Environmental Engineering Reference
In-Depth Information
Evolution of Wind Power Stations
Tax incentives and favorable power purchase rates in the late 970s and early 980s set
the stage for an explosive growth in formation of
Independent Power Producers (IPP)
that
sold wind turbines in a project to private owners. These individuals could use the state and
federal
Investment Tax Credits (ITC)
available at the time. This incentive mechanism was
subsequently replaced by a
Production Tax Credit
(PTC) that emphasized energy produc-
tion rather than investment. Economic advantages of siting wind turbines near each other in
wind power stations were found to be advantageous over installing many individual units,
each with its own equipment for handling power and its own infrastructure for operations
and maintenance. However, prior to the 980s, most wind energy development focused on
individual, often prototype, wind turbines. The fledgling wind industry was in the business
of manufacturing turbines, not installing and operating large numbers of machines.
From 982 through 984, more than 40 firms developed wind power stations in Cali-
fornia. In order to sell their machines, many of the turbine manufacturers also built power
stations. Later as markets matured, turbine suppliers realized that they were competing with
potential customers and shifted focus to supplying and maintaining turbine equipment. This
business pattern was often repeated in new markets in other states or other countries, in which
turbine manufacturers participated in the development of initial installations. By the end of
986, the 0 largest wind turbine manufacturers installed over 80 percent of California's
wind power capacity. The four largest of these (
United States Windpower, Micon, Fayette
,
and
Vestas
) accounted for 55 percent of the projects. By 987, however, only a half-dozen
major companies remained.
Until the U.S. Department of Energy in the early 980s sponsored the installation of
a cluster of three 2.5-MW Mod-2 turbines (shown in Fig. 3-38), little attention was paid to
the design of groups of machines and the potential impacts of upwind turbines on others
operating nearby. Wake effects on downwind turbines were measured at this early cluster
of turbines, including increases in turbulence-induced fatigue loads and decreases in energy
production.
Energy generated by wind power stations in California quadrupled from 983 to 984,
tripled from 984 to 985, and quadrupled again from 985 through 99. Early in 99,
installed capacity surpassed ,500 MW, with more than 95 percent of the wind energy output
coming from three areas in California: The Altamont Pass area (Fig. 4-2) accounted for 39
percent, the Tehachapi Pass area (Fig. 4-22) produced 38 percent, and the output from the
San Gorgonio Pass area (Fig. 4-23) was 8 percent of the statewide total [CEC 992]. Fol-
lowing expiration of the Federal tax credits in 985 and the California tax credits in 990,
energy prices dropped and the wind power business virtually dried up in the United States.
Current Business Structure of Wind Power Stations
In October 992 the
Federal Energy Policy Act
was made law and it included provisions
that shaped the wind business for years to come. Title XIX, Subtitle A—Energy Conserva-
tion and Production Incentives, Section 45, established the renewable energy
Production
Tax Credit (PTC)
that allowed a federal tax credit of $0.05/kWh (adjusted for inflation) for
qualifying wind power plants that sell their energy. In addition, Title XII, Renewable Energy,
Section 22, established the
Renewable Energy Production Incentive
(REPI) that provided a
similar inflation-adjusted $0.05/kWh payment to state-owned or municipal utilities that do
not pay federal taxes. Factoring in inflation, the PTC and REPI were $0.02/kWh in 2008.
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