Environmental Engineering Reference
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to reduce wind energy costs to US$0.03-$0.05 per kWh by 1995, reduce
capital costs of wind systems to $500-$750 per kW of installed capacity by
1995, reduce operation and maintenance costs for wind systems to under
US$0.01 per kWh by 1995, and increase capacity factors for wind systems
to 25 to 35% by 1995. 28
With wind power research goals irmly in place and the price of oil still
hovering at around US$40 per barrel, the government then turned its focus
to stimulating market development. In this regard, two bills introduced in
the early 1990s bear mention. First, in 1990-1991, the U.S. Congress passed
the Solar, Wind, Waste, and Geothermal Power Production Incentives Act. 29
his act essentially amended PURPA to allow renewable energy facilities of
any size to receive PURPA beneits. his amendment set the stage for a new
subsidy that would be announced the following year to replace the USNEA
tax credits, which had expired back in 1985. Second, in 1992, an Energy
Policy Act was introduced. his included a renewable electricity production
tax credit (PTC) which provided wind power providers with a US$0.015
per kWh tax credit (in inlation adjusted 1993 dollars) for power produced
over the irst 10  years of operation. 30 Eligibility for applying for the PTC
would extend until July 1999. In addition to the PTC, the Energy Policy
Act also established a federal renewable energy production incentive (REPI)
amounting to US$0.015 per kWh (in inlation adjusted 1993 dollars) for
the irst 10  years of operation to state or nonproit electric cooperatives
for wind power production. his added incentive was slated to run until
October 1, 2016, with annual appropriation limits established to limit the
iscal burden.
With oil prices dropping to below US$30 per barrel (and the price of natu-
ral gas following suit), these incentives were not large enough to catalyze a
wind power renaissance; however, they were suicient to fuel enough wind
power development to replace older turbines, which were nearing obsoles-
cence. Consequently, although installed wind power capacity did not grow
between 1992 and 1997 (see Figure 7.2), the wind power industry emerged
from this era in far better condition. he new turbines being erected around
the country were of far superior quality and the reliability concerns experi-
enced in the early 1980s were largely attenuated.
It bears noting that in the seven-year period between 1993 and 1999,
national wind power capacity expanded by only 855 MW. he implication
of such phlegmatic progress was that the inancial impact of the PTC was
not enough to attract staunch political opposition. herefore, when the PTC
expired in July of 1999, advocates of extending the incentive managed to
garner enough support for the subsidy to be resurrected in December 1999
and extended until December 31, 2001 (under the auspices of the Ticket
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