Discuss the importance of wind energy in gaining energy self-sufficiency.

Explain the role of government regulations in achieving this purpose. A move in the Right direction The energy situation of the 1970s was the trigger that prompted governments to sit up and take a stock of their energy security situation. The energy crises of the mid 70s had severe economic repercussions on most of the nations world wide, and particularly so on the more industrialised nations. To offset the negative impact of the large fossil fuel import bill, governments were forced to take a serious and benevolent look at renewable energy sources. In Europe, for example, energy import dependence is significant. Imports account for 50% of EU energy consumption today and are expected to rise to 70% by 2020, in the absence of effective alternatives.i While it is not doubtful that massive industrialisation in the last century has been achieved primarily on the strength of carbon fuels, it is also a fact that this has driven many countries into an unhealthy dependency on foreign energy sources. For various reasons, we can not continue to rely on the sustained availability of fossil fuels for the distant future: oil left in the ground (including land and sea) is getting increasingly difficult to extract, gas flaring, a necessary step in oil extraction process, is a significant contributor to green house gas emissions the offshore industry, engaged in oil exploration and productions, is supported by ageing infrastructure.

Simultaneously, the awareness of the detrimental effect on the environment of carbon fuels was on the rise a perfect catalyst for governments reactions and approaches towards renewable energy. By early 1990s, commitment to the environment had crystalised the shift towards noncarbon fuels by most of the responsible governments worldwide. Most energy and economic policies globally are carbon centric. It is the same carbon that converts into carbon-dioxide and methane and forms the core of the climate change scenario. Most of the carbon emissions come from energy consumption, and production and transportation. The capacity of the worlds ecosystems to absorb carbon has decreased by 5% over the past 40 years, and for the oceans alone the decline is closer to 16%. The resilience of our ecosystems is definitely under pressure. In order to meet their commitments for reduction of ghg emissions under the Kyoto Protocol, majority of the responsible governments are left with two primary energy technology options: 1. reduce energy demand by improving efficiency of consumption and then lower consumption through conservation measures, 2. adopt renewable energy sources that such that these can markedly alter the profile of energy usage and supply Considering the growing energy demands, coupled with falling oil resources and increasing deterioration of the environment being caused by fossil fuel emissions, there is no alternative left for industrialised nations and large energy consumers like India and China, than to shift towards

renewable energy. Renewables, particularly wind energy, can play a defining role in reducing greenhouse gas emissions and securing energy supply. A demand forecast by International Energy Agency (IEA) indicates a requirement of close to 120 million barrels of oil per day by 2030. Same report also finds that the peak of oil production has already been reached in 2006. Studies by the Environmental Working Group (EWG) show a foreseeable scarcity, which will occur much earlier than assumed up to now. Conventional energy resources are depleting very fast and their prices going up very rapidly. The economy and prosperity of most nations is severely endangered if positive steps are not taken now. Other EWG reports also indicate that renewable energies can fill the gap much faster and to a much larger extent that has been predicted till recently. In USA, in 2006 President Bush emphasised the nations need for greater energy efficiency and more diversified energy sources This led to a collaborative effort to explore alternative energy supply sources in which wind provides 20% of U.S electricity by 2030. Support for wind energy enhances energy independence, promotes rural development, contributes to price stability and helps address global climate change. By the end of the year 2008, 120 Gigawatt of wind power capacity were installed worldwide, after 94 Gigawatt by the end of 2007. Already today wind provides more than 1.5 % of the global electricity consumption and the wind industry employs half a million people. Currently, 80 countries are using wind energy on a commercial basis, with the main shares in Germany, USA, Spain, China and India which still account for three quarters of the global wind installations.ii Market research company SBI (Specialists in Business Information) estimates that the total wind energy market in the U.S. is valued at $151.3 billion. By 2013, SBI projects that the total U.S. market value for wind energy will reach an estimated $180 billion, representing a compounded annual growth rate of 3% for the five-year period starting in 2009.iii The U.S. wind industry expanded rapidly in 2008 fueled by three key market drivers:

Very high fossil fuel and oil prices, and rising Long-term demand for renewable energy sources now becoming a reality Improvements in technology manufacturing of wind turbines Enhanced employment opportunities in turbine manufacturing sector

