Wind on the Wires1 - Smart Grid (R) Evolution: Electric Power Struggles - page 136

offshore wind (Schwartz et al. 2010 ). The entire U.S. electric grid installed capacity is a
little less than 1,000 GW, so theoretically at least, the United States could meet all of its
current demand with a massive deployment of wind power. The 61,000 MW of currently
installed wind turbines are not evenly spread across the country, but clustered in places that
have both supportive policies and strong wind resources: Texas (12,214 MW), California
(5,587 MW), Iowa (5,133 MW), Illinois (3,568 MW), and Oregon (3,153 MW) are the
states with the most installed wind capacity (NREL 2013 ) . In the Upper Midwest, a total of
13,000 MW of wind power capacity is online.
6.3.1 United States Policy Context for Wind Development
Just as the history of United States wind turbine research and development was linked
with the geopolitics of energy, changes in renewable-related state and federal policies were
also linked to the larger global energy landscape. In late 1973, the OPEC Oil Embargo
rapidly quadrupled the price of oil, and the subsequent gasoline shortages profoundly
shifted U.S. attitudes toward energy for the next decade. When President Carter signed the
1978 Public Utilities Regulatory Policy Act (or PURPA), Section 210 opened the utility
industrytothird-partyproducers,includingwindenergydevelopers.Section210ofthisbill
required electric utilities to purchase electricity from qualifying facilities at a price equal
to the utility's avoided cost of generation (Hirsh 1999 ) . Although the significance of this
requirement was not broadly recognized at the time, this national-level policy had a large
impact on wind development.
In addition to the federal policies shaping the energy landscape, U.S. state policies also
have influenced wind development. States retain statutory authority to approve and site
projects, set electric rates, and implement multiple types of energy policy and incentives.
It was up to individual state Public Utilities Commissions (PUCs) to set the “avoided cost”
rate required by PURPA. In California, the PUC stipulated that qualifying facilities could
be paid 0.07 $/kWh for every kilowatt sold. Also in 1978, California passed legislation
to give tax credits for solar and wind energy development. With these state and federal
policies, coupled with earlier federal incentives which granted tax credits for capital
investments and energy sector investments, the economic incentives for developing
renewable energy generation projects became enticing.
California, a state that has always been progressive in environmental and energy
programs, soon became a leader in early wind energy development in the United States.
The combined state and federal policies amounted to a 50 percent tax credit for wind and
solar and, with PURPA guaranteeing market access, these policies created the first U.S.
wind boom in California (Musgrove 2010 ) .