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If it is free, it's for me! This should be the slogan for wind energy because wind is a free, clean and renewable energy source. The United States' dependency on fossil fuels is creating detrimental environmental impacts, such as global warming. This policy issue paper explores the reasons why wind energy should be utilized more as a source of energy in the U. S. and suggests possible policy alternatives to achieve increased use of wind energy.
Legislation such as the American Clean Energy and Security (ACES)Act (H.R. 2454), would provide an important control of green house gases by penalizing companies which emit too much carbon dioxide by imposing cap and trade limits. The ACES act expects electric suppliers to meet at least 20% of their power demand from renewable sources by 2020.
The American Recovery and Reinvestment Act, provides a three year extension of Production Tax Credits, which provide financial support to wind power generators and also authorizes an additional $1.6 billion dollars of bonds to finance facilities that generate renewable energy.
New interstate transmission lines are critical to the health and future of the wind power industry. Without a viable transmission network wind energy cannot be delivered to the marketplace. Wind energy needs to be transported over a transmission grid from remote areas where it is generated to urban city markets. A developed grid increases competition and offers consumers the potential for lower cost electricity. Investment in new a transmission grid will pay for itself in a few years and the savings to consumers is tremendous.
Research and development directed by the Department of Energy Federal Wind Program is important in making turbine components efficient and cost effective. Design and testing is necessary to increase productivity, decrease costs and enhance the popularity of wind energy.
Statement of the Problem
The question is how do we get wind energy to be a more utilized energy source in the United States? A possible answer is by improving regulations for wind energy while engaging the business community to utilize wind energy as a clean, renewable, sustainable energy source?
This policy issue paper will explore three policy alternatives at the federal level to promote wind energy production and utilization in the United States. The alternatives illustrate different perspectives and priorities on the pressing environmental issue of reducing carbon emissions in the United States by increasing the use of wind energy. The goal of this paper is to analyze which of the three presented policy alternatives could be considered the best solution to promoting wind energy production and utilization in the U. S.
Background, Scope, and Severity of the Problem
Wind energy is not a new type of energy. It has been used as a supply of power for thousands of years by societies in applications such as sailing, pumping water and grinding grain. However, until the oil crises of 1973 and 1979 and the rising concern regarding the environmental impact of global warming, did wind energy start to receive more attention as a promising new clean and renewable energy source of electric power. Today, wind power accounts for about 2% of the electricity generated in the United States (Behr, 2010, pg.1).
The total wind power capacity now operating in the U.S. is over 31,000 MW, generating enough electricity to power the equivalent of nearly 9 million homes, avoiding the emissions of 57 million tons of carbon annually and reducing expected carbon emissions from the electricity sector by 2.5% (American Wind Energy Association, 2009, pg.1). Wind costs an average of 5 cents per kilowatt-hour to produce and this overall price is much lower than all other forms of alternative energy (.U. S. Energy Information Administration Independent Statistics and Analysis, 2010, pg.1). Besides combating the environmental issues of air pollution and global warming, wind energy does not have any waste products, such as nuclear energy biproducts.
The United States' main source of energy is currently fossil fuels however; the fossil fuel supply continues to be depleted. The U. S. accounts for approximately four percent of the world's population but produces roughly twenty-three percent of global greenhouse gas emissions and forty-two percent of industrialized country emissions from burning fossil fuels ( Energy Information Administration, 2005). The United States needs to seek alternatives to fossil fuels and wind energy is a very viable alternative because it is free, abundant, clean, renewable, and sustainable by nature, does not contribute to global warming and is cost competitive with traditional coal and oil powered electricity sources.
Review of Policy Alternatives
Public policy can help the wind energy industry to address problems and promote utilization and development of wind energy. The following three policy alternatives are potential options:
Alternative 1: Enact new and maintain current legislation: The American Clean Energy and Security Act H.R. 2454 and the American Recovery and Reinvestment Act (ARRA) of 2009.
1. A. The American Clean Energy and Security Act (ACES) H. R. 2454 was passed by the House of Representatives in June 2009 and is still under consideration by the U. S. Senate (Dutzik, & Figdor, 2009, pg.4). This act is a landmark step by Congress to support renewable energy including wind energy and it was the "first time either house of Congress had approved a bill meant to curb the heat-trapping gases scientists have linked to climate change" (The Library of Congress. Bill Summary & Status 111th Congress, 2009-2010, pg.1). The ACES Act sets forth provisions concerning clean energy, energy efficiency, reducing global warming pollution, transitioning to a clean energy economy, and providing for agriculture and forestry related offsets.
