Net Generaon of Electricity by Wind Power


40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000


20,000 0


2000


2001


2002


2003


2004


2005


2006


In December 2015, Congress extended both credits: the PTC has been retroactively applied to 2015 and extended to 2016, while the ITC at current rates has been extended to 2019. Unless revisions are made over the next couple of years, which could very well happen, these incentives will be phased out incrementally thereafter.


In the boldest commitment to date at the federal level, the Clean Power Plan was introduced in summer 2015. By 2030 the plan aims to cut carbon emissions from the power sector by 32% below 2005 levels. It allows states to choose how they meet EPA-mandated individual targets. If upheld by the courts, the CPP is expected to accelerate wind and solar developments across the country: an incentive pro- gram is in place to grant credits to states that invest early in renewable sources.


State-level policies include renewable portfolio standards (RPS) and fi nancing programs such as power purchase agreements, rebates, and grants. RPS mechanisms require electricity retailers to offer a certain percentage of power gen- erated from renewable sources. Introduced in the late 1990s and early 2000s, RPS are currently in place in 29 states and the District of Columbia. These targets usually increase over time and vary widely between states. For example, Hawaii has the most aggressive target, aiming to generate 100% of its energy needs from renewable sources by 2045.


Looking Ahead The momentum that has accompanied solar and wind en-


ergy growth over the past decade still faces a number of is- sues. Solar and wind are considered variable energy sources,


2007


2008


2009


2010


2011


2012


2013


2014


as their availability depends on the amount of sun shining or the amount of wind blowing. Variability makes integration into existing power grids diffi cult because initial grid design relied on a steady fl ow of generation. Fluctuations in solar and wind also make it diffi cult for generators to predict and balance output. Additionally, the National Renewable Energy Labora- tory (NREL) fi nds that greater renewable energy additions come with a unique economic barrier: at a certain point, solar and wind are no longer economically competitive or desirable to the system. The idea—called the economic carrying ca- pacity—is understood from the perspective of power owners. It suggests that with high rates of penetration, these energy sources drive down average market prices below what the producers want during peak demand. As Alex Trembath and Jesse Jenkins of the Breakthrough Institute note, the mar- ginal value of variable renewable energy declines as penetra- tion increases. These challenges have ignited research in grid management, storage technology, and demand response. The patchwork of state and federal policies that exist today points to the lack of coordinated national energy policy, another potential roadblock to scaling renewable energy more quickly. As Yale Law Professor E. Donald Elliott argues, this is due to structural factors such as the fragmented nature of energy and utilities governance, including the line be- tween state and federal oversight. The lack of a national RPS mechanism is a testament to this, as is the handful of states that have no renewable targets at all. As another example, at the time of writing, the Supreme Court temporarily suspend- ed Clean Power Plan, citing uncertainty about the legality of EPA’s ability to obligate states to emission targets.


11 — Energy Manufacturing 2016


MW / hr


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