Transmission Availability, Shaky Policy Environment Seen as Wind Power Barriers
The lack of adequate transmission infrastructure and a policy environment that has a stop-and-start quality to it, including the federal wind power production tax credit (PTC) that was recently extended through December 2005, are key hurdles to the further development of wind power in the U.S., participants at a FERC-sponsored technical conference said last week.
"I think the biggest barrier today that's preventing wide access, to wind resources reaching customers, is a robust transmission grid," FERC Chairman Pat Wood noted at the start of the conference, which was held in Denver.
"In our pursuit of regional transmission organizations in the West and the South and across the rest of the country, the FERC has been adamant to focus on the need to have a robust and workable transmission grid -- to have good policies...to have good planning processes that support the development of transmission."
Meanwhile, New Mexico Gov. Bill Richardson (D-NM) laid out a detailed blueprint for how the country can kickstart further development of wind power.
Specifically, Richardson said that the U.S. Congress must "create a stable environment" for wind power development. "No more 14-month extensions of the production tax credit. It should be a five or 10 year commitment that allows investors and utilities to plan and to build."
The PTC provides a 1.8-cent per kWh credit (adjusted annually for inflation) for electricity produced during the first 20 years of a wind project's operation. President Bush recently signed into law legislation extending the PTC, which will remain in place through December 2005 and is expected to spur a new wave of wind energy installations across the country.
The New Mexico governor also said that federal lawmakers need to create investment incentives and investment tax credits for wind energy storage products. "It's time to move from research into implementation and what we should do is integrate wind with conventional fuels such as coal," he said.
"Third, the country should invest in electric transmission infrastructure the way we invested in interstate highways. When we resolve wind energy's storage challenge," it will start to make sense for investors to start building large power lines from wind-swept, less populated areas, such as the Dakotas, Wyoming and New Mexico, to population centers, he said.
"Again, this is going to need tax credits, but these tax credits will pay for themselves over and over again when American businesses and consumers gain a measure of protection from the energy price uncertainty that exists today and that has gouged our economy in recent years."
Richardson also called for the repairing of regulatory planning and siting problems in the U.S. transmission system. "FERC should immediately revise its tariff structure to allow more wind development," he said. "FERC should also continue to increase its support for regional planning structures, such as the Rocky Mountains Area Transmission Study, which some of the Southwestern Governors hope to replicate soon."
In addition, the governor pressed for the enactment of a national renewable portfolio standard. He noted that several states already have requirements for renewable energy. "Congress again has fallen behind the states," Richardson said. "It's time for Congress to help push for home grown, job producing, reliable renewable energy development by enacting a national standard."
Richardson also said that the U.S. needs to act "moderately" in approving plans for natural gas imports. He said that if the country allows for "vast amounts" of liquefied natural gas imports, "we might suppress wind development and put our economy [in] further danger of being held hostage when an overseas government changes or when a producer falls out of favor...," he said.
Along with transmission-related issues, Matthew Brown of the National Conference of State Legislatures (NCSL) told the conference that he sees two other key challenges facing the wind power sector. Brown is the energy program director at the NCSL.
One challenge facing wind is the state-level siting process for wind generators, he said. "Just as with all generation, it's sometimes difficult to site wind turbines. It's likely, for instance, that some of the windy land in Kansas -- in the Flint Hills -- may be put off limits to new wind development," Brown noted.
Kansas Gov. Kathleen Sebelius recently received recommendations from a Cabinet team aimed at balancing conservation efforts in the Flint Hills and development of wind energy.
"Other states have considered moratoria on new wind development," the NCSL official said. "State level siting processes vary a great deal, but some of them will certainly stand in the way of some number of megawatts of wind generation capacity being built."
The other issue has to do with the certainty of U.S. renewable policy. "The wind industry is in a boom-bust cycle that corresponds with the production tax credit," Brown said. "This places tremendous stresses on the industry, so that when the tax credit is renewed for short periods it puts the industry in the position of developing a boom-bust cycle."
Lee Otteni, an official with the Bureau of Land Management (BLM), described the potential for wind power development on federally-controlled lands. In September, BLM issued a draft programmatic environmental impact statement (DPEIS) on wind energy development on BLM-administered lands in the Western U.S.
Otteni said that of the 174 million acres that the BLM administers in the 11 Western states, there are over 20 million acres of good wind resource. "When we did a[n] economic analysis to bring down that gross number to what is realistic, we are projecting that there [are] 160,000 acres of BLM land that are economically developable within the next 20 years." BLM projects about 3,200 MW of wind development in that timeframe on those lands.
Otenni called for the pursuit of a programmatic EIS on transmission. "We were in hopes of having dual analysis of the wind and the transmission. Unfortunately, we had money enough for one and not two. Without this programmatic assessment of corridors, it's going to be another time warp that we find ourselves in in bringing the power to the grid."
The BLM official suggested that the Departments of Agriculture, Interior and Energy collaborate on a regional transmission analysis.
In comments filed at FERC prior to the conference, the Western Interstate Energy Board (WIEB) suggested that the Commission study the degree to which the federal agency's landmark Orders 888 and 889 are making unused transmission capacity available in the Western Interconnection, to determine what actions the Commission "needs to take to make existing transmission capacity available for wind development."
The WIEB is an organization of 12 Western states and three Western Canada provinces. It serves as the energy arm of the Western Governors' Association (WGA).
The WGA this summer agreed to examine the feasibility and actions required to reach a goal of 30,000 MW of clean energy by 2015 and a 20% improvement in energy efficiency by 2020.