Wind Energy Group Hopes for Policy Stability

The American Wind Energy Association (AWEA) has provided some projections for 2009.

“The world’s largest operating wind power project” will be a hotly contested designation this year: At least one new project may soon surpass FPL Energy’s 736-megawatt (MW) Horse Hollow wind farm, which has been the world’s largest for three years running. One project under expansion, by E.ON Climate & Renewables (EC&R) North America, and currently scheduled to go online in mid-2009, would have a total capacity of 781.5 megawatts (MW) when it is completed.

Hopes run high for greater federal policy stability. President-elect Obama has outlined a range of policies that would encourage investments in wind and renewables, and these policies are expected to be on the table for serious discussion and possible early action in 2009. The policies would signal a welcome shift for renewable energy technologies, whose deployment has been hampered by the absence of long-term policy stability.

New policies include:

• adjusting the federal production tax credit (PTC) to make it more effective in the midst of the current economic downturn and extending it for a longer term (it expires at the end of 2009);

• establishing a national renewable electricity standard (RES) with a target of generating at least 25 percent of the nation’s electricity from renewables by 2025, and a near-term target of 10 percent by 2012;

• legislation and initiatives to develop a high-voltage interstate transmission “highway” for renewable energy; and

• strong national climate change legislation.

States will focus on RES, transmission for renewables. Expect one or more states to implement (Indiana) or strengthen (Wisconsin and New York) their Renewable Electricity Standards (RES), bringing the number of states with an RES from 28 to perhaps 30. Look also for some states, including some without an RES (Oklahoma, Kansas, Nebraska) to develop a process to facilitate investment in transmission for electricity generated using renewables. Texas, Colorado, Minnesota, and California have already shown the way with pro-active transmission policies for renewable energy.

“Baseload/peaking” is “out” and “smart mix” is “in.” The electric industry faces dramatic transformations as it wrestles with the challenges of the 21st century. The old paradigm that assumed “baseload” power plants were necessary is being replaced by a new paradigm where both demand and supply are managed in tandem, and electricity is supplied by a smart, clean mix including a high level of renewable and flexible technologies. Under its 20 percent wind by 2030 scenario (, the U.S. Department of Energy found that 20 percent wind would likely reduce the need for new coal and leave the level of nuclear power unchanged.

The fast-growing wind power market is also opening up opportunities for community wind, which are projects owned by farmers, ranchers, or other local investors or public entities. Look for more community wind proposals in 2009, and more AWEA education and outreach on the topic over the course of the year.

AWEA business membership will surge past 2,000 by mid-year. More companies see opportunities in the wind energy industry, and the expanding AWEA business membership roll is a measure of that interest. AWEA business membership increased to more than 600 in 2005, and has soared over the 1,800 mark in 2008.

Industry will finalize guidelines for wind turbine O&M. When an industry becomes mainstream, it needs to put in place a variety of standards and guidelines, and wind power is no exception. AWEA and the wind power industry are working with the Occupational Safety and Health Administration (OSHA) to develop safety guidelines for wind turbine technicians and O&M workers at utility-scale wind projects. AWEA will be presenting educational Webinars to OSHA personnel in early 2009.

AWEA expects to finalize standards for small wind turbines: Standards for small wind turbines will help ensure qualification for the new small wind turbine federal investment credit that is now available for homeowners and small businesses investing in a small wind system. Manufacturing standards have long been in place for utility-scale wind turbines and continue to evolve with the technology.

Homeowners, farmers, and small-business owners now benefit from a federal incentive enacted in late 2008 for the purchase of small wind systems. However, this credit is capped. Owners of small wind systems with 100 kilowatts (kW) of capacity and less can receive a credit for 30 percent of the total installed cost of the system, not to exceed $4,000. For turbines used for homes, the credit is additionally limited to the lesser of $4,000 or $1,000 per kW of capacity. Look for an effort to remove this limitation, so that consumers can benefit from a credit of a full 30 percent of the total cost of a small wind turbine purchased for an individual home or business.