Wind Energy Across Governmental Sectors

Britta L. Timpane-Padgham

521 Final Paper

Wind Energy Across Governmental Sectors

Wind Policy in the United States as we know it today began in the 1980’s with the first utility-scale wind turbine in California. Early national policy utilized investment tax credits which were based on installment and not performance like current policies. Investment tax credits fueled the initial installation of wind turbines but they were not very reliable or productive (7). These tax credits expired in 1986 and the industry saw few policy efforts until 1992 when performance bases tax credits (PTC’s) were introduced. A primary driver for wind energy development has been incentive based tax credits, especially PTC’s because investors were encouraged to focus on electricity output rather and installation (11). However, these credits have been allowed to expire several times and this lack of consistency in national wind policy has left investors uncertain.

I surveyed bills from the 111th and 112th Congress for policies addressing wind energy and power (see attachment). In the 111th Congress there were 31 bills which incorporated or focused on wind energy. Most of the policy tools implemented in these bills were incentives via tax credits and adaptation approaches through research and development. Only one of these bills was passed: America’s Recovery and Reinvestment Act of 2009 (updated from 1992) (ARRA). The ARRA was an economic stimulus bill with several provisions to encourage wind energy development: it extended PTC’s through 2012, included other investment tax credits for renewable energy projects, and grants for small-scale projects (4). As of now the 112th Congress has introduced 13 bills, none of which have been passed. This round of bills has several which directly address wind energy production by way of incentives to spur economic opportunities. Examples include the Community Wind Act, Utilizing America’s Federal Lands for Wind Energy Act, Advancing Offshore Wind Production Act, and Incentivizing Offshore Wind Power Act. Two of these bills have been placed on the Union Calendar and the others have been read twice and are currently sitting in committee (10).

Wind energy has also caught the attention of the Executive branch of the Federal government. In 2010 the Department of Energy (DOE) and the Department of the Interior (DOI) made available $50.5 million for funding opportunities to accelerate the development of offshore wind energy (15). Efforts towards offshore wind are primarily taking place at the federal level because of the high costs associated with the industry. The DOE also has a Wind Program which is focused on wind power education and provides information on state-by-state breakdown of wind resource potential (13). In a 2009 Executive Order President Obama required each federal agency to submit targets for reducing emissions by 28% by 2020. Part of this reduction was to be done by shifting to clean energy sources like wind power. This effort is in recognition that the U.S. government is the largest energy consumer in the economy, but importantly it is trying to reduce overall costs in energy in an economically challenged time (14).

While there are some efforts at the federal level, uncertainty in national policies continues to hinder wind energy development. However, targets for renewable energy in 29 of the 50 states have helped drive wind installations in many regions. Washington is one of these states with a Renewable Portfolio Standards policy (RPS) passed in 2006 (3). This mitigation policy requires utilities that serve more than 25,000 customers to obtain 15% or their electricity from renewable resources. Washington State has also supported wind power through incentive measures like Senate Bill 6170 and Legislative act EHB 2247. Bill 6170 is effective through 2020 and extends state tax exemptions for small-scale renewable energy projects. The Mandatory Utility Green Power Option (EHB2247) requires that all electric utilities serving more than 25, 000 customers must offer the option to purchase renewable energy including wind (5). These incentive based measures combined with federal tax incentive policies are strategies to promote wind technology development and investment with minimal conflict.

Washington is a relatively progressive state, but there is some disparity between the eastern and western political ideologies. This is reflected in the extending policies and initiatives taken by King County and the cities in the eastern region. In the same year the state passed the RPS’s, King County’s Executive Ron Sims issued a Renewable Energy Executive Order. This order worked similarly as the RPS’s but addressed energy use in the transportation and building sectors (9). In response to the executive order King County created an Energy Plan that has was last updated in 2010. Wind is defined as a renewable energy option for these county-wide mitigation policies (8). Wind energy policy is also present at the city level in Puget Sound. The City of Seattle currently receives only 2.5% energy from renewable with 2.3% coming from wind primarily generated in eastern Oregon and Washington. The Green Up initiative of Seattle City Light aims to increase the percentage of energy from other renewables but wind is not explicitly mentioned (6).One of the most aggressive polies in the U.S. was passed by Bellingham City Council in 2006. The Green Power Purchasing initiative (GPP) stipulates that all facilities owned by the city to run on 100% green power (5).

