Documents filed under Taxes & Subsidies
Pace Global Energy Services, LLC (“Pace”) was commissioned by Delmarva Power and Light (“Delmarva”) to independently assess the economic impacts of the proposed Bluewater Wind off-shore wind farm (the “BWW Project”) on Delmarva’s Standard Offer Service (“SOS”) customers. The review undertaken by Pace was based solely on publicly-available information and data sources. The report can be downloaded by clicking on the below link.
The Internal Revenue Service has published a revenue procedure establishing a safe harbor with respect to allocation of production tax credits from wind energy facilities. Section 45 of the Internal Revenue Code (IRC) provides for a renewable electricity production credit for each kilowatt hour of electricity produced by the taxpayer from a qualified energy resource, including wind, at a qualified facility and sold to an unrelated person during the taxable year. The credit continues for 10 years from the time the facility was originally placed in service. Wind energy projects frequently are owned and operated by LLCs formed between a wind developer and one or more investors interested in earning returns from operating cash flow and IRC ? 45 credits from the project. The IRS previously had announced that it would no longer rule on any issues for partnerships (LLCs generally are treated as partnerships for federal tax purposes) claiming the IRC ? 45 production tax credit.
The Independent Energy Producers of Maine (IEPM) commissioned the Brattle Group to prepare an analysis on retail rate trends and on the economics of utility cost-based generation in Maine. Brattle Group’s white paper was submitted to Maine Public Utilities Commission in regard to Docket 2007-317, an inquiry on reentry of electric utilities into the energy supply business. Appendix A of the paper details the "Economics of wind power in Maine".
On Jun 12, MA DOER granted Hydro Quebec approval for 108MW of wind to be eligible for the MA Rec market. There is an additional 212MW of wind that is already operating and may soon follow. DOER's decision is attached. A number of folks familiar with the New England REC market believe this decision, to be followed by others, will seriously depress REC values.
This brief paper reviews and evaluates key aspects of energy policies and plans announced by New York State officials, and contrasts their electricity plans with those of the New York Independent System Operator (NYISO) which is responsible for the reliability of New York's electricity grid. Both sets of plans have major implications for the people of New York.
DOE released its first Annual Report on U.S. Wind Power Installation, Cost, and Performance Trends: 2006 on May 31st, providing an overview of developments and trends in the U.S. wind power market. The report analyzes trends in the marketplace, including wind power prices compared to wholesale electricity prices, project costs, turbine sizes, and developer consolidation. It also describes the increasing performance of wind projects, current ownership and financing structures, and trends among major wind power purchasers. The report notes that U.S. wind power capacity increased by 27 percent in 2006 and that the United States had the fastest-growing wind power capacity in the world in 2005 and 2006. For the second straight year, the United States led the world by installing 2,454 megawatts of wind power capacity in 2006—16 percent of the capacity installed worldwide that year—followed by Germany, India, Spain, and China. Leading the way in annual growth capacity in the United States are Texas, Washington, and California.
The work described in this report was funded by the Office of Electricity Delivery and Energy Reliability (Permitting, Siting and Analysis Division) and the Office of Energy Efficiency and Renewable Energy (Wind & Hydropower Technologies Program) of the U.S. Department of Energy under Contract No. DE-AC02-05CH11231. The authors are solely responsible for any omissions or errors contained herein.
