Wind, as yet, cannot compete in an electricity market geared towards low cost rather than environmental protection. It can produce power as cheaply as that from coal, but it cannot provide capacity credit at the same price. So close, however, is wind to being competitive that the $0.017/kWh Production Tax Credit -- a modest incentive compared with the government's routine support for fossils and nuclear -- was enough to make all the difference. Its demise in seven month's time (page 20) is a crushing blow for an industry which most Americans want to see supported. If a wind developer is not now within two months of starting project construction, he's out of luck.
So crucial is the incentive, that the American Wind Energy Association (AWEA) had even made a quiet but major concession several months ago to quell the opposition of the huge utility Southern California Edison. The version now supported by both the wind industry and California's two largest utilities for the next round of budget lobbying is essentially a tax credit that will never benefit most of the scheduled repowering of old wind projects. As AWEA has conceded to its corporate members, the concession could well mean that hundreds of megawatt of wind capacity in California is not going to be repowered anytime soon.
Even that concession did not stop the PTC falling victim to election-year budget gridlock. AWEA had managed to ensure the support of the White House, the US Senate, and as many as 93 co-sponsors in the House, but to no avail. The effort was blocked by the chairman of the powerful tax-writing House Ways and Means Committee, Representative Bill Archer -- a Texan who has oil interests at heart and who essentially prevented the issue becoming the subject of a vote.
Talking of oil and its entrenched interests, the World Energy Congress (WEC) in Houston (page 34) was a showcase for oil, gas and to a lesser degree coal and nuclear -- even though its theme was sustainable development, a nod to concerns about the millennium and global warming. After much hard work, wind made a respectable showing on the exhibit floor, but the overall event was astonishingly conventional -- and narrow to the point of stupidity -- in its outlook. Nuclear power was frequently praised as a safe way of combating greenhouse gases for our children and grandchildren and successfully grabbed much of the clean energy limelight. The perception of wind power, however, seemed a decade out of date. Its perceived cost and dispatchibility problems were emphasised in a way that might have seemed current in the late 1980s or perhaps the early 1990s.
Wind made news in the general media covering the event and on the exhibit floor, but the recommendations of the august body were startlingly ignorant. WEC told the world that nuclear should play a major role in the solution to "possible" global warming, while renewables were given no more than a bit part as a potential means of supplying commercial energy to people without previous access to energy sources. The fact that in some developed countries wind is close to supplying 10% of the electricity demand -- and that there are serious goals for it to meet 50% of grid supply in Denmark -- was totally ignored by WEC.
If being green weren't hard enough in Washington and Houston, a major furore has started in California over a report which describes the concept of green pricing a hoax that does little for consumers, renewable energy, or the environment. " Green Buyers Beware," by Public Citizen, a group founded by consumer activist Ralph Nader, argues convincingly, at least in the executive summary, that the popular marketing device encourages utilities to resell renewable electricity already in the rate base, charging a premium for it in the process. Furthermore, green marketers are encouraged to paint dirty power green -- and in the end the fuel mix may become even more polluting and more dangerous overall. The report was issued on October 22 on the eve on California's public vote to roll back much of electricity deregulation (page 31).
Angry reaction was immediate from the green marketers themselves and from those such as the Natural Resources Defence Council who see green marketing as holding the best future for renewables. They say green pricing has spurred more growth in renewables than at any time in a decade. Of the 70,000 households in California that have opted to buy from someone other than their conventional utility since the state's deregulation, about half have gone for green power. AWEA, while taking no position on what it described as a "California matter," is more circumspect about attacking green marketing in its infancy.
The need for a stable federal policy for renewables has never been more glaringly obvious. Remove market uncertainty and the US wind industry will flourish, creating jobs, wealth and a cleaner environment for all of us -- one that even Kermit would be more than happy to be green in.
