Wind energy rapidly expanding
Wind energy is now a mainstream source of energy, and the industry proved that last year by being the number one source of new electric generating capacity in America. More than 40 percent of the new U.S. energy generation came from wind, Peter Kelley, vice president for public affairs at the American Wind Energy Association, told Monica Trauzzi during a recent edition of the OnPoint video program.
“That's way ahead of natural gas and coal and all the other sources. So, it was our strongest year ever. We've experienced remarkable growth with 28 percent more wind energy at the end of the year than we had when we started in America. So, that's been a huge boon to the industry. And yet we're still confronted with this uncertain policy landscape that has the companies trying to figure out what the rules are going to be in the future,” Kelley said.
Kelley said the goal is for 20 percent of the electric grid to be supplied by wind energy, and at the moment the industry is ahead of schedule to meet the goal. He also said utilities are continuing to put out more requests for wind energy proposals using existing government policy benefits.
The future of support for wind energy is highly unsettled because of Congress needing to deal with tax reform and working on an energy bill. “We’re just using the existing policy to build as many wind farms as we can, and get to start them by the end of the year. That’s the important thing about this year’s policy,” said Kelley.
“Over time we've reduced the cost of wind energy tremendously. It's come down 90 percent since 1990. And we believe that with a couple of more product development cycles of two to three years, we can be even more cost competitive, because advances are still being made. But this is a mature technology, it's now one of the lowest cost forms of energy in America, with such things as taller turbines that reach higher wind speeds. We're opening up new areas to development. And very, very competitive contracts are now being signed for wind power this year,” Kelley contended.
With his positive statements about establishing wind farms, it is natural that some competitive energy industries and some of the public might suggest too much in government tax credits are supporting wind energy.
Kelley countered by saying, “I think all forms of energy have always been heavily incentivized, heavily regulated in this country for up to 100 years. And that's because we want predictable, low-cost energy in America. It benefits our economy; it saves consumers money, and that's why energy is frankly so affordable in America. It's because of these policies and incentives. So why should wind energy be the only form of energy to lose its incentive this year? I think basically we should look at them all. And meanwhile, our energy policy in this country really is in the tax code, and it makes sense to continue what's working.”
The big value to the wind industry comes in a production tax credit or the alternative investment tax credit. Investment is needed to create infrastructure and create a new form of low cost energy for America, and it's important to have some incentive to drive the investment which totaled $25 billion in private investment last year, Kelley said. All that private investment needs to have a signal, reason to continue to enter the market.
Infrastructure is a major need because transmission bottlenecks are keeping the low-cost energy from reaching the market in some cases. Parts of the country have wind energy that could be sold across state lines but new transmission lines are needed. But, Kelley contends that we've always had the need for more transmission in this country, but meeting the need for transmission lines has occurred in the past as other forms of electrical generating has come along. Defining how to share the costs of new transmission lines equitably is a work in progress.
According to Kelley, “I think the progress is being made. It's not the case that this is a huge challenge but rather something we need to chip away at and we're making progress on.”
Kelley and his association make the point that support for wind energy makes more sense than other forms. Support is needed for “installation of as much wind energy as we can, as fast as we can, to meet the need for low carbon and low pollution energy, to create energy that will never run out, to insulate against price shocks in the future and to save water.” No water is used in any aspect of energy production; therefore, it is a great system for water short states.
Kelley’s last point was that research in new technology will keep lowering costs. “There's still technology out there that can bring down the cost further by being developed.”