New Studies on Acid Rain and Global Warming Underscore Need for more Wind Energy, Now

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For Immediate Release

New Studies on Acid Rain and Global Warming Underscore Need for more Wind Energy, Now

Investments in Clean Power Can Fight Health, Climate Threats

DISTRICT OF COLUMBIA, WASHINGTON, May. 2 -/E-Wire/-- Recent disclosures that acid rain is causing greater damage to the environment than previously thought and that human-induced greenhouse gas emissions are increasing ocean temperatures highlight the need for aggressive investments in wind power, the American Wind Energy Association (AWEA) said today.

"We are allowing some of our nation's ecosystems to be battered by acid rain, and contributing to global warming, while part of the solution lies close at hand," said AWEA Executive Director Randall Swisher. "Clean air standards can be improved and new power brought on line without delay, by tapping an abundant, affordable, clean energy source: the wind."

The acid rain report, undertaken by the Hubbard Brook Research Foundation and published in the journal BioScience (vol. 51, no.3, 2001), found that, while sulfur dioxide (SO2) emissions have been reduced since 1970, ecosystems are not recovering as expected from acid rain damage in sensitive areas of the Northeast. Emissions of SO2 from electricity generation need to be cut by an additional 80%, with cuts in emissions of nitrogen oxides (NOx) as well in order for affected streams and other ecosystems to come back within the next 20-25 years, according to the study. Ecosystem recovery was one of the goals of the 1990 Clean Air Act Amendments that set a cap on emissions of sulfur dioxide.

Two studies on climate change, published in the April issue of Science magazine and carried out by the National Oceanographic Data Center and by the Scripps Institution of Oceanography, found a direct link between rising ocean temperatures and emissions of greenhouse gases (carbon dioxide and other gases that can trap heat within the atmosphere). Sydney Levitus, the lead author of the National Oceanographic Data Center study, said he believes its results are the strongest evidence to date that the Earth's climate system is being altered by human activity. Carbon dioxide (CO2) from fossil fuel combustion is a leading greenhouse gas.

"The impact of electricity generation on these environmental problems can be reduced," said Swisher. "With wind power, we can substantially lower air pollution and carbon dioxide emissions without constraining power supplies. This year's record-breaking investments in wind farms demonstrate that the technology is ready to play an increasing role in the nation's energy portfolio."

About 1,500 megawatts (MW) of new wind energy generating capacity--a 60% increase for the industry--are expected to come on line in the U.S. in 2001, according to initial AWEA estimates. By year's end, wind farms will be generating 10 billion kilowatt-hours (kWh), enough to power one million average American households, without any emissions of pollutants or carbon dioxide. If that amount of electricity were produced by the average utility fuel mix, it would generate 40,000 tons of SO2 and 24,500 tons of NOx, the lead agents of acid rain and smog, and 7.5 million tons of CO2, a leading greenhouse gas. An area of 4,000 square miles of forest, larger than the states of Rhode Island and Delaware combined, would be needed to absorb that much CO2.

Aggressive steps to sustain the wind industry's high growth rate are in the nation's immediate economic as well as environmental benefit, Swisher said. A steep and steady increase in the use of wind power in the U.S. would help ease the pressure of soaring demand on the price of natural gas, the current fuel of preference for new electricity generation.

AWEA, formed in 1974, is the national trade association of the U.S. wind energy industry. The association's membership includes turbine manufacturers, wind project developers, utilities, academicians, and interested individuals. More information on wind energy is available at the AWEA web site: www.awea.org The following is relevant background information about wind energy in the U.S. and the world.

Growth of the Wind Energy Industry

- Total worldwide wind capacity today is approximately 17,000 MW, enough to generate about 34 billion kilowatt-hours of electricity each year. This is about the same amount of electricity as 5 million average California households (containing 12.5 million people) use.

- Wind energy was the world's fastest-growing energy source during most of the 1990s, expanding at annual rates ranging from 25% to 35%. In 2000, about 3,500 MW of new wind capacity (close to a $4 billion investment) was installed around the world, but only 53 MW of that total, or a little more than 1%, was installed in the U.S. However, AWEA expects as much as 2,000 MW of new wind capacity to be installed in the U.S. this year.

- Leading states in terms of installed wind capacity today are California (1,646 MW), Minnesota (272 MW), Iowa (242 MW), and Texas (188 MW).

- U.S. wind potential is enormous--many times the amount installed. California, for example, could conservatively install an estimated 5,000 MW of wind capacity. Other western states have much larger potential--e.g., Wyoming has more than 10 times California's. The U.S. is, quite literally, a "Saudi Arabia of wind," with vast resources throughout the Plains states.

Market Drivers Behind Wind Energy's Growth

(1) Federal government policy: The federal government provides a tax credit of 1.5 cents per kWh (adjusted for inflation) for electricity generated by a wind plant during its first 10 years of operation. This credit is intended to "level the playing field" for wind, which must compete with other energy industries that receive billions of dollars in federal subsidies each year. The wind energy credit will expire at the end of this year unless it is extended by Congress.

