Taking Advantage of America’s Wind Resources

1. Taking Advantage of America’s Wind Resources Providing Infrastructure and Implementing Predictable, Long-Term Incentives Ross Beppler Wise Presentation 7/25/12

2. What’s the Challenge? • Any way you look at it (yearly gross, per capita, historical) the United States emits large quantities of carbon dioxide • 315,000 million metric tons of carbon dioxide have been emitted since 1900

3. The Impact of the Power Sector • The Power Sector has a huge impact on the carbon dioxide emissions in this country • Nearly 70% of power generation comes from fossil fuels • 92% of coal is used for electricity • Wind can be used as a means of power generation

4. Why Wind? • Part of a diverse portfolio • Abundant • Low Levelized Cost of Energy (LCOE) • Minimal land impact • Domestically produced: over 500 US manufacturers produce parts for turbines • Demonstrated Success: 90% reduction in cost since 1980, 35% of new generation the last 5 years

5. How Does Wind Work? • Not a New Concept: 5000 B.C. first harnessing of wind energy 200 B.C. first windmill 1890 first electricity production WWII first U.S. use • Capacity Factor- Ratio of Maximum Potential Output to Actual Power Generation • Wind Classes

6. Energy Policy in the United States • 1970 oil embargos begins federal investment in wind energy • 1978 Energy Tax Act establishes first federal tax incentive • 1992 Original Production Tax Credit set at 1.5 cents per kilowatt-hour • The Production Tax Credit has been the primary government incentive • PTC will expire in 2013

7. Does Wind Receive an Unfair Advantage from the Government? • Not so fast! • Long History of Government Subsidies for Energy Production • Federal Subsidies for Fossil Fuels are part of the permanent Tax Code • Research and Development funding is skewed in favor of fossil fuels

8. What Other Obstacles Does Wind Face? • Variability • Lower Capacity Factors than other forms of generation needs back up generation • Leveling of costs • Kills birds and bats • Results in Shadowing and Noise • Transmission Infrastructure

9. What do we do?Policy Alternatives • Something

10. Production Tax Credit Extension • Extend the Production Tax Credit

11. Renewable Portfolio Standards • Requires electricity producers to provide a certain percentage of their generation from renewable sources • Primarily a state incentive thus far • Success of state programs has garnered attention for a national model • Bingaman, Markey, and Waxman sponsored bills with different priorities

12. Cap & Trade • Sets a limit to the emissions allowed before a penalty is imposed • Creates a market for Renewable Energy Credits which can be traded allowing market forces to set the price • Potential complications with offsets

13. Recommendation: Carbon Tax • Technology Neutral Solution • Existing infrastructure to put in place • Not as prone to corruption • Continuing incentive to reduce emissions • Applicable to all power generation • Could be applied to gasoline consumption • Allow states to continue setting RPS • Revenue Generation could pay for necessary grid Improvements

14. Acknowledgements • For help with the paper the author would like to recognize: • Erica Wissolik, IEEE-USA, and everyone involved in the WISE program who made this opportunity possible • Bill Behn, Factuly Member in Residence • The IEEE Energy Policy Committee for allowing access to their meetings and correspondence • Charlton Clark at the Department of Energy for providing an inside look at the DOE’s Wind Program, and giving valuable information and contacts • Former WISE interns for their advice, specifically Levi Lyons for his guidance on transmission issues • John Buydos at the Library of Congress for providing assistance navigating the vast resources of the library, and selecting some initial resources • To the many others in D.C. and beyond who were consulted as a part of this process and aided in the completion of this report • To the author’s parents for their moral support and editing help