Rube Goldberg would admire the utter purity of the pretensions of wind technology in pursuit of a safer modern world, claiming to be saving the environment while wreaking havoc upon it. But even he might be astonished by the spin of wind industry spokesmen. Consider the comments made by the American Wind Industry Association.s Christina Real de Azua in the wake of the virtual nonperformance of California.s more than 13,000 wind turbines in mitigating the electricity crisis precipitated by last July.s .heat storm.. .You really don.t count on wind energy as capacity,. she said. .It is different from other technologies because it can.t be dispatched.. (84) The press reported her comments solemnly without question, without even a risible chortle. Because they perceive time to be running out on fossil fuels, and the lure of non-polluting wind power is so seductive, otherwise sensible people are promoting it at any cost, without investigating potential negative consequences-- and with no apparent knowledge of even recent environmental history or grid operations. Eventually, the pedal of wishful thinking and political demagoguery will meet the renitent metal of reality in the form of the Second Law of Thermodynamics (85) and public resistance, as it has in Denmark and Germany. Ironically, support for industrial wind energy because of a desire for reductions in fossil-fueled power and their polluting emissions leads ineluctably to nuclear power, particularly under pressure of relentlessly increasing demand for reliable electricity. Environmentalists who demand dependable power generation at minimum environmental risk should take care about what they wish for, more aware that, with Rube Goldberg machines, the desired outcome is unlikely to be achieved. Subsidies given to industrial wind technology divert resources that could otherwise support effective measures, while uninformed rhetoric on its behalf distracts from the discourse.and political action-- necessary for achieving more enlightened policy.
Today, we adopt an interim greenhouse gas (GHG) emissions performance standard for new long-term financial commitments to baseload generation undertaken by all load-serving entities (LSEs), consistent with the requirements and definitions of Senate Bill (SB) 1368 (Stats. 2006, ch. 598).2 Our adopted emissions performance standard or “EPS” is intended to serve as a near-term bridge until an enforceable load-based GHG emissions limit is established and in operation.......Under SB 1368, the EPS applies to “baseload generation,” but the requirement to comply with it is triggered only if there is a “long-term financial commitment” by an LSE. The statute defines baseload generation as “electricity generation from a powerplant that is designed and intended to provide electricity at an annualized plant capacity factor of at least 60%..........Pursuant to SB 1368, the performance level of the EPS must be “no higher” than the emissions rate of a CCGT powerplant.11 However, the statute does not specify the emissions rate for a CCGT. Based on our review of emissions rates associated with a broad range of CCGT powerplants of varying vintages, we adopt an EPS emissions rate of 1,000 pounds of carbon dioxide (CO2) per megawatt-hour (MWh).Editor's Note: This provides interesting insight into the rationale behind establishing 1,000 pds of CO2/MWh as an Emissions Performance Standard (EPS) for baseload generation. Please note that in Figure 1 "Net Emissions Comparison Data' the net emissions accorded 'wind electricity' should have been accorded to 'solar thermal with Gas Assist'.
Editor's Note: The following are selected excerpts from the Renewable Energy Foundation press release describing this research. The full press release is available via the link below. Using the new research it is now possible to assess how renewable generators up and down the country are performing. This data, published in five online files; Biomass, Hydro, Landfill Gas, Sewage Gas and Windpower, shows that firm generators are producing high load factors with carefully designed resource use and load following. However in the wind sector, far and away the most active of all the technologies at present, results vary enormously due to location. The capacities offshore are encouraging, whilst those onshore are generally only superior in locations very distant from the populations requiring the electrical energy. Although most sites were built on expected capacity factors of around 30%, results include; 19% (approx) capacity factor for the wind turbines at Dagenham, Essex. 9% (approx) capacity factor at the Barnard Castle plant, County Durham. The best performing wind sites are in the north of Scotland, and on Shetland the wind turbines are producing capacity factors of over 50%. Using this analysis of the Ofgem data, researchers have also calibrated a model predicting how a large installed capacity of wind power built across the UK would actually perform. The project used Meteorological Office data to model output for every hour of every January from 1994-2006. The startling results show that, even when distributed UK wide, the output is still highly volatile. The average January power variation over the last 12 years is 94% of installed capacity. It is an uncontrolled variation decided by the weather. The average minimum output is only 3.7% or 0.9GW in a 25GW system. Power swings of 70% in 30 hours are the norm in January. The governments’ expectation is that three quarters of the 2010 renewables target, and the lion’s share of the ‘20% by 2020’ target will be made up of windpower. However, the new research offers predictions which are in keeping with Danish and German empirical experience and demonstrate the need for a broader spread of investment in the renewable sector. The report was commissioned from Oswald Consultancy Limited and funded by donation from the green entrepreneur Vincent Tchenguiz. Campbell Dunford, CEO of REF, said: “This important modelling exercise shows that even with best efforts a large wind carpet in the UK would have a low capacity credit, and be a real handful to manage. This isn’t the best way to encourage China and India to move towards the low-carbon economy. As a matter of urgency, for the planet’s sake, we need to bring forward a much broader range of low carbon generating technologies, including the full sweep of renewables. Wind has a place, but it must not be allowed to squeeze out other technologies that have more to offer.”