In the ACES Act, a designated cap is placed on fossil fuel discharges such as CO2 and SO2 which are greenhouse gases; this will help direct the fossil fuel power industry to look more seriously at renewable wind energy. The cap and trade portion of ACES allocates a dollar amount "allowance" that penalizes those who use or emit a specified amount of CO2 or SO2 into the atmosphere. "The cap starts in 2012 and declines in each year through 2050. It aims to reduce global warming emissions from covered sources by 3 percent below 2005 levels by 2012, 17 percent by 2020 to 83 percent by 2050." (Dutzik, & Figdor, 2009, pg.22). ACES also specifies provisions "creating a combined energy efficiency and renewable electricity standard and requiring retail electricity suppliers to meet 20% of their demand through renewable electricity and electricity savings by 2020" (The Library of Congress. Bill Summary & Status 111th Congress, 2009-2010, pg.1). Part of requiring electric suppliers to utilize renewable sources includes the federal government, who is a major consumer of electricity. ACES provisions are critical to addressing energy efficient standards and specific nationwide limits for fossil fuel emissions the main causes of global warming.
Key Recommendations: Senate to approve the legislation, American Clean Energy and Security Act
1.b. The American Recovery and Reinvestment Act (ARRA) signed into law by President Obama on February 17, 2009, encompass several positive steps toward the future of enhance energy independence by fostering various energy, environmental, and science programs and initiatives. One such step was to provide a three -year extension through December 31, 2009 of the renewable energy production tax credit (PTC), established in 1992, for renewable electricity generated from large scale wind turbines (American Wind Energy Association, n.d. pg.1).
Another provision of the act allows "wind energy facility owners to choose a 30% business energy investment credit rather than the production tax credit through 2012" (National Renewable Energy Laboratory for the U.S. Department of Energy, 2010.pg.4)
The act also authorizes "an additional $1.6 billion dollars of new clean renewable energy bonds to finance facilities that generate electricity from the following resources: wind, closed and open loop biomass, geothermal and hydropower" (American Wind Energy Association., 2009.pg.2). "For wind turbine manufacturers, the Recovery Act provides a tax credit for qualified investments in new, expanded, or re-equipped domestic facilities engaged in the manufacture of renewable energy equipment. Credits, which will be worth 30% of the investment, are made available" (National Renewable Energy Laboratory for the U.S. Department of Energy, 2010, pg.2). ARRA also "amends the energy policy act of 2005 to create a new loan guarantee program at the Department of Energy (DOE) funded at $6 million dollars. The program applies to both "commercial" and "innovative" technologies; generation projects, transmission and manufacturing facilities are eligible" (American Wind Energy Association, 2009, pg.3).
Key Recommendations: (1) Congress should pass legislation which would extend the PTC for five additional years providing stability to wind energy industries which would allow them growth consistency. (2) Increase funding for the Clean Renewable Energy Bonds (CREBs) which would provide an incentive for renewable energy development. (3) Congress should pass the ACES act.
Alternative 2: Provide funding and incentives to create an inter-state power transmission grid. The transmission of the power created by wind energy to the end user is critical to the overall health of the wind power industry. The majority of wind farms are located in rural locations, often hundreds of miles from large cities. Thus there is an urgent need to construct an interstate transmission network to deliver wind electricity to the marketplace. "Perhaps the biggest obstacle to the long-term growth of wind power and other renewables in the U. S. is the lack of available transmission" (American Wind Energy Association, 2009, pg.4).
Therefore, policies which promote funding and financial incentives are required for construction of the system of transmission towers and power lines. "Much of the nation's best wind resources cannot be tapped to meet our increasing energy demands without new transmission system capacity" (National Renewable Energy Laboratory for the U.S. Department of Energy, 2006, pg.7). Organizing multi-state transmission grids can be a long and difficult process because it involves numerous state, local and federal agencies who need to agree on the plan. "Upgrading the nation's transmission system, will have substantial costs and will cross many organizational boundaries (federal, state and local) (National Renewable Energy Laboratory for the U.S. Department of Energy, 2006, pg.7). " This joint program effort (Wind Energy Program and DOE Office of Electricity Delivery) will focus on linking remote regions with low cost wind power to urban load centers, allowing thousands of homes and businesses access to a abundant renewable energy" (National Renewable Energy Laboratory for the U.S. Department of Energy, 2006, pg.7).
It is generally accepted, that in order to plan for an increase in renewable energy such as wind power, new transmission power grids must be constructed or the wind generated electricity will not be able to be efficiently utilized. "To achieve the proposed transmission expansion for the 20% wind energy by 2030, DOE's report says the 19,000 miles of high capacity lines will be required, at a cost of just over $20 billion dollars in net present value, if spread out over the time period " (National Renewable Energy Laboratory for the U. S. Department of Energy, 2008, pg.10).