At the end of 2008, the Canadian Wind Energy Association (CanWEA) has declared that Canada has officially become the 12th country in the world to surpass 2,000 megawatts (MW) of installed wind energy capacity. Wind presently supplies approximately 1 percent of Canada's electricity demand.iv Wind energy reduces reliance on foreign energy sources from politically unstable regions. As an energy source, wind requires no imported fuel, and the turbine components can be either produced domestically or imported from any friendly nation with production capabilities. This is a major step towards gaining energy self-sufficiency and security. Continued reliance on natural gas for new power generation is likely to put many countries in the awkward position of having to rely on, or partner with, countries of doubtful integrity or political history. There is broad and growing recognition that countries should diversify their energy sources so

that a supply disruption affecting a single energy source will not significantly disrupt the national economy. Developing domestic energy sources with known and stable costs would significantly improve a nations energy stability and security. What are the Governments up to?

Unlike the government, individual companies feel little or no obligation to address long-term energy security or environment challenge concerns. It is therefore the responsibility of governments to ensure that the markets respond to these concerns. Governments need to appreciate the value of environmental and security benefits of renewable energies, and to set, through legislative frameworks, the long term price signals for industry development that would help to reap these benefits. Governments are relying on a combination of five primary policy instruments for the promotion of wind energy:

Direct investment in R&D; Direct subsidies; Government-sponsored loans; Tax allowances; Subsidies for operational costs/feed-in tariffs

In the United States, the renewable energy production tax credit (PTC), a credit of 2.1 cents per kilowatt-hour, is the primary government incentive for wind energy and has been essential to the industrys growth. Other electricity generation technologies have their own forms of government support, so wind power would be disadvantaged in the absence of PTC or other similar incentives. Many American states also provide incentives, such as exemption from property tax, mandated purchases, and additional tax benefits. Countries such as Canada and Germany also provide incentives for wind turbine construction, such as tax credits or minimum purchase prices for wind generation, with assured access to the existing electricity networks (also called feed-in tariffs). These feed-in tariffs are typically set well above average electricity prices. Exploiting America's renewable energy sources is a priority for President-elect Barack Obama. American businesses and consumers are waiting for the Presidents lead to make the USA. a greener and more energy secure nation. (During a campaign speech, Obama declared his intentions to wean American off its dependence on Middle Eastern oil by investing $15 billion a year in renewable energy to create 5 million new energy jobs over the next decade). President-elect Obama has outlined a range of policies that would encourage investments in wind and renewables: extending the PTC for a longer term (it expires at the end of 2009) expected period is 5 years establishing a national renewable electricity standard (RES) with a target of generating at least 25% of the nations electricity from renewables by 2025, and a near-term target of 10% by 2012 strong national climate change legislation that will necessarily shift focus towards greater use of wind energy.

In India, the Government:

following financial and promotional incentives are available from the Central Concessional import duty on specified wind turbine parts 80 percent accelerated depreciation Customs and Excise duty relief Loans through IREDA Tax holiday for power generation projects

Today, India has among the world's largest programme for deployment of renewable energy products and systems. It is also the only country in the world to have a separate Ministry for Nonconventional Energy Sources. The Indian Renewable Energy Development Agency (IREDA) is the only agency of it's kind in the world to finance renewable energy projects. In the State of New Jersey in USA, new rules have been formulated that will greatly expand the territory in which developers can build offshore wind parks. Until now, such projects were only allowed in shallow watersthose within 3.5 miles (5.6 kilometers) of shore. The new rules would allow them in the outer continental shelf, which extend about 230 miles (200 nautical miles, or 370 kilometers) out. Having wind farms out in the open sea is a distinct advantage over the currently prevailing situation. Wind projects in shallow waters are visible from shore and can interfere with shipping routes and recreational water sports. Turbines often have to be smaller and fewer to minimize these impacts, leading to less profitable projects. Using the outer continental shelf may solve some of these problems and open a tremendous energy resource. Researchers at the National Renewable Energy Laboratory (NREL) in Golden, Colorado., estimate that the wind in this territory could generate nearly 1000 gigawattsa little more than the current U.S. electrical capacity. In assessing the success of any renewable energy policy, the governments need to examine performance of the entire renewable energy portfolio under the following three criteria: effectiveness of wind energy source in reducing GHG emissions effect of wind policy on technological advance it should not be so that alternative technology is adopted only because it is market driven. Such adoption may occur at the expense of R&D effectiveness of policy in promoting renewable technology exports and economic competitiveness.