This paper: • Lists key reasons why political leaders and regulators are facing problems when attempting to deal with wind energy. • Provides more information on the effort in Kansas to evaluate wind energy. • Identifies facts about wind energy that are often not taken into account by political leaders and regulators. • Comments on the efforts in Kansas to promote greater use of wind energy. • Outlines lessons for all government officials that can be learned from the efforts in Kansas.
This is a comprehensive, well documented and thoughtful presentation on a wide range of industrial wind issues by Dan Boone, Consulting Conservation Biologist, at the public meeting held by Save Our Allegheny Ridges in Bedford, PA on September 18, 2006
Q. Please state your name and position. A. My name is Charles Simmons and I have been retained to provide assistance to Highland Citizens in regard to the application of Highland New Wind Development, LLC to construct a wind generation facility in Highland County. Editor's Note:This testimony provides an excellent description of how a grid works- particularly the role of 'economic dispatch' and 'spinning reserves'. It also addresses the methodology for estimating emissions savings and numerous other topics of interest.
Because time seems to be running out on fossil fuels and the lure of non-polluting windpower is so seductive, some people are now promoting windpower initiatives at any cost, without investigating potential negative consequences-- and with no apparent knowledge of even recent environmental history......Throughout my experience, I could not substantiate a single claim developers made for industrial wind energy, including the one justifying its existence: that massive wind installations would meaningfully reduce our reliance on fossil fuels. When you understand this, you realize the wind business is not really that complex. But there are a lot of complicated issues swirling around it that obscure and distract from this main point, issues such as global warming, property values, the nature of wind leases, local revenues and taxes, wildlife, natural views, and a host of others. So how does one know the truth of it all? How does one go about separating the reality from spin?
This report examines the factors underlying the recent increases in electricity prices and the potential impact of these factors on the industry's financial condition. It focuses primarily on cost changes experienced over the past five years and the projected trends in these costs over the next ten years.
In November 2001, Cape Wind Associates, filed an application with the U.S. Army Corps of Engineers for permission to construct the nation’s first offshore wind farm in Nantucket Sound. The project would consist of 130 wind turbines, each approximately 420 feet tall, arrayed over a 24 square mile area of the Sound known as Horseshoe Shoals. The wind farm would be sited five miles off the coast, in federal Outer Continental Shelf (OCS) waters. From there, undersea cables would transmit power through state waters to an onshore distribution grid. The project, according to Cape Wind, would have an installed nameplate capacity of approximately 468 megawatts (MW) of electricity.
National Wind Watch does not oppose funding of research and development for wind energy, but stresses that any increases in monies allocated be correctly focused. Most of any future research and development should now be focused on the detrimental impacts and mitigation techniques of wind development including, but not limited to: actual impacts on property values in areas where wind development occurs; actual net impacts on employment; life cycle analysis of environmental impacts (positive and negative); grid system stability and reliability under increasing penetration of wind, and within lower quality wind sites. Given the inherent and perceived conflict of interest, National Wind Watch recommends that the National Renewable Energy Laboratory NOT hold responsibility for such analysis but only be permitted to participate.