The $$ and Sense of Wind Energy - Noble Environmental Power

Historical Coal PricesSource: EIA

“Wind energy adds diversity to our generation fleet and provides a hedgeagainst fossil fuel price increases. In addition, the development of renewableenergy resources is widely supported by the public and our customers.”Rick Walker, director, Renewable Energy Business Development, AEPEnergy Services, Inc., Dallas, TX

Wind Energy Investors

Wind energy boosts economic development

Economic Development Impacts• Land Lease Payments: 2-3% of grossrevenue $2500-4000/MW/year• Local property tax revenue: ranges widely -$300K-1700K/yr per 100MW• 100-200 jobs/100MW during construction• 6-10 permanent O&M jobs per 100 MW• Local construction and service industry:concrete, towers usually done locally

Case Study: TexasUtilities and wind companiesinvested $1B in 2001 to build912 MW of new wind power,resulting in:• 2,500 quality jobs with apayroll of $75M• $13.3M in tax revenuesfor schools and counties• $2.5M in 2002 royaltyincome to landowners• Another 2,900 indirectjobs as a result of themultiplier effect• $4.6M increase in PecosCounty property taxrevenue in 2002

“Converting the wind into a much-needed commodity while providinggood jobs, the Colorado Green Wind Farm is a boost to the localeconomy and tax base.”John Stulp, Ag Commissioner, Colorado

Michigan resultsTotal economic impacts from new wind and coal plants in Michigan(direct, indirect and induced)Construction + 20 yrs of operationMillions$1,400$1,200$1,000$800$600$400$200Landowner revenueProperty taxesOperationsConstruction$-Wind (715 MW) Wind (2.5% tax) Coal (250 MW)

Michigan – Economic Impactsfrom 1000 MW of new wind developmentWind energy’s economic “ripple effect”Direct ImpactsPayments to Landowners:• $2.7 million/yearLocal Property Tax Revenue:• $18.6 million/yearConstruction Phase:• 1426 new construction jobs• $188.5 M to local economiesOperational Phase:• 230 new long-term jobs• $21.2 M/yr to local economiesIndirect ImpactsConstruction Phase:• 560 new jobs• $53.5 M to localeconomiesOperational Phase:• 60 local jobs• $6.6 M/yr to localeconomiesInduced ImpactsConstruction Phase:• 844 new jobs• $83.4 M to localeconomiesOperational Phase:• 217 local jobs• $21.5 M/yr to localeconomiesTotals (construction + 20 yrs)Total economic benefit to Michigan = $1.3 billionNew local jobs during construction = 2830New local long-term jobs = 507Construction Phase = 1-2 yearsOperational Phase = 20+ years

Wind energy doesn’t t consume water

Sustainable Withdrawal Of FreshwaterIs National IssueSource: EPRI 2003

Wind is a homegrown energy source

Michigan Wind ResourcesWind Potential: 0.85 GW(> 32% Capacity Factor)Wind Potential: 15 GWWind Potential: 254 GW

NorthAmericanNatural GasFuture

Wind energy isinexhaustible and infinitely renewable

U.S. OIL PRODUCTION 1900 TO 2050PEAK 1970GONE: 65% OFU.S. OIL HASBEEN USED.IT’S HISTORY.2001DOWNTHE OIL“OFFRAMP”1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050PRUDHOE BAY PRODUCTIONGONELEFT

The North Carolina Analog

Wind energy has many environmentalbenefits

Environmental Benefits•No SOxor NOx• No particulates• No mercury•No CO2•No water

People Want Renewable Energy!Capacity (MW)8000075000700006500060000550005000045000400003500030000250002000015000100005000019821983Source: WindPower Monthly1. Germany: 20952 MW2. Spain: 12500 MW3. United States: 12376 MW4. India: 7093 MW5. Denmark: 3136 MW1984198519861987198819891990Total Installed Wind CapacityWorld total July 2007: 78728 MWUnited States Europe Rest of World19911992199319941995199619971998199920002001200220032004200520062007

Installed Wind Capacities (99-May 07)

Renewables Portfolio Standards*WA: 15% by 2020OR: 25% by 2025 (large utilities)5% - 10% by 2025 (smaller utilities)CA: 20% by 2010☼ *NV: 20% by 2015☼ AZ: 15% by 2025MT: 15% by 2015☼ NM: 20% by 2020 (IOUs)10% by 2020 (co-ops)ND: 10% by 2015MN: 25% by 2025(Xcel: 30% by 2020)IA: 105 MW☼ CO: 20% by 2020 (IOUs)*10% by 2020 (co-ops & large munis)WI: requirement varies byutility; 10% by 2015 goalIL: 25% by 2025MO: 11% by 2020VT: RE meets loadgrowth by 2012☼ NC: 12.5% by 2021 (IOUs)10% by 2018 (co-ops & munis)ME: 30% by 200010% by 2017 - new RE☼ NH: 23.8% in 2025MA: 4% by 2009 +1% annual increaseRI: 16% by 2020CT: 23% by 2020☼ NY: 24% by 2013☼ NJ: 22.5% by 2021☼ PA: 18%¹ by 2020☼ MD: 9.5% in 2022☼ *DE: 20% by 2019☼ DC: 11% by 2022*VA: 12% by 2022HI: 20% by 2020TX: 5,880 MW by 2015☼ Minimum solar or customer-sited RE requirement* Increased credit for solar or customer-sited RE¹PA: 8% Tier I / 10% Tier II (includes non-renewables); SWH is a Tier II resourceState RPSState GoalDSIRE: www.dsireusa.org August 2007

“In my 44 years in the municipal utility business, no utility project has evergenerated more customer support and interest than our wind turbineproject.”Nick Scholer, former manager of Algona Municipal Utilities, Algona, Iowa

Wind energy is the fuel of today and tomorrow

“The future ain’t what it used to be.”- Yogi Berra

Note about Ohio.

Levelized Cost of Energy, $/MWh14012010080604020OnshoreClass 7Class 6Class 5Class 4Class 3OffshoreClass 7Class 6Class 5Class 4Class 310% AvailableTransmission0- 200 400 600 800 1,000Quantity Available, GW2010 Costs w/ PTC, $1,600/MW-mile, w/o Integration costs

What does 20% Wind look like?Cumulative Installed Capacity (GW)50045040035030025020015010050Cumulative Capacity (left scale)Annual Capacity (right scale)18161412108642Annual Installed Capacity (GW)02000 2006 2012 2018 2024 20300Source: AWEA 20% Vision

Conclusions• 20% wind energy penetration is possible• 20% penetration is not going to happen under businessas usual scenario• Policy choices will have a large impact on assessing thetiming and rate of achieving a 20% goal• Key Issues: market transformation, transmission, projectdiversity, technology development, policy, publicacceptance• 20% Vision action plan: Fall 2007Source: AWEA 20% Vision

“With public sentiment nothing can fail;without it, nothing can succeed.”- A. Lincoln

Carpe Ventemwww.windpoweringamerica.gov