The American Wind Energy Association (AWEA) is in Chicago this week, hosting its largest conference ever. Over 20,000 people are filling the McCormick Place Convention Center, representing a 60% growth from last year’s attendance. And they are sending a clear message too: we need to ensure continued US wind power leadership by passing a federal Renewable Electricity Standard (RES).
Upscaling a Successful State Policy
For years now, Renewable Electricity Portfolio Standards (most often abbreviated RPS) have helped develop strong markets for wind, solar and other renewable power. As I discussed yesterday, these standards vary according to each state’s renewable resource from 12.5% to 45% by 2015-2020. RPS policy was critical to the development of the tremendous wind market in Texas and the solar markets of California and New Jersey. At the press conference held this morning, panelists from AWEA Executive Director Denise Bode to GE Energy’s VP of Renewables Vic Abate all called for federal leaders to set an RES that would ensure US leadership in renewable innovation: 25% by 2025.
EIA Report Shows RES Lowers Electricity Prices in Resource-Rich Regions
Panelist Don Furman, AWEA President and a leader at Iberdrola, called the opposition of a RES ill-informed. The opposition often says a national RES will raise energy prices. He cited a recent US Energy Information Administration (EIA) report that shows prices of natural gas would actually decrease due to the lower demand for the fuel. The report also projects electricity prices falling in many regions, with only slight increases elsewhere.
Michael Polsky, CEO of wind developer Invenergy, went further, saying the opposition has little credibility. Polsky gave a historical view of such opposition, declaring they used to allege renewables don’t work. With wind at more than 25 GW, they now admit it works. But they shifted their message to its too expensive. But wind turbine prices are already competitive with conventional sources, especially once pollutants such as carbon dioxide are taken into account.
Wind Power Costs
In fact, wind power is approaching $1.50 per watt and could fall toward $1 per watt if the industry has policy support to further mature and increase its efficiency. White-hot global demand for turbines since 2005 and the rise in the price of steel sent prices up a bit the past three years (similar to solar prices). But now costs are falling again and supply seems to have caught up with demand.
Future US Market Could Be 15-20 GW
GE’s Abate and enXco’s Jim Walker see the US market continuing to buildout in 2010 after a slowdown in 2009. In fact, they see market growth to 15-20 GW per year within a few years, as long as supportive federal policy continues. If they are right, we may be able to surpass China’s recent 2020 wind goal of 100 GW.
Such a market would translate into hundreds of thousands of clean energy jobs manufacturing, deploying, and operating turbines. AWEA’s Bode sees wind powering the American economy forward to recovery.
Bottom line: Significant momentum remains for renewable energy, especially cost-competitive wind power, to grow tremendously in the years ahead despite a recession-induced slowdown in 2009. The wind industry appreciates the federal government backing that enabled outstanding growth over the past few years. And they see this year as the perfect opportunity to set in motion a steady, long-term support to achieve energy security through a federal RES.
Onwards in the Sustainable Energy Transition-
Tags: China, climate change, global warming, green jobs, renewable electricity standard, RES, Solar, US, wind energy, windpower
Whats the rationale for saying renewable energy production will increase prices in certain regions, out of curiosity? I was under the impression that energy is cheaper currently in areas of the country that use a lot of hydroelectric, for example.
Great question, Sean-
You’re right that hydro-dominated ID, WA, and OR have low electricity prices, at 5.07, 6.4, and 7.02 cents per kWh, respectively. But people who oppose a standard that 25% of electricity come from renewables are focused on the low price of electricity in coal-dominated states like WY and WV, 5.29 and 5.34 cents per kWh, respectively (coal produces 80+% of those states’ electricity mix and their low costs are also because they are the two largest producers of coal – as a non-producing coal state, NC has higher coal prices). But part of the reason the price of coal electricity is so low is because some of the costs (such as carbon dioxide and mercury pollution-induced public health effects) are externalized to society (=not taken into account). So coal electricity looks cheaper on the accounting sheet than it really is to society.
Is it possible WY and WV have slightly higher electricity prices in the future? Yes, but since WY has vast wind potential their prices are destined to stay very low. WV won’t rival NY’s 15 cents per kWh but may have slightly higher electricity prices.
The exciting thing is that as wind, solar and other renewables take electricity market share, they lower the demand for fossil fuels. This lower demand for fossil fuels means lower prices for the fuels and a longer-lasting supply for generations to come. As I wrote last week, it may make sense for some states like Kansas to export renewable electricity to other states with less potential (similar to the way coal is delivered today) within their grid to help keep costs down.
Here’s hoping solar and wind continue to fall in price so that the cost argument loses its luster as an excuse for status quo-lovers-
Dennis