The wind energy industry employs about 3,000 people in Iowa and accounts for 20 percent of all electricity generated in the state, according to the Iowa Wind Energy Association.

Bruce Braley

“Investments in Iowa’s wind energy industry have created thousands of jobs and made Iowa a world leader in clean energy technology,” Braley said.  “Extending the renewable energy production tax credit will keep the economic momentum going. Wind energy is still a widely untapped resource in Iowa – and that means there’s still untapped potential for business investment and job creation.”

GOP candidates for president offered very different assessments of the tax credit during a forum Tuesday morning in Pella. The tax credit is due to expire at the end of 2012.

Texas Gov. Rick Perry, U.S. Rep. Michele Bachmann (R-Minn.) and former U.S. Sen. Rick Santorum (R-Penn.) called for ending the wind energy tax incentive.

But former U.S. House Speaker Newt Gingrich (R-Ga.) took a different tack, calling for long-term renewals of such programs.

Braley introduced similar legislation to extend the renewable energy production tax credit in 2008 and 2009.

“Wind energy is good for the economy, good for the environment, and good for farmers,” he said. “Our bipartisan bill will promote job-creating wind energy projects and provide incentives to expand wind energy production.”

The paper, “Effects of Climate Change on Wind Energy Availability,” is written by Diandong Ren at the University of Texas at Austin’s Department of Geological Sciences. In the abstract of the paper, Ren argues that countries must quickly increase their dependence on renewable energy in order to stem the effects of climate change on wind speeds.

Ren said in the paper:

Reduction of wind power scales with the degree of warming according to a generic power-law relationship. Thus, the earlier we switch to clean energy, and thereby decrease the global climate warming trend, the more cost-effective will be the harnessing of wind energy.

I’ve never heard anything about the effects of climate change on wind. Any scientists out there want to weigh in? Is this legitimate research? Have you read similar things before?

The numbers, reported by the American Wind Energy Association, indicate that the third quarter of 2010 was the worst since 2007 for the industry. In total this year, the industry has installed 1,634 megawatts of electric generating capacity, the lowest since 2006.

At the same time, the numbers show that coal outstripped wind in new installed capacity this year. According to an AWEA statement:

Data from the U.S. Energy Information Administration and other third-party sources show that wind accounted for 39 percent of new installed capacity in 2009, versus 13 percent from coal; in the first nine months of 2010, however, the ratio flipped, and wind accounted for only 14 percent, versus 39 percent from coal.

AWEA President Densie Bode called on Congress to pass a renewable energy standard, which would require that a certain percentage of the country’s electricity come from renewable sources like wind and solar. Though an RES has picked up a number of Republican supporters in the last month, it’s unclear when such a proposal will come up for a vote in the Senate.

Here’s an graph from the report that sums things up nicely:

The Internet giant is partnering with investment firm Good Energies to get the project off the ground. Good Energy is also expected to make a $200 million initial investment in the project, which is estimated to cost $5 billion, The New York Times reports.

Building a so-called “transmission backbone,” which would move electricity generated at offshore wind plants to those that need it, is considered essential to proving the viability of offshore wind, a technology that has yet to be built in the United States. The Interior Department signed a lease last week for Cape Wind, a proposed wind project off the coast of Massachusetts that many hope will be the first offshore wind project to be built in federal waters (as I’ve noted before, Texas, which operates outside of federal rules, is hoping to beat Cape Wind).

While many have praised the project, others warn that progress could get tangled up in regulatory delays. The Times reports:

Industry experts called the plan promising, but warned that as a first-of-a-kind effort, it was bound to face bureaucratic delays and could run into unforeseen challenges, from technology problems to cost overruns. While several undersea electrical cables exist off the Atlantic Coast already, none has ever picked up power from generators along the way.

In lane one you’ve got the federal government, which announced this week that it signed the first lease for an offshore wind project — Cape Wind in Massachusetts — in federal waters. While the lease is signed, it may take years to build the turbines and secure finale approvals. In lane two you’ve got Texas, which is the one state that is allowed to circumvent federal regulatory approvals if wind projects are built within 10.3 miles off the state’s coast.