(2) State government policy: Several states, as part of electric utility restructuring legislation, have enacted policies to encourage clean energy sources like wind. The state of Texas, for example, has passed a law requiring the construction of 2,000 MW of new renewable energy generation by the year 2009, of which wind is expected to capture a major share. New wind projects of 160 MW, 208 MW, and 82.5 MW have been announced in Texas within the past few months.

(3) Declining costs: The cost of producing electricity from wind energy has declined by more than 80%, from about 38 cents per kilowatt-hour in the early 1980s to a current range of 3 to 6 cents/kWh (levelized over a plant's lifetime not including the federal wind energy Production Tax Credit (PTC)). However, the cost of electricity from a wind plant varies based on its size and the average wind speed. A large plant (50 MW and up) at an excellent site (20 mph average) can deliver power for 3 cents/kWh or less; electricity from a small plant (3 MW) at a moderate site (16 mph) may cost up to 8 cents/kWh. In the not-too-distant future, analysts believe, wind energy costs could fall even lower than most conventional energy sources, reaching an unsubsidized cost of 2.5 cents/kWh.

(4) The green power market: As the electricity market becomes more competitive, utilities and other power suppliers are looking for ways to differentiate their products. One of the best ways to do that is to offer "green power"--electricity from clean energy sources like wind--at a premium price. Today, over 190 utilities nationwide are selling wind-generated electricity as part of green power programs, and consumer demand for green power (even though still very small) is beginning to result in the building of new wind power projects, including some in southern California.

Clean Energy Policy Options

(1) Renewables Portfolio Standard (RPS): The RPS is a "minimum content requirement," which specifies that a certain minimum percentage of electric power must be generated from renewable energy sources (wind, solar, and others). Typically, RPS legislation provides that the minimum percentage increase gradually over time to encourage the sustained, orderly development of the renewable energy industries. Several states, including Texas, have enacted RPS laws, and the concept is also being considered by the U.S. Congress. More information on the RPS is available from http://www.awea.org/policy/index.html#RPS .

(2) Production Tax Credit (PTC): The U.S. government currently provides a tax credit of 1.5 cents per kilowatt-hour (adjusted for inflation) for all the electricity generated by a new wind plant during its first 10 years of operation. Under current law, the credit is scheduled to expire at the end of 2001. The American Wind Energy Association (AWEA) is seeking its extension for at least five years. More information on the PTC is available from http://www.awea.org/policy/index.html#PTC.

(3) Incentives for Small Wind Turbines: Tax incentives or rebates help make the purchase of a small wind turbine for household use more attractive to potential buyers. California currently provides a rebate of up to 50% of the purchase price of a small turbine, and that has helped to sharply increase demand for the units in the state.

(4) Disclosure of Energy Sources: AWEA also supports "disclosure" laws, which require sellers of electricity to inform customers of the sources of energy (coal, nuclear, natural gas, etc.) that are used to generate the electricity. Such information is important for consumers to be able to make intelligent choices in a competitive marketplace.

(5) Fair Transmission Policy: The nation's electricity transmission system operates based on rules that were designed to fit the characteristics of fossil fueled power plants. Congress should take appropriate steps (including guidance to the Federal Energy Regulatory Commission and the emerging Regional Transmission Organizations) to ensure that wind energy is not disadvantaged in the market simply because it is an intermittent power source.

Benefits of Wind Energy Development

Wind energy provides both environmental and economic benefits.

Windy counties profit from wind development through:

(1) Tax Payments: Every 100 MW of wind development generates about $1 million in property tax revenue. Development of another 2,000 MW of wind this year will mean $20 million annually in tax revenues to rural communities.

(2) Jobs: Every 100 MW of wind development creates about 500 job-years of employment. Installation of 2,000 MW will result in 10,000 job-years.

(3) Payments to landowners: The development of 2,000 MW in the U.S. will mean annual payments of approximately $4 million to farm and ranch landowners.

(4) Stable electricity prices: A recent study (January, 2000) found Iowa's electric utility customers could save over $300 million over a 25-year period if a proposal to meet 10% of the state's electric demand through wind energy is adopted. The savings result because the cost of fossil fuels is expected to rise over time, while wind's costs decline. Savings in California, where prices have skyrocketed because of supply constraints, would be enormous.

(5) Reduced emissions of pollution and greenhouse gases: A single 660-kW wind turbine will displace emissions of 1,100 tons of carbon dioxide (the leading greenhouse gas), 6 tons of sulfur dioxide (the leading component of acid rain), and 4 tons of nitrogen oxides (the leading component of smog) every year, based on the U.S. average utility fuel mix. 375 acres (more than half a square mile) of forest would be needed to absorb the same amount of CO2.

"Wind power can help fight pollution and global warming, while providing a low-cost solution to the current energy crisis,"--Randall Swisher, AWEA Executive Director.

American Wind & Energy

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