Forces Driving Wind Power
Development
Pat Walsh
UW-Madison/Extension
Focus on Energy Program
Drivers for Wind Power
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Fuel Price Uncertainty
Energy Security
Federal and State
Policies
Economic
Development
Green Power
Declining Wind Costs
US Escalating Energy Use
CHINA
RECENT ENERGY FACTS
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China accounts for at least 40% of the growth
in global oil demand.
In 2004 China will use 830,000 barrels a day
more than last year which is about a third of
world demand growth, which may soon be fifty
percent.
Chinese energy consumption will more than
double in the next twenty years.
Source: US Energy Information Administration
Energy Security Issues Are
Growing
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Three quarters of the world’s known
petroleum reserves are in the Middle
East
Most of these are in three countries
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Saudi Arabia
Iran
Iraq
Natural Gas
Source: Community Office of
Resource Efficiency
Natural Gas Price Volatility
Carbon Growth Highest in
Developing Countries
Emissions Growth
GT/yr
(1990-2020)
Annual Carbon Emissions
GT
4
10
Industrialized
25%
Industrialized
8
Res/Comm
4%
Industrial
22%
3
0.8%
Transport
27%
0.7%
6
2
1.2%
4
Developing
75%
2.4%
Ind.
2.3%
2
Developing
2.2%
Dev.
0
Developing 1990
50%
Share
1
2000
52
2010
56
2020
60
0
Economies
Sectors
Power
Generation
47%
Shrinking Polar Ice
Extent of Arctic summer ice in
1979 (top satellite image) and in
2003 (lower satellite image).
NASA photograph
The Energy Policy Act of 2005
Public Law 109-58
Renewable Depreciation
Deductions
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Businesses can recover investments in
solar, wind and geothermal property
through depreciation deductions under
the Modified Accelerated Cost-Recovery
System (MACRS)
For solar, wind and geothermal
property placed in service after 1986,
the terms are five years.
Renewable Electricity Production
Tax Credit
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Provides a business tax credit of 1.5
cents/kWh, adjusted annually for inflation, for
electricity generated by wind, closed-loop
biomass and geothermal (1.9 cents/kWh
adjusted for 2005)
Electricity generated from open-loop biomass,
small irrigation hydroelectric, landfill gas,
municipal solid waste resources and
hydropower receive half that rate (currently
0.9 cents/kWh).
Available through December 31, 2007 for
Renewable Energy Production
Incentive
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New qualifying renewable energy generation facilities
eligible for annual incentive payments of 1.5
cents/kWh for the first 10 years of operation.
Qualifying facilities must use
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Solar
Wind
Geothermal
Biomass
Landfill gas
Livestock refuse
Ocean generation technologies (tidal, wave, current and
thermal)
Fuel cells using hydrogen derived from eligible biomass
facilities
2005 Wisconsin Act 141
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Renewable Portfolio Standard- requires
utilities to generate 10% of their power
from renewable energy by 2015
Requires state government to use
renewable energy
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10% by 2007
20% by 2012
Wind Cost of Energy
COE (¢/kWh [constant 2000 $])
12
10
8
Low wind speed sites
6
Bulk Power Competitive
Price Band
High wind
speed sites
4
2
0
1990
1995
2000
2005
2010
2015
2020
Growth of Wind Energy
Capacity Worldwide
Actual
45000
40000
35000
Projected
Jan 2003 Cumulative MW
Rest of World
Rest of World
Rest of World = 2,803
North America
North America
North America = 5,018
Europe
Europe
Europe
= 21,319
30000
25000
20000
15000
10000
5000
0
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
Year
Sources: BTM Consult Aps, March 2001
Windpower Monthly, January 2003
Wisconsin Wind Profile
Conclusion
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Many forces driving wind development
Some areas of Northwest Wisconsin
may be a good places for wind
development
Now is a good time for communities
and citizens to learn about this
technology