If you talk to regulators in Texas, they’ll be more than happy to point out that they’ve already signed eight leases for offshore wind projects. On top of that, they’re hoping one of those projects, which is owned by CenterPoint Energy, will be up and running within a year.

And make no bones about it: Texas wants to be the first. Jim Suydam, spokesman for the General Land Office, the regulatory authority in charge of permitting wind projects, puts it this way: “Well, we’re Texas, of course we want to be first. We said we’d be first five years ago and we still think we’ll be first.”

He continues: “We’re number one on onshore wind and we expect that we’ll be first on offshore wind because we’re easy to do business with,” noting that efforts to approve Cape Wind were mired in years of regulatory delay.

Suydam says Texas wants to create a regulatory environment that is friendly to wind, for example charging companies less for the lease in hopes of reaping the benefits of production down the road. “In Texas, this is a money issue for us,” he says. “Oil and gas has been very, very good for Texas. We’re still making tons of money off of oil and natural gas, but we realize those are depletable resources. We’re not crunchy hippies, we’re doing it for money. And that’s why it’s going to work.”

The Cape Wind project, off the coast of Massachusetts, has been mired in regulatory delays for years, and today’s lease signing sends a signal that offshore wind can be a viable energy source. The Northeast, which has little capacity for onshore wind, is putting all its money on Cape Wind to help meet future renewable energy mandates. If offshore wind doesn’t flourish in the region, state regulators could be forced to import wind energy from the Midwest on expensive high-powered electric lines.

But offshore wind certainly has its critics. They point to years-long delays (it took nine years to permit the project), soaring costs and the potential for offshore wind energy to raise electricity rates for some state residents.

The Interior Department lays out the specifics of the project:

The area offered in the lease is comprised of 25 square miles on the OCS in Nantucket Sound offshore Massachusetts.  The 130 planned wind turbines could generate a maximum electric output of 468 megawatts with an average anticipated output of 182 megawatts.  At average expected production, Cape Wind could produce enough energy to power more than 200,000 homes in Massachusetts.  The site of the project on Horseshoe Shoals lies outside shipping channels, ferry routes and flight paths but is adjacent to power-consuming coastal communities.

The Cape Wind energy project would be the first wind farm on the OCS, potentially generating enough power to meet 75 percent of the electricity demand for Cape Cod, Martha’s Vineyard and Nantucket Island combined.

I wonder if we can shift gears a bit and talk about coal for a few minutes. Obviously, if an RES goes into effect, then the country will have a mandate to produce at least some of our electricity from renewable sources. It seems that wind is the leading renewable right now. But as we depend more and more on wind, it seems like we’re going to have to build more and more electric lines, or electric transmission, to move that wind from one side of the country to the other. Right now, it seems like we’ll be moving it from the Midwest to the East Coast, where offshore wind hasn’t quite flourished yet. What kind of transmission investment do you think might come along with an RES?

We have done a fair amount of work on transmission from a couple of different perspectives. We’re certainly looking to reduce our dependence on coal in every aspect of that. So, one part of that fight is to stop transmission lines that will carry new coal to ratepayers. In the Southwest, we’re doing a lot of work in terms of transmission for solar.

But as far as transmission with wind, we want to make sure that a long-term transmission plan is developed that incorporates data that shows we’re reducing out dependence on coal. As we do that, transmission capacity will be freed up. We want to make sure that long-term investments in the electric grid are made so that there’s a decreased reliance on coal and an increased reliance on distributed power. If the context is broad enough to include those two items, then we’d consider supporting new transmission to make sure that clean energy is being brought to consumers from where it’s generated.

From a broader perspective, we support conservation and big investments in efficiency to reduce the growth in energy demand. We want to see the grid cleaned up so that we’re significantly reducing the amount of coal that’s being generated and natural gas to a certain point and there’s a corresponding increase in both wind and small-scale solar. And so investments in wind should be made with all of those things in mind, as opposed to adding more capacity again and again. Then there’s a separate set of factors regarding where transmission lines should be established that also guides out thinking.

What about offshore wind? Where do you see offshore wind in the next 20 or 30 years?

We expect it to grow significantly. Before the environmental impact studies have been assessed, we’re conceptually very in favor of it. We’re also quite intrigued by the idea of establishing a  large-scale backbone so that some of these individual wind farms can be connected to an offshore grid that can run power up and down the coast.

