity standard (RES), also known as a renewable portfolio standard (RPS), uses market mechanisms to ensure that a growing percentage of electricity is produced from renewable sources, like wind power. The RES provides a predictable, competitive market, within which renewable generators compete with each other to lower prices.  RES policies currently exist in 28 U.S. states, but not at the national level. Current Status:  AWEA seeks a strong national RES policy. Ideally, a national RES would call for 25% of the nation’s electricity to come from renewable energy by 2025, with an aggressive near-term target, such as 10% by 2012, as was called for in the Obama-Biden New Energy for America plan, to ensure rapid renewable energy deployment

4. Production Tax Credit (PTC) Description:Under present law, an income tax credit of 2.1 cents/kilowatt-hour is allowed for the production of electricity from utility-scale wind turbines.  This incentive, the renewable energy production tax credit (PTC), was created under the Energy Policy Act of 1992. Current Status:Through the American Recovery and Reinvestment Act (passed in February 2009), Congress acted to provide a three-year extension of the PTC through December 31, 2012.  • Problems with PTC: • It offers little benefit in an adverse financial climate, where demand for tax credit is limited. • The credit has routinely been extended only for one-year or two-year terms, and has been allowed to expire on three separate occasions (1999, 2001, and 2003). This uncertainty has discourage companies from making long-term, sizable investments to the wind power manufacturing and development. • Small wind systems, used to power homes, farms, and small businesses, are ineligible for the PTC and instead rely on a federal investment tax credit.

5. Renewable Energy Transmission Highways Description: The U.S. is home to vast quantities of clean energy resources, but lacks a modern interstate transmission grid to deliver carbon-free electricity to customers in highly populated areas of the country. This is perhaps the biggest obstacle to the long-term growth of wind power and other renewables. Current Status: AWEA supports federal policies that would bring about the construction of a high-voltage interstate transmission highway system for renewable energy, as envisioned in DOE’s 20% wind report. Our agenda includes federal legislation, regulatory initiatives by the Federal Energy Regulatory Commission and the Department of Energy, and federal financial support. The cost would be an increase in annual transmission investment from approximately $8 billion today to $11 billion, but this investment would quickly be offset by lower electricity costs and reduced fuel costs, and would lead to greater energy independence. 

6. National Climate Change Legislation Description: As the most readily deployable source of carbon-free electricity generation, wind power is uniquely positioned to contribute to the global warming solution, especially in the early years of the climate protection effort, when few other options are available.  Generating 20% of U.S. electricity from wind would be the climate equivalent of removing 140 million vehicles from the roadways.  But the potential will not be realized unless climate legislation provides an economic incentive to switch to clean energy sources. Current Status: AWEA seeks climate legislation that includes an aggressive near-term goal, such as a 15 to 20% carbon dioxide reduction by 2020, in order to promote a near-term shift to renewable energy and get the quick start on greenhouse gas emissions reductions scientists tell us is needed.

7. Federal Agency Support for Siting Wind Power Projects and Transmission Lines Description: Federal agencies have a key part to play in developing our renewable energy potential because of their role in the siting of wind projects and new transmission lines, especially on federal lands. Current Status: In line with the wind industry’s recommendation, Interior Secretary Ken Salazar has issued an executive order to prioritize development of responsibly-sited renewable energy projects on federal lands. Also, the economic stimulus legislation allocated money to the Bureau of Land Management, part of which will be used to set up renewable energy coordination offices, in line with the wind industry’s recommendations.

8. Federal Research & Development and Wind Program Funding Description: Federal funding for wind energy research and development (R&D) and other programs in inadequate, especially when compared with funding levels for other fuels and energy sources. The DOE wind program currently receives about $50 million annually, which is well below its all-time high of $63 million in FY1980.

9. Small Wind Systems Tax Credit Description: Under present law, a federal-level investment tax credit (ITC) is available to help consumers purchase small wind turbines for home, farm, or business use. Owners of small wind systems with 100 kilowatts (kW) of capacity or less can receive a credit for 30% of the total installed cost of the system. Current Status: The ITC, written into law through the Emergency Economic Stabilization Act of 2008, is available for equipment installed from October 3, 2008 through December 31, 2016. The value of the credit is now uncapped, through the American Recovery and Reinvestment Act of 2009.