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Forces Driving Wind Power Development

Forces Driving Wind Power Development. Pat Walsh UW-Madison/Extension Focus on Energy Program. Drivers for Wind Power. Fuel Price Uncertainty Energy Security Federal and State Policies Economic Development Green Power Declining Wind Costs. US Escalating Energy Use.

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Forces Driving Wind Power Development

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  1. Forces Driving Wind Power Development Pat Walsh UW-Madison/Extension Focus on Energy Program

  2. Drivers for Wind Power • Fuel Price Uncertainty • Energy Security • Federal and State Policies • Economic Development • Green Power • Declining Wind Costs

  3. US Escalating Energy Use

  4. CHINARECENT ENERGY FACTS • China accounts for at least 40% of the growth in global oil demand. • In 2004 China will use 830,000 barrels a day more than last year which is about a third of world demand growth, which may soon be fifty percent. • Chinese energy consumption will more than double in the next twenty years. • Source: US Energy Information Administration

  5. Energy Security Issues Are Growing • Three quarters of the world’s known petroleum reserves are in the Middle East • Most of these are in three countries • Saudi Arabia • Iran • Iraq

  6. Natural Gas Source: Community Office of Resource Efficiency

  7. Natural Gas Price Volatility

  8. Emissions Growth (1990-2020) GT Res/Comm 4% Industrialized 25% Industrial 22% Transport 27% Developing 75% Ind. Power Generation 47% Dev. Economies Sectors Carbon Growth Highest in Developing Countries Annual Carbon Emissions GT/yr Industrialized 0.8% 0.7% 1.2% 2.4% 2.3% Developing 2.2% Developing Share 50% 52 56 60

  9. Shrinking Polar Ice Extent of Arctic summer ice in 1979 (top satellite image) and in 2003 (lower satellite image). NASA photograph

  10. The Energy Policy Act of 2005Public Law 109-58

  11. Renewable Depreciation Deductions • Businesses can recover investments in solar, wind and geothermal property through depreciation deductions under the Modified Accelerated Cost-Recovery System (MACRS) • For solar, wind and geothermal property placed in service after 1986, the terms are five years.

  12. Renewable Electricity Production Tax Credit • Provides a business tax credit of 1.5 cents/kWh, adjusted annually for inflation, for electricity generated by wind, closed-loop biomass and geothermal (1.9 cents/kWh adjusted for 2005) • Electricity generated from open-loop biomass, small irrigation hydroelectric, landfill gas, municipal solid waste resources and hydropower receive half that rate (currently 0.9 cents/kWh). • Available through December 31, 2007 for renewables

  13. Renewable Energy Production Incentive • New qualifying renewable energy generation facilities eligible for annual incentive payments of 1.5 cents/kWh for the first 10 years of operation. • Qualifying facilities must use • Solar • Wind • Geothermal • Biomass • Landfill gas • Livestock refuse • Ocean generation technologies (tidal, wave, current and thermal) • Fuel cells using hydrogen derived from eligible biomass facilities

  14. 2005 Wisconsin Act 141 • Renewable Portfolio Standard- requires utilities to generate 10% of their power from renewable energy by 2015 • Requires state government to use renewable energy • 10% by 2007 • 20% by 2012

  15. Wind Cost of Energy 12 10 8 Low wind speed sites COE (¢/kWh [constant 2000 $]) 6 Bulk Power Competitive Price Band High windspeed sites 4 2 0 1990 2010 2020 1995 2005 2015 2000

  16. Growth of Wind Energy Capacity Worldwide Actual Projected Jan 2003 Cumulative MW Rest of World = 2,803 North America = 5,018 Europe = 21,319 Rest of World Rest of World North America North America Europe Europe MW Installed Year Sources: BTM Consult Aps, March 2001 Windpower Monthly, January 2003

  17. Wisconsin Wind Profile

  18. Conclusion • Many forces driving wind development • Some areas of Northwest Wisconsin may be a good places for wind development • Now is a good time for communities and citizens to learn about this technology

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