August 17, 2008

Wind Sector Believes 20 Percent Goal “Achievable”

By Blankinship, Steve

The United States wind energy sector continues to believe it is possible to produce 20 percent of the nation's electricity with wind by 2030. But the 20 percent number is not a prediction, guarantee or projection. Instead, according to Randall Swisher, executive director of the American Wind Energy Association (AWEA), the "20 Percent Vision" is "achievable but not inevitable." He made his comments at AWEA's 2008 conference in Houston. Wind presently provides less than 1 percent of the electricity in the United States. Foremost among the obstacles to achieving the "20 Percent Vision," he said, is breaking away from the federal wind energy production tax credit's on-and-ofF nature. The credit offers wind energy producers a two cent production tax credit (PTC) on every kilowatt-hour of power produced. Swisher said broad political support exists for the PTC, but that disagreement remains over how it should be paid and by whom.

Other elements needed to achieve the 20 percent goal are new transmission built to move power from remote wind-rich areas to load centers, more load balancing efforts that allow grids to accept higher wind penetration, more wind turbine manufacturing and a solution to environmental issues such as the effects of wind project development on wildlife.

In order to help address wildlife concerns, Swisher announced establishment of the American Wind Energy Wildlife Institute. He said the initiative would help achieve wind and wildlife goals effectively, quickly and with better results than wind industry members could achieve acting alone.

Regarding transmission issues, one model receiving wide attention is the competitive renewable energy zone (CREZ) concept now being pursued in Texas. Under the CREZ model, a coordinated effort is underway by the state, its primary power grid (ERCOT) and power providers to build $6 billion worth of transmission to deliver wind power from west Texas (and ultimately from offshore wind turbines in the Gulf of Mexico) to load centers in the Lone Star State.

Texas currently leads the nation with 25 percent of all U.S. wind generation, almost all of it located in the western part of the state. More than $3 billion was invested in wind generation last year and Texas is on track to surpass its current 5,000 MW renewable portfolio standard six years ahead of schedule.

During an executive roundtable at the conference, Michael Sullivan, senior vice president of development for FPL Energy, which has developed more wind capacity than any other company in the United States, said that renewable energy is expensive and people will have to "'pay up". He said "wind is an energy displacement product, not an energy replacement" and that rising natural gas prices will keep wind competitive with other energy sources. He also said that "giant-feed" national subsidies for wind such as those that exist in Spain and Denmark do not work in the U.S., where wind is viable in only about 20 states.

Vic Abate, vice president of renewable energy for GE Energy, said that every additional percentage point of renewable achieved worldwide requires 40,000 wind turbines or 500 million solar panels. Abate said he sees a lot of engineering talent migrating from the gas turbine and aircraft turbine business to the wind turbine sector. While noting that the costs of building wind projects have nearly risen since 2003, the overall cost of wind and solar projects are more heavily leveraged toward materials costs than are other power sources that require fuel.

During a press conference, former Federal Energy Regulatory Chairman Pat Wood III predicted that by 2100 virtually all electricity in the U.S. will be produced by nuclear, wind and solar. Bridging that period, he said, will be coal and natural gas.-Steve Blankinship

Copyright PennWell Corporation Jul 2008

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