WindEnergy Business 2009 Conference February 24, 2009, Chicago Hans Detweiler Manager of State t Legislation and Policy, American Wind Energy Association
Overview I. Status of the Wind Industry in America today II. Federal Legislative Agenda 1) Stimulus Legislation 2) Energy Legislation / RES and Transmission 3) Climate Change Legislation
Status of Wind Industry in America
Wind Energy is High Growth In 2007: 5,244 MW added d Over 16 GW cumulative total About $10 billion in new investments Enough power for over 1.5 million households in just one year We thought that was good until 2008
Wind Energy is High Growth In 2008: 8,358 MW added Over 25 GW cumulative total About $17 billion in new investments Enough power for over 2 million households in just one year 50% growth in total capacity in one year Over 13,000 new manufacturing jobs created in one year 85,000 jobs in wind industry nationwide today
New Capacity by Source 100% Other Dual-Fired 80% Natural Gas Petroleum 60% Coal Geothermal 40% Wind 20% 0% 2002 2003 2004 2005 2006 2007 **2008: 42% of new capacity
Historic American Policy: Federal PTC + State RPS Requirements = Wind Market *WA: 15% by 2020 OR: 25% by 2025 (large utilities) 5% - 10% by 2025 (smaller utilities) *NV: 20% by 2015 ND: 10% by 2015 MT: 15% by 2015 MN: 25% by 2025 (Xcel: 30% by 2020) IA: 105 MW VT: RE meets load growth by 2012 WI: requirement varies by utility; 10% by 2015 goal ME: 30% by 2000 10% by 2017 - new RE NH: 23.8% in 2025 MA: 4% by 2009 + 1% annual increase RI: 16% by 2020 CT: 23% by 2020 NY: 24% by 2013 CA: 20% by 2010 AZ: 15% by 2025 NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) CO: 20% by 2020 (IOUs) *10% by 2020 (co-ops & large munis) IL: 25% by 2025 MO: 15% by 2021 NC: 12.5% by 2021 (IOUs) 10% by 2018 (co-ops & munis) NJ: 22.5% by 2021 PA: 18%¹ by 2020 MD: 9.5% in 2022 *DE: 20% by 2019 DC: 11% by 2022 *VA: 12% by 2022 HI: 20% by 2020 TX: 5,880 MW by 2015 State RPS State Goal Solar water heating eligible
Federal legislation l
Conveying the wind agenda to the new Administration and the new Congress
The Wind Industry National Legislative Agenda: Immediate Action: Restructure PTC to work in adverse economy Short-Term incentive (next 5 years): Multi-year PTC Extension Mid-Term incentives (3-15 years): National RES Transmission Legislation Long-Term incentives(2025 and beyond): Effective Carbon Regulation
Multi-Track Calendar for 2009 Action to Repair Tax Incentives es and secure e multi-year extension as part of Stimulus bill. Completed, February 2009! Energy Legislation in winter/spring 2009 (a climate down payment ): National RES Transmission Legislation (if possible) Cap and Trade Legislation (could be packaged with energy legislation or could come much later) Carbon regulation Longer term production incentive Any RES and Transmission items not yet acted on
Federal legislative Issues: Economic Recovery Legislation
Highlights of Stimulus 3-year PTC extension (through 2012) Temporary ability to elect 30% ITC, or Treasury grant of same value, instead of PTC for projects entering construction by December 31, 2010 30% Manufacturing Tax Credit Extension of bonus depreciation Targeted provisions o s for transmission ss $8 Billion Loan guarantee program Removal of $4000 cap on small wind ITC $1.25 Billion for RD+D for EERE $500M for workforce training
Manufacturing Tax Credit New 30% credit for investment in qualified property used in a qualified advanced d energy manufacturing project. Qualified project: re-equips, expands, or establishes a manufacturing facility for the production of property designed to be used to produce energy from the sun, wind, or geothermal deposits, among other categories. Credits that can be allocated limited to $2.3 billion. Credits are available only for project certified by the Treasury Secretary in consultation with the Secretary of Energy through a competitive bidding process. An applicant can do so up-front and will have three years from the date of issuance of certification in order to place a project in service
Transmission in the Stimulus $3.25 billion in additional bonding authority for the Bonneville Power Administration i ti $3.25 billion in bonding authority for the Western Area Power Administration for transmission that facilitates or delivers ers power by renewable energy resourcesrces $4.5 billion for DOE s Electricity Delivery and Energy Reliability program $100 million of this funding would be used for worker training. DOE, in coordination with FERC, is also directed to provide technical assistance for the development of interconnection-wide transmission plans for the Eastern and Western Interconnections and ERCOT.
Federal Legislative Issues: Renewable Electricity it Standard
RES Status Senate Discussion i draft sets 20% standard d by 2021, starting at 4% in 2011 (allows 25% of target to be met through efficiency improvements) House Rep. Markey (D-MA) introduced 25% standard by 2025, starting at 6% in 2012 (H.R. 890)
AWEA s RES Objectives Goal of 25% by 2025 (Obama, Markey) Still supportive of Bingaman (Senate) effort Near-term target is key Obama at 10% in 2012, Markey at 6% in 2012 Bingaman draft at 4% in 2011 (3% renewables), or 8% in 2013 (6% renewables) Alternative compliance payment must be set high enough to spur renewable project development Markey: 5 cents/kwh Bingaman: 3 cents/kwh Note long term PTC uncertainty State must retain rights to impose higher standards
Cumulative Additional Wind Installed Under RES Scenarios 225 Existing State RPS Wind Capa acity (GW) Additonal 200 175 150 125 100 75 50 25 0 20% RES by 2021 with 5% EE(Bingaman) 25% RES by 2025 (Markey) 25% RES by 2025 (Obama v) 20% Wind Scenario 2010 2012 2014 2016 2018 2020 2022 2024
Federal Legislative Issues Transmission
Transmission Agenda Transmission proposals being developed in House (Inslee) and Senate (Reid, Dorgan, Bingaman) Interconnection-wide planning Allocating costs broadly Consolidated certification and siting authority Working with coalition through the Energy Future Coalition to advance comprehensive transmission proposal AWEA prioritizing outreach to Governors and state regulators regarding g multiple benefits to consumers, for reliability, and for expanded economic development opportunities for renewable energy
Federal Legislative e Issues Climate Change
Status of Climate Change Legislation President Obama proposed p cap-and-trade plan Chairman Waxman (House) plans to move cap-andtrade climate/energy legislation out of committee by Memorial Day. (May combine climate with RES) Speaker Pelosi has promised a floor vote this year Chairman Boxer (Senate) committed to moving cap-and- trade bill out of committee by the end of the year Multiple Senate Committees involved, adds to complication
Thank You Hans Detweiler Hans Detweiler hdetweiler@awea.org