Sens. Jeff Bingaman (D-N.M.) and Sam Brownback (R-Kan.) unveiled a proposal Tuesday to increase use of renewable energy. (Flickr, Auntie K)

A bipartisan coalition of senators today unveiled a proposal that would require a certain percentage of the country’s electricity to come from renewable sources like wind and solar. The announcement revived hopes that the measure could move this year, but it remains unclear if there is enough time or political will in the Senate to pass the legislation this session.

Senate Majority Leader Harry Reid (D-Nev.) has not committed to setting aside floor time for the proposal this year. And the bill’s author, Sen. Jeff Bingaman (D-N.M.), told reporters today that he would wait to cement the necessary votes before approaching Reid to schedule a vote.

Renewable energy advocates and environmentalists praised the announcement, while noting that the renewable energy standard, or RES, is not stringent enough. The last six months have been difficult for environmentalists, who faced a string of legislative defeats — first on economy-wide cap-and-trade, then on a narrow cap-and-trade bill. And now there are legitimate questions about whether the Senate will be able to pass a slimmed-down energy bill or an oil spill response bill, even after the mid-term elections.

So the RES announcement was, for many environmentalists, a welcome respite from months of disappointment. Sean Garren, clean energy advocate at Environment America, said, “Senator Bingaman’s renewable electricity standard would commit America to beginning the move towards a clean energy economy.  While the standard is weaker than America can and should achieve, the Senate must pass the bill quickly to deliver to the entire country the benefits that states with standards are already enjoying.”

The bill, which is sponsored by Bingaman and Sam Brownback (R-Kans.), has early support from a number of Democrats, including Sen. Byron Dorgan (N.D.), Tom Udall (D-N.M.) and Mark Udall (D-Colo.). Two other Republicans, Sens. Susan Collins (Maine) and John Ensign (Nev.), also lent their support to the proposal.

The proposal, which is nearly identical to a provision in an energy bill passed by Bingaman’s Senate Energy and Natural Resources Committee last year, requires that 15 percent of the country’s electricity comes from renewable sources by 2021. Entities can meet the standard by producing or purchasing renewable energy like wind, solar, biomass and some hydropower. They can also meet the standard through energy efficiency savings. The RES will not affect state programs, many of which are more stringent than the federal proposal, according to a summary of the bill.

But a 2009 analysis of a similar RES proposal by the National Renewable Energy Laboratory, a research arm of the Department of Energy, found that it likely won’t increase renewable energy development beyond a business-as-usual scenario. The analysis is based on Bingaman’s original 20 percent by 2021 RES proposal, which was cut down to 15 percent to win support from Republicans on the committee.

Bingaman said he believes he has the 60 votes necessary to pass the new RES bill. “I think that the votes are present in the Senate to pass a renewable electricity standard,” he said in a statement. “I think that they are present in the House. I think that we need to get on with figuring out what we can pass and move forward.”

Franz Matzner, climate center legislative director at the Natural Resources Defense Council, says the RES proposal “doesn’t deliver the goods the way we’d like to see it.” The bill is a “band aid” measure, he says, arguing that the Senate needs to move on comprehensive climate change legislation. But Matzner says, “If this is the best place we can get bipartisan agreement, it’s better than getting nothing done.”

It’s too early to say whether the bill will be able to pass the Senate this year. There are very few legislative days left before the Senate breaks for the mid-term elections, and it’s unclear how long a lame-duck session might be. “They could have an eight-hour lame-duck session or they could have a productive two weeks or they could sit and do nothing,” Matzner says.

Reid’s spokeswoman, Regan Lachapelle, notes there is very little time left in the year to pass the RES bill. “Senator Reid strongly supports a national renewable electricity standard,” LaChapelle says. “But, there is very limited time before the October recess and probably even during the lame duck, so the proponents of a stand-alone RES will need to demonstrate they have 60 votes for swift floor action before floor consideration could be scheduled.”

One environmentalist — who has been closely following the issue but is not authorized to speak on the record — said passage of the RES could be dependent on whether it moves as a stand-alone measure or is packaged together with other provisions. At the same time, the environmentalist says, much will depend on the outcome of the mid-term elections. “The bigger the Republican success on election day, the less likely anything will be accomplished during the lame duck session,” the environmentalist says.

