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Rebates versus subsidies

Discussions on how best to support wind's entry into California's new competitive market continue to rage. Although the American Wind Energy Association is against the track now being pursued by the California Energy Commission, other renewables lobbyists support it.

Discussions on how best to assist wind's entry into California's new competitive market continue to rage. Although the American Wind Energy Association (AWEA) is against the track now being pursued by the California Energy Commission (see main story), other renewables lobbyists support it.

The executive director of the Center for Energy Efficiency and Renewable Technologies (CEERT), V. John White, maintains that the best investment over the long haul for all renewables, including wind, is rebates to customers who choose to pay a premium for green electricity. Among CEERT's members are wind developers Zond Systems and SeaWest Energy.

White says he is aware that groups like AWEA and the Independent Energy Producers (IEP) favour using the money available to subsidise sales to utilities from existing projects, or subsidies sales of renewables into the new wholesale power pool -- dubbed the Power Exchange -- starting next year. But he prefers developing a customer oriented market where consumers buy wind and other green power sources at a premium. "The first approach represents the past; the second -- customer driven green markets -- is the future," says White.

He also says that efforts by IEP and others to bash emerging technologies such as solar are foolish. "Attacking the PV industry flies in the face of reason since the solar industry is probably the most popular renewable resource among the public. IEP and AWEA should find a better target," he says.

White concedes that AWEA's Nancy Rader has pin-pointed some of the weaknesses in a market driven by consumer preferences, including just who would see the greatest benefit from rebates -- retailers or producers of renewable energy. But he says the wind industry should investigate federal loan guarantees and other mechanisms to assist in financing projects in the absence of long term utility contracts. "We are entering uncharted territory and I can understand the hesitancy of the wind industry to abandon what worked in the past," he comments.

Hap Boyd, director of regulatory affairs for Zond Systems, the largest US wind developer, also disagrees with AWEA's approach. He freely acknowledges that some existing wind facilities will be closed under the California Energy Commission's latest subsidy plans, but says it was to be expected as the industry moves to a competitive world. Unlike Rader, Boyd sees customer rebates as the key to opening up future wind markets. "Instead of beating up on the concept of customer rebates, the wind industry should focus on how to make it work," says Boyd.

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