Adoption of wind power amongst states seems to be based on a combination of wind capacity and economic factors. There are several states like Texas, Montana, and Oklahoma that are dominantly republican yet have several progressive wind energy policies (16).The economy largely dictates what policies are initiated and passed, and with the decreasing costs of wind power there is more incentive for states with wind capacity to invest in a potential economic return. Wind energy offers opportunities to reduce energy costs in the long-run, provides jobs, technological innovation, federal funding, and political competition. Wind power is now cost competitive with natural gas and technological developments especially with grid integration are creating an environment more conducive for wind technology policies (1). The Production Tax Credits and other tax incentive policies have been the key support mechanism at the national and state levels for renewable energy development including wind (2). Currently, many renewable energy policies explicitly use incentive-based policies to reduce barriers to the market which will also influence future policy. It is a combination and feedback of political incentive policies, technological innovation, and economic viability which make wind policy increasingly present within the political arena throughout governmental sectors.

References:

[1] American Wind Association. 2011. http://www.awea.org/

[2] Beck, Fred and Eric Martinot. 2004. Renewable Energy Policies and Barriers. Elsevier Science. Academic Press.

[3] Cory, K.S. B.G. Swezey. 2007. Renewable Portfolio Standards in the States: Balancing Goals and Implementation Strategies: Technical Report. National Renewable Energy Laboratory.

[4] Obey, R. David (Sponsor). 17, Feb. 2009. American Recovery and Reinvestment Act of 2009. Library of Congress: Thomas. http://thomas.loc.gov/cgi-bin/bdquery/D?d111:1:./temp/~bdBYkY:@@@D&summ2=m&|/home/LegislativeData.php?n=BSS;c=111|

[5] DSIRE: Database of State Incentives for Renewables and Efficiency. 2011. Washington: Incentives/Policies for Renewables and Efficiency. http://dsireusa.org/incentives/index.cfm?getRE=1?re=undefined&ee=1&spv=0&st=0&srp=1&state=WA

[6] Green Up. 2011. Citty of Seattle City Light. http://www.seattle.gov/light/green/greenpower/greenuppr.asp

[7] Gray, Tom. Sept. 2004. State of the Wind Energy Industry in 2004. American Wind Energy Association.

[8] King County Energy Plan. Oct. 2010. http://www.kingcounty.gov/environment/climate/king-county/2010-energy-plan.aspx

[9] King County Executive Office. 1, Apr. 2006. Executive Order on Renewable Energy and Related Economic Development. http://www.kingcounty.gov/operations/policies/executive/utilitiesaeo/put76aeo.aspx

[10] Library of Congress. 2011. 112th and 111th Congress search: “wind energy” http://thomas.loc.gov/cgi-bin/thomas, and “wind power” http://thomas.loc.gov/cgi-bin/thomas.

[11] Logan, Jeffrey and Stan M. Kaplan. 20, June 2008. CRS Report for Congress: Wind Power in the United States: Technology, Economic, and Policy Issues. Congressional Research Service. RL34546.

[12] U.S. Department of Energy. 2010. Wind technologies market report. http://www1.eere.energy.gov/wind/pdfs/51783.pdf

[13] U.S. Department of Energy. 2011. Powering America: state Wind Capacity. http://www.windpoweringamerica.gov/

[14] U.S. Department of Energy. 3, Feb. 2010. President Obama: Federal Government to Cut GHG Emissions 28% by 2020. U.S. Department of Energy: Wind Program. http://www1.eere.energy.gov/wind/news_detail.html?news_id=15779

[15] U.S. Department of Energy. 9, Feb. 2011. Department of Interior Announce Offshore Wind Initiatives: Energy Management Program. http://www1.eere.energy.gov/femp/news/news_detail.html?news_id=16709

[16] U.S. Department of Energy. 2011. Wind Powering America: U.S. Installed Wind Capacity. http://www.windpoweringamerica.gov/wind_installed_capacity.asp

[17] Washington Department of Ecology. 2011. Washington State Climate Policy Laws and Executive orders Policy Framework (2005-2010). http://www.ecy.wa.gov/climatechange/laws.htm