It is important to realize in most cases new transmission highways are needed. President Obama said, "One ofâ€¦the most important infrastructure projects that we need is a whole new electricity grid. Because if we're going to be serious about renewable energy, I want to be able to get wind power from North Dakota to population centers like Chicago." (Gramlich, Goggin, Gensler, 2009, pg.18).
Key Recommendations: (1) Congress should pass legislation and financial support for planning and construction of a interstate transmission grid to deliver power from wind energy resources to required markets and encourage states cooperation. (2) Congress should financially support transmission planning efforts in areas where wind energy is available and can be incorporated into neighboring markets.
Alternative 3: Research and development for large scale wind turbine technology
Additional funding for research and development is needed for the major components of large wind turbines in order to make them more efficient, cost effective and to enhance the popularity of wind energy. The DOE Federal Wind Program works with private and public institutions to design and test large wind turbine components such as towers, drive trains, (gear box and generator) and blades. Many of these joint projects focus on reducing the cost of wind energy by design improvement and increasing efficiency. Much more needs to be acomplished to increase wind energy's presence in the energy market. "The DOE Wind Program currently receives $50 million annuallyâ€¦in comparison, the research and development budget for nuclear energy is over $960 million, while coal receives nearly $500 million, solar receives over $160 million"(American Wind Energy Association, 2008,pg.20).
Wind turbines need to get larger to improve energy capture. One improvement is to build taller towers to access stronger winds at higher elevations by using lighter material which reduces weight and saves on transportation and installation in remote areas. "Over the next two years, DOE will invest up to $70 million in Recovery Act funds to develop facilities capable of testing next-generation wind turbine blades and drive trains"(National Renewable Energy Laboratory for the U.S. Department of Energy, 2010, pg.8). Also, blade development and testing is probably the most important aspect of DOE's Federal Wind Program to insure top efficiency and cost effectiveness to make wind energy a desirable choice. "The air foil's (blade) shape, mechanical properties and weight determine the loads transmitted to the other components in the turbine. The Federal Wind Program works to develop and test advanced blade technologies that can increase energy capture and decrease weight and transferred loads thereby reducing capital costs"( National Renewable Energy Laboratory for the U.S. Department of Energy, 2010, pg.10). The drive train main parts, such as the gear box and generator, have major wear components like bearings and gears that are under constant stress. Therefore, future research and development should be focused on technology that reduces fatigue and wear, which improves reliability and decreases costs.
Both government and private industry understand the need for further research in order to reduce capital costs and increase efficiency which will lead to reduced cost of energy. "Industry feels the risk of bringing new technology into the marketplace without a full-scale development program is too great and believes sustained RD&D would help reduce risk and help enable the transfer of new technology to the marketplace" (National Renewable Energy Laboratory for the U. S. Department of Energy, 2008, pg.43).
Key Recommendations: (1) Congress should pass legislation to increase funding for research and development within the federal Wind Program.
Wind energy is a clean and renewable resource. The efficient integration of wind energy is a critical part to our need for a reliable power source. State of the art wind turbines can be built and the government may provide incentives to reduce emissions, but if there is not a reliable mechanism to transport the generated wind energy, it is all in vain. Therefore, alternative 2, to provide funding and incentives to create an inter-state power transmission grid, is the most important to be implemented.
Economic benefits resulting from implementation of an inter-state power transmission grid includes reduced electric costs, increased competition, increased local employment and greater personal income from energy savings. The public sector and the world will benefit through improved air quality and improved public health by reducing CO2 emissions. Other effects of an investment in a new transmission grid will decrease costly and dangerous power outages that the U. S. experienced in the past several years.
The Electric Reliability Council of Texas (ERCOT) study stated the benefits of an investment in new transmission infrastructure for renewable would grow to be larger than the costs of the investment in less than three years (Gramlich, Goggin, Gensler, 2009, pg.2). "The JCSP study found that an $80 billion investment in the transmission infrastructureâ€¦would produce enough benefits to pay for itself in seven years (Gramlich, Goggin, Gensler, 2009, pg.13). In 2008, ERCOT study found that the smallest transmission investment plan would bring enough new wind online to save $1.2 billion per year in fuel costs - enough savings to cover the $3.8 billion costs of the transmission infrastructure in a little over three years (Gramlich, Goggin, Gensler, 2009, pg.14).
One limitation is the slow economy in parts of the U. S. resulting in a decrease of demand for electricity. Therefore, current energy sources might be a sufficient supply to meet current demand. Also, the oil spill in the Gulf of Mexico is creating awareness in Congress of the need for clean, renewable energy which may create opportunities for wind energy.
In summary, wind energy is the clean energy of the future provided that policy is in place to promote research and development, financial incentives for implementation and regulation of emissions providing U. S. citizens a clean and health environment by an economical source of electrical energy.