According to data released in March by the U.S. Department of Energy’s (DOE) Energy Information Administration (EIA), wind energy produced 4.4 percent of all of the U.S.’s electricity in 2014, and retained its position as the fifth largest source of electricity in the country. Renewable energy sources, including hydropower, now produce over 13 percent of the U.S.’s electricity, with wind power contributing a third of that amount. Wind power is also proving to be a cost-effective solution for states and utilities to limit pollution, as the American wind fleet has reduced carbon dioxide pollution by approximately 125 million metric tons, which is equivalent to 26 million cars worth of carbon emissions.
From California to New York, wind turbine farms are popping up all over the country. The United States is second only to China in terms of installed wind power capacity, and the demand is increasing. Georgetown, Texas, with a population of 50,000 people, will be the first city in the Lone Star state to be completely powered by renewable energy. Why? Because, according to a U.S. Energy Department analysis, wind power will be less expensive than electricity produced from natural gas within the next 10 years, even without a federal tax incentive.
Wind farms provided 4.5 percent of U.S. power supplies in 2013. If that number increased to 35 percent by 2050, power prices would decrease and result in $400 billion in benefits related to reduced emissions of greenhouse gases, Bloomberg reports. Additional benefits include reduced water consumption by the power industry, 600,000 new jobs, and a drop in air pollution. Read more…
As wind energy continues to expand across the U.S., some wind farm operators face increasing scrutiny from environmental groups to comply with federal laws protecting the environment. While generating clean, affordable energy, wind turbines are also a potential hazard for many endangered species that live on or around the wind farms. Blade collisions and sudden drops in air pressure contribute to the death of more than 1.4 million types of bird and bat species. In recent years, several environmental and animal rights activists have filed several federal cases in the past few years against energy companies and wind farms, prompting the clean energy community to take a closer look at green energy and its impact on nature and wildlife.
In order to avoid negative attention and potential lawsuits against their projects, wind farm operators frequently assess the impact of their facilities on endangered species and take active measures Read more…
What is the Production Tax Credit?
The Production Tax Credit (PTC) provides a tax credit for each kilowatt-hour of wind power produced by utility-scale wind turbines and is applicable for the first 10 years of electricity production. It was created under the Energy Policy Act of 1992 and is set to expire on December 31, 2012. Critics of the PTC feel that the wind industry is stable enough to survive without subsidies, while PTC supporters identify the array of subsidies available to the more-than-stable fossil fuel industry. Supporters fear the credit’s expiration will create job losses and lead to higher project, electricity and insurance costs.
How does it affect the wind industry?
According to the American Wind Energy Association (AWEA), many in the wind industry are already blaming Congressional inaction on the PTC extension for job losses in virtually all areas of the industry. Read more…
A recent report by the American Wind Energy Association outlined the impact of renewable energy tax credits from the Federal Government (the 1603 program). They reported that “the 1603 tax credit program restarted stalled projects and saved all 40,000 jobs at risk. This year, a study by Lawrence Berkley National Laboratory found that the 1603 tax credit supported shovel-ready projects and over 50,000 American jobs. The 1603 program actually led to a record-breaking year of 10,000 megawatts (MW) of new wind in 2009, compared to the 4,000 MW feared prior to the Recovery Act.”
This growth in the Renewable Energy sector, including wind, has increased the availability of insurance competition and product development. New products have been introduced by various insurers for wind farms, solar panel farms, green roof construction, geothermal plant and systems integrators. Expanded insurance products are now available from Chubb, ACE, Zurich and Chartis.
While there will still be challenges to Cape Wind’s proposed Nantucket Sound project, Mr. Salazar’s approval of the project this week provides favorable momentum to a series of projects in waters offshore of a number of states along the East Coast and Great Lakes regions. These projects are critical to meeting our goals of utilizing the abundant potential generating capacity of offshore wind, estimated to be in excess of 80,000 megawatts. Our team certainly looks forward to working with developers and financiers to reduce the average cost of power across these projects with this positive signal from the federal government, along with support of the governors of the six East Coast states who called on Mr. Salazar to approve this milestone project.
William Gallagher Associates is a leading provider of insurance brokerage, risk management and employee benefits services to firms with complex risks and dynamic needs, within industries that include technology, life sciences, financial risks, health care, renewable energy & clean technology, and environmental services. WGA has offices in Boston, MA; New York, NY; Hartford, CT; Princeton, NJ; Columbia, MD; and Atlanta, GA.