Visit windpowermonthlyevents.com for the latest on our upcoming conferences and webcasts

United States

United States

Agency says cost of support minimal

As much as 30,000 MW of new wind development could be installed in America over the next 20 years with a national Renewable Portfolio Standard (RPS), about 18 times the nation's current installed wind capacity. But the RPS would have to be more generous than the one proposed by President Bill Clinton last year to overcome the cost advantages of conventional fuels.

So says the Energy Information Administration (EIA), part of the US Department of Energy (DOE) and the Clinton Administration, in the conclusions of a new report, "Annual Energy Outlook 2000." Furthermore, it says Clinton's RPS -- a mechanism which fixes the proportion of renewables to be included in the electricity supply portfolios -- would probably fail to boost renewables enough to achieve its own goal, prompting only a marginal amount of new wind and other renewable development.

"The economic value of the limited, temporary renewable energy credit is not large enough to overcome the cost advantage of fossil fuel technologies, especially new natural gas fired turbine and combined cycle plants," the report concludes. Carbon emissions, however, would be cut by 19 million metric tons by 2010, or by about 1.1%, it says.

If the PTC were extended through to 2020, the electricity produced from wind generation would be would be 32% higher than with the Clinton RPS alone and by 2020 it would be 46% higher. Additional wind capacity would be 1.81 gigawatts higher by 2020. Prices would be changed little, especially since increases are spread across all electricity sales. With no cap and sunset, an RPS would up electricity prices by 3.2% -- $5.8 billion -- by 2010. They would then decrease to 1.4% or $2.1 billion over the reference case prices by 2020.

Clinton submitted the RPS, part of the Comprehensive Electricity Competition Act, to the US Congress last April. His bill requires that 7.5% of America's electricity come from renewables by 2010. For the next five years the proportion of renewable energy would have to remain at 7.5% -- and then the provision would disappear or "sunset." Clinton's proposal includes a $0.015/kWh credit for generating renewables that could be traded amongst generators, but the price would be capped and could not rise. The Clinton RPS would increase electricity prices by $500 million in 2010 and $200 million by 2020.

The report does not consider broader environmental costs of fossil fuels nor does it consider the $0.015/kWh Production Tax Credit (PTC), which was reinstated in late December and which covers projects installed until the end of 2002. The American Wind Energy Association backs an RPS proposed by US Senator Jim Jeffords of Vermont that would mandate 10% renewables by 2010.

In the report, the EIA projected three different scenarios until 2020. With an RPS with no sunset provision and no cap, but which sets the same targets for the proportion of renewables by the same date, almost 45,000 MW of new renewable projects would be built compared with the amount built without an RPS. About 9000 MW would be biomass and 5000 MW would be new geothermal, while wind power would provide 30,000 MW. The finding that Clinton's RPS would not promote enough new renewables to meet its own goals has been found in previous studies by the Union of Concerned Scientists and by the DOE.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus

Windpower Monthly Events

Latest Jobs