With a new resurgence of market, technology and public policy activity permeating the industry, stakeholders in the growing wind power sector gathered early in June in Los Angeles at the American Wind Energy Association (AWEA) annual meeting, and everything about the sessions was larger than in previous years — from the participants and exhibitors numbering more than 7,000, 400 suppliers, including names from the broader energy industry, and a fresh ambitious vision for wind’s heightened role in a global climate change-driven alternative energy world.
AWEA rolled out a new five-year action plan as the start of an admittedly stretching goal for growing the wind industry to provide more than 300 GWh of electricity supplies nationally by 2030, or 20% of the projected U.S. electricity supplies at that time. The new vision was established by the AWEA board of directors at a meeting June 3, the first day of its four-day national meeting in downtown Los Angeles Convention Center. The more than 7,000 attendees/exhibitors represented a sevenfold increase in just a few years, according to Randall Swisher, AWEA executive director.
Public policy issues at the national level permeated through the conference, and the promise of robust markets and increased power penetration created an atmosphere a lot like the bullish tone of an oil/gas industry meeting these days. AWEA has set next year’s meeting (June 1-4) in Houston.
The time is ripe for getting a national renewable portfolio standard (RPS) out of Congress perhaps this year, and an extended multi-year production tax credit along with other measures that eventually can give the nation its first “coherent, coordinated” energy policy ever, former U.S. Senate Minority Leader Tom Daschle told the opening day participants at AWEA. Now an advisor to a Washington, DC, law firm, Daschle joined four renewable energy stakeholder representatives in a panel discussion on “Growing the Wind Energy Business.”
Daschle urged wind industry stakeholders to “aggressively, innovatively engage at every level” of the ongoing public policy debate surrounding global climate change, alternative energy and renewables. He called for a “new, intricate political partnership,” and said Congress in the weeks and months ahead will be “attempting to design this partnership, and it requires [the wind industry’s] involvement.” After having a national RPS passed in previous Senate votes only to have it fall short in the House of Representatives, Daschle said he thinks “this will be the year we pass it in the House, too.”
While joining fellow speakers from BP, GE Energy, Global Wind Energy Council and the federal Department of Energy (DOE) in reminding the wind industry audience that they face many barriers to achieving their long-term goals, Daschle, an advisor at Alston + Bird LLP, tried to expand the discussion to the economic development advantages of renewables generally, and wind energy particularly.
In between printed handouts and audio/visual promotions to “Take Action!” on the issues now being debated in Congress, AWEA’s Swisher outlined six real barriers to the wind industry’s very aggressive vision of going from providing 15 GWh of power at the end of this year to 300 GWh in 2030, with the public policy questions of the PTC and national RPS heading the list. The other five he articulated as:
“It’s a major challenge that requires a transformation of the electric power industry, and a whole number of things that we don’t have today,” Swisher said. “The board of directors’ five-year action plan is designed to lay the foundation for making the [300 GWh] vision a reality.”
Swisher said the industry estimates that ultimately it will take a $60 billion investment in new transmission during the next 25 years to get the wind industry to the 300 GWh production level, but the estimated savings in avoided natural gas costs alone is on the magnitude of $240 billion during that same 25-year period.
Disagreement was expressed on the relative importance of various congressional remedies from carbon taxes to production tax credits (PTC), however, there is agreement that climate change is the overarching issue on which the wind industry and renewables more generally can stake their future growth.
While federal employee Steve Wright, the chief administrator at Bonneville Power Administration (BPA), declined to voice a preference for congressional action, Jan Schori, general manager of the Sacramento Municipal Utility District (SMUD), prefers a carbon tax; Yakout Mansour, CEO of the California Independent System Operator (CAISO); thinks a cap-and-trade system ultimately will win out, and Paul Bonavia, Xcel Energy president, wants a national renewable portfolio standard (RPS).
Former Federal Energy Regulatory Commission Chairman Pat Wood, now chairman of U.S. operations for Ireland-based Airtricity Inc., a global renewable energy company, posed the question as moderator of a panel looking at “Utility Leadership in Wind Energy Development.” He wanted the panel members to select their favorite national action.
For its internal planning purposes, Xcel Energy has modeled the impact of three different scenarios — a national carbon tax, a national cap-and-trade system for greenhouse gas (GHG) emissions and a national RPS — and concluded that the RPS would be preferable, said Bonavia, who called climate change “the overarching issue.” Xcel modeled the different national measures “one against the other for planning and marketing modeling, and we liked the clean energy portfolio standard (RPS) approach the best. That is what we are advocating.”
Xcel’s conclusion was based on the fact its models tended to show that with a carbon tax or cap-and-trade system, utilities more likely will switch to more natural gas-fired generation, much more so than renewables, he said. Bonavia said Xcel wants to cut short the period it takes to get more migration to renewables through technology advances, and he thinks the national RPS approach is the best way to accomplish that.
The other advantage of a national RPS, according to Bonavia, is its potential to help boost other renewables — not just wind — and something that allows for all of the clean technologies will have the best chance of winning national support by a majority of the states — not just states such as the eight in the center of the country where Xcel operates that fall in the strong wind resource category.
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