Many environmentalists have called for a 25 percent RES by 2025, but before the August recess a coalition of renewable energy advocates endorsed the Bingaman 15 percent RES, noting that it was the only proposal that could win bipartisan support. “In this political climate, we have to do what we have to do,” American Wind Energy Association President Denise Bode told reporters in July.

The letter comes in the midst of a broad lobbying effort by renewable energy advocates to pass this year an RES, which would require that a certain percentage of the country’s electricity come from renewable sources, like wind and solar. The American Wind Energy Association is planning a week full of events on the RES this week, including running television ads in support of the provision.

The governors — the chairman and the vice chairman of the group, which includes 28 governors as members — also penned an op-ed on the topic in Politico today:

The letter was also sent to Senate Minority Leader Mitch McConnell (R-Ky.) and Sens. Jeff Bingaman (D-N.M.) and Lisa Murkowski (R-Alaska), the chairman and ranking member of the Senate Energy and Natural Resources Committee.

The Department of Energy’s National Renewable Energy Lab estimated it would cost at least $43 billion to upgrade the nation’s electric system to move to 20 percent wind by 2030. (Flickr, Travel Aficionado)

By now, the Obama administration has made clear it wants to ramp up the use of renewable energy, calling it a key to the nation’s leadership in the 21st century. And some in Congress are hoping to pass a federal renewable energy standard, requiring the production of more wind, solar, biomass and geothermal energy.

[Environment1] Utilities recognize the shift to green energy as a major growth prospect. But they also recognize an impediment: Infrastructure. Indeed, across the country, utility and energy companies are preparing for a massive fight over how to deliver clean energy to people’s homes — and, more to the point, who will pay for the necessary infrastructure to get the energy there.

Behind the scenes, in recent months, utilities have battled over how to allocate the costs of the new high-powered electric lines necessary to move wind energy from one part of the country to the other. Despite efforts by federal regulators to referee the fight, some experts foresee further delays in the construction of the new electric, or transmission, lines they say are essential for meeting federal and state renewable energy mandates.

“A lack of transmission lines is the single greatest barrier to wind here in the Midwest. The lack of transmission has proved to be a huge barrier,” says Jamie Karnik, communications manager at Wind on the Wires, an advocacy group. Karnik says the Midwest produces about 10,000 megawatts of wind now, and needs to build at least 25,000 to 40,000 further megawatts of capacity to meet state and regional renewable energy goals.

Many utilities in the wind-rich Midwest would like to move excess electricity to the Northeast on new, high-powered lines. But utilities in the Northeast see Midwestern wind as a threat to its nascent offshore wind industry. While offshore wind is plentiful in the region, it has been plagued by regulatory delays and high costs. Cheap wind from the Midwest could keep the Northeast from developing its own local source of renewable power.

“As the nation looks to move to a renewable energy standard, a lot of that really comes down to how to meet the energy needs of the East coast,” Karnik says. “Certainly people who are building wind in the Midwest, have their eye on the eastern market.”

Utilities on both sides of this divide are drawing the battle lines over so-called cost allocation policies, which lay out a structure for how the costs for these lines are spread among ratepayers. One faction (including some Midwestern utilities and renewable energy advocates) proposes spreading the costs broadly over an entire region, arguing that new lines deliver broad economic and electric reliability benefits to all ratepayers. The other faction (including many Northeastern utilities) says costs should be paid by the specific beneficiaries of the new line.

Electric industry stakeholders — utilities, renewable energy developers, transmission companies — stand to lose or gain billions of dollars based on the structure of these policies. As a result, they are pouring significant lobbying resources into their development. “Needed transmission in the eastern interconnection would be about $85 billion,” says one lawyer following the issue who was not authorized to speak on the record. “The dollars involved here are huge and the regional economic impacts are huge. Utilities are keenly aware of that and that’s why they are fighting over cost allocation.”

A 2008 study by the Department of Energy’s National Renewable Energy Lab said it would cost at least $43 billion to upgrade the nation’s electric system to move to 20 percent wind by 2030. Others have put estimates significantly higher. A study conducted by the lab in January also said that any effort to meet the 20 percent goal in the Northeast would require “significant expansion of the transmission infrastructure.”

