Wind power, demand-side management and a national transmission grid are critical to the nation’s electricity generation, particularly the development of new infrastructure, energy efficiency and easing transmission gridlock, energy experts say.
“The capacity of wind technology is going up while the costs have gone down,” said Marguerite Kelly, senior project manager of National Renewable Energy Laboratory.
In his 2006 State of the Union, President George W. Bush said 20 percent of energy in the United States can be generated from wind energy. According to Kelly, this will not occur under “business as usual circumstances.”
She outlined the drivers of wind energy in today’s volatile energy markets—energy security, economic development benefits and the declining cost of taller and lighter blades that can capture smoother and stronger winds at higher elevations. Wind energy has costly upfront investments, but no fuel costs to produce the energy. Furthermore, “wind energy is a hedge bet against current fuel price uncertainty,” Kelly said.
States and cities can reap the economic benefits of a growing wind energy industry including increased property tax and landowner revenue and construction and manufacturing projects, she said. The U.S. could do more to foster wind technology, she explained. Currently, most wind turbines are produced overseas making them costly while the dollar is weak.
While utilities have been grappling with wind energy and renewable portfolio standards, another policy approach to increased electricity use and demand involves energy efficiency.
“Energy efficiency is the cheapest, most effective way of addressing climate change,” said Rich Sedano, principal with the Regulatory Assistance Project.
The U.S. Department of Energy announced a National Action Plan for Energy Efficiency. The goal is to create a sustainable, aggressive national commitment to energy efficiency through gas and electric utilities, utility regulators and partner organizations.
Action plan recommendations include recognizing energy efficiency as a high priority resource, educating the public about benefits, providing program funding for utilities engaged in efficiency measures and modifying rate-making to promote energy efficient investments.
The integration of energy efficiency into resource planning is critical because it has a value as a resource, Sedano said. He asked how much energy efficiency would be needed to alleviate the need for a new transmission line. In order for states to answer these questions, policymakers must consider prioritizing energy efficiency in state statutes, provide consistent incentives to energy providers, establish performance expectations and open new rate designs.
While energy efficiency will relieve some burden on electricity transmission lines, the infrastructure of transmission lines is crumbling and investment is lagging. Networks are operating close to or at the limit, according to Bill Massey, partner with Covington & Burling LLP. Modern transmission lines are needed to link wind power and other forms of renewable energy to the grid.
As policymakers address these challenges, they are often faced with “not-in-my backyard” concerns from constituents.
Seamless transmission and electricity distribution is critical to reliability and lower prices. The Mid-Atlantic, in particular, has had severe grid congestion increasing electricity prices by $2 billion each year. The ability to redispatch power through bottlenecks will ultimately lower rates for consumers.
—Karen Imas
Many of the alternative energies being developed have high upfront costs. I haven't seen many companies try to address this issue besides ask for more incentives or credits from the government toward purchases. I'd like to see a company work toward make this energy affordable without the help of the government.
Posted by: Alex Stall | April 15, 2008 at 11:00 AM