25th ANNUAL CONFERENCE U.S. WIND ENERGY INDUSTRY

OPENING SESSION
Omni Shoreham Hotel

TALKING POINTS

WIND: COST OF ELECTRICITY

Wind energy's actual costs are right on target with DOE's goals
- 5 cents/kWh in '95
- Less than 4 cents/kWh in 2000
- Less than 3.5 cents/kWh in 2005
- Will be cheaper than natural gas in 2002.
Wind has come of age, competes with other generation sources
- '94 was a peak year; 600 MW installed world-wide
- 7% in U.S. - 42 MW;
Electricity produced in U.S. in '94 = 3.2 billion kWh
This Administration has shown a strong commitment to wind energy: FY93 --> $23.8M FY94 --> $29.2M FY95 --> $47.1M FY96 --> $49.8M requested
Currently in U.S.: 1650 MW installed;
- By 2000, 5000 MW total
- By 2010, 20,000 MW total --> Would represent close to 3 percent of all electric utility generation in U.S.

(Two Slides for this Section)

NATIONAL WIND TECHNOLOGY CENTER/DEDICATION

DOE's programs are focused to partner with industry to ensure successful commercialization (domestic and foreign) to provide an environmentally sound energy source and create jobs
National Wind Technology Center -- Phase 1 dedicated October, 1994 -- Phase 2 w/Users Center complete in '96

NATIONAL WIND COORDINATING COMMITTEE

Established in March, 1994 as forum where key stakeholders work together to ensure the responsible use of wind energy
The committee has met 7 times since 1994
Committee membership includes:
Utilities, Independent Power Producers, Trade Organizations, Turbine Manufacturers, Environmental Groups, State Energy Offices, Regulators, etc.

WIND IN THE BAG

CHINA PHOTO

Photo depicts signing ceremony with Zond Systems --> worth $180 Million
Total China trip deals will result in 100s of MW of wind power
Wind energy provides substantial opportunities to export technology and create jobs
Over $600 M in projects were agreed to during recent visits to India and China
By 2000, wind will be a $3 Billion market

INDIA PHOTO

Kenetech Wind Power/ABAN Project worth $300 Million to furnish 600 wind turbines

GLOBAL WINDS

Countries with DOE Wind Program involvement: (DOE partnership or technical assistance)
Argentina, Australia, Bolivia, Botswana, Brazil, Canada, Chile, China, Columbia, Cyprus, European Union, Ghana, Guatemala, Haiti, Honduras, India, Indonesia, Mexico, Pakistan, Philippines, Poland, Russia, South Africa, Tanzania, Thailand and Ukraine

FEDERAL INTEREST -- RENEWABLE ISSUES

Federal Interest
- Economic Efficiency
- Technology Development
- Resource Diversity
- Environmental Protection
Renewable Issues
- PURPA??
- Consistent Market
  - Not a good market in U.S.
  - Transmission Issues
Stranded Costs
- * Euphemism for old, dirty and inefficient
State Planning
- * Better Process

As changes occur in the utility industry; renewables do have advantages in some areas
The modular nature of many renewable technologies and their short construction periods allow closer matching of demand growth with new capacity
Green pricing -- many consumers have expressed a preference for clean sources of power and some are willing to pay a premium for this energy
Renewables can provide distributed benefits - by locating renewables in key areas, some additions to transmission capacity can be avoided
Risk Shifting -- Depending on state regulatory practice, electricity suppliers (rather than consumers) could be required to absorb the risks associated with future changes in fuel prices and environmental laws

PURPA: THE TEST

Address Implementation Problem
Technical Forums
Federal/State Cooperation
The recent FERC decision on PURPA petitions from California utilities, as well as changes from a restructured utility industry, have raised questions about the future of renewables.
PURPA has served country well; created a new industry; issue is one of continued subsidization or increased competition; I favor competition and economic efficiency as well as broad authority for the states to implement PURPA and the Energy Policy Act.