At the center of this fight is the Federal Energy Regulatory Commission, or FERC, a little-known agency that has often played second fiddle to the Department of Energy, but energy policy experts say has far more power over shaping the country’s energy policy. After months of discussions with industry stakeholders, FERC released in June a cost allocation proposal meant to assuage utilities’ concerns. It drew on elements of both utility factions’ proposals, giving some preference to projects that meet policy goals like renewable mandates, while ensuring that the costs allocated are at least “roughly commensurate” with the benefits delivered.

For the most part, industry stakeholders say they can work within the framework FERC set up: It gives utilities latitude to develop their own workable proposals. But as the public comment period on FERC’s proposal comes to a close at the end of this month, they also say the cost allocation debate might take years to resolve.

The lawyer following the issue said the ongoing battles between utilities over cost allocation could significantly impact states’ abilities to meet renewable energy standards. “I think it will affect it tremendously,” the lawyer says. “I think it’s going to continue to be really, really hard to build big lines.”

Rob Gramlich, senior vice president for public policy at the American Wind Energy Association, the wind industry’s national trade group, says he is “encouraged by what FERC is doing,” adding, “They clearly understand the challenges of the new clean energy economy and what that entails.” He says that FERC is working to expand a “Balkanized” electricity grid that was meant only to work on a local, rather than a regional basis.

In order to meet a stringent renewable energy standard, Gramlich says transmission must be built across regions in order to bring wind from the Midwest to states that don’t have many renewable resources. “To do that we’d need more regionalization of the type that FERC is pursuing now,” he says. “To do it cost effectively, by using the most economic resource areas, significant new transmission would be needed.”

But Gramlich notes that any rulemaking that FERC finalizes will likely be challenged in court, as some companies will “stand to lose a lot” no matter what proposal is adopted. Such challenges could delay a process that likely won’t even go into effect until 2012, given the various compliance periods allowed under the plan.

Joseph Kelliher — former FERC chairman and current executive vice president of federal regulatory affairs at NextEra Energy, the country’s largest renewable energy developer — says FERC’s cost allocation proposal is “critical and essential to translating conceptual renewable energy projects to real projects. They actually won’t get built until there is some clear conception of cost recovery.”

Kelliher also defends broad cost socialization, saying that entire regions benefit from new lines that carry renewable energy. “The notion that only ‘A’ and ‘B’ have to pay for that line and nobody else has to pay for anything, economists would look at that and say it’s a classic ‘free rider,’” he says. “Free riders tend to like the status quo and would like to get something for nothing. The current policy does discourage investment.”

At the same time, offshore wind is just not as cost competitive as onshore wind from the Midwest, Kelliher says. “The difference between onshore wind and offshore wind is about 400 percent. If transmission constraints don’t allow you to import good onshore wind from the Midwest for at least part of your renewable energy needs, you’re left paying” more, he says.

But Tim Fagan, director of public policy at the New Jersey-based PSEG, says broad socialization of costs puts the Northeast at a disadvantage because it favors Midwestern wind. “The concern is that we may end up with an overall less economic solution,” he says. “If the resources from the Midwest are able to have these long transmission lines paid for, that may competitively eek out other options.”

Fagan says Northeastern states need to be given time to develop local offshore wind and solar resources. “Eastern states are looking to develop offshore resources; they’re plentiful and they’re close to load,” he says. “In New Jersey, we’ve been aggressively developing PV solar.”

While a broad energy bill authored by Sen. Jeff Bingaman (D-N.M.) addressed some electric transmission issues, those provisions are not expected to come up for a vote in the Senate this year. Until then, electric utility officials say they will be watching Congress closely in the coming weeks to see if momentum is building for passage of a federal RES. Renewable energy advocates have been working feverishly behind the scenes during the August recess to convince key senators that the proposal could get the 60 votes necessary for passage.

“You’re beginning to see people stepping up and saying we can’t meet these mandates if we can’t get transmission built,” says one utility official who requested anonymity to speak openly. “All of this comes down to whether or not we have a federal RES. That has the potential to change things.”