The case of wind in Japan is instructive, as it shows how renewable energy can stumble without proper government support. Renewable targets the government has set for wind power are tiny in comparison to other countries. 1.35 percent of Japans total energy supply must come from renewables, such as wind, solar, and biofuels, by 2010. The target goes up to 1.63 percent by 2014. These are minuscule targets compared to other industrialised nations. There are no incentives for companies to grow in the renewable energy sector. Its especially significant given that Japan previously had been a green policy leader.

In most countries, governments provide subsidies to companies developing alternative energy sources. But several analysts are of the opinion that subsidies may cause production inefficiencies. How can governments tackle the situation and promote non-conventional sources of energy? How much, to whom, how and for how long these are the questions to ask. Not Why. Energy subsidies worldwide result in a lower price for fossil fuels to end users, such that they cause more of those fuels to be consumed, increasing carbon-dioxide and other greenhouse-gas emissions and contributing to climate change. Empirical studies suggest that the potential emissions reductions from removing all subsidies that encourage fossil energy consumption could be substantial. Moreover, such a move could bring major economic benefits too. In many cases, the social costs of eliminating those subsidies would be small. Continuous government subsidies for the last several decades have created an abundance of affordable energy, powering the economic growth of most nations world wide. However, this these subsidies have also created an addiction to fossil fuels and an undiversified energy mix, leaving most countries at a serious risk of energy security. Todays rising demands, volatile prices, and concern surrounding climate change reveal a need for a cleaner source of energy supply. Wind energy will become an increasingly important energy source across the globe. Every energy technology is supported by every government. Wind energy is no exception, nor should it be. Most forms of energy production create some sort of negative associated costs: costs that are not paid by the producer or consumer of the good. For electric production, the most significant such cost is pollution, which imposes a number of hidden costs such as increased healthcare expenses, reduced agricultural productivity, and other problems. In addition, carbon dioxide, may impose even greater costs in the form of global warming. Few mechanisms currently exist to actually calculate these costs, and the total cost is highly uncertain. Other significant hidden costs can include military expenditures to ensure access to fossil fuels, restoration of polluted sites (Taj Mahal ?), destruction of wild habitat, loss of tourism, etc. If the hidden external costs are taken into account, wind energy can be competitive in most cases. The costs associated with bringing wind farms on-line have generally decreased due to technology development and scale enlargement. Once external costs and subsidies to other forms of electrical production are accounted for, wind energy is amongst the least costly forms of electrical production. The commercial viability of wind power also depends on the pricing structure offered to power producers. Electricity prices are highly regulated worldwide, and in many countries or states, may not reflect the full cost of production. Wind energy benefits from subsidies of various kinds in most countries, either to increase its attractiveness, or to compensate for subsidies received by other forms of energy. From an environmental perspective, the level of support to fossil fuels remains high. Wind energy is a much less mature industry and therefore requires greater technological and market support. Most subsidies for energy go to already mature industries: oil & gas, coal and nuclear power. There is no "free market" in the zone of energy supply. Fossil fuels and nuclear power continue to do well because massive subsidies bring down the costs associated with these energies . On the other hand, despite these inequalities, wind energy has grown significantly in recent years, despite

the relatively low subsidies it receives. Wind is a viable technology that can well compete with the best out there currently though it is playing on a very uneven field. We also need to examine here the purpose of subsidies for energy technology. On the positive side, these subsidies are investments in promising technologies that haven't reached a point of development to compete with established industries. On the negative side, these very subsidies tend to suppress these newer technologies. Its not that wind energy as a technology that is not viable its just that a strong political and social will is needed to follow an uncharted path. To face the long-term problem of global warming we need to look very closely at our immediate reality.. The current global recession is a reality that will make life harder for almost everyone. So, moving ahead, there are opportunities to utilize a method that both cuts costs and lowers greenhouse gas emissions energy efficiency. In USA, energy efficiency has lowered oil consumption by more than 5% in 2008, while the coal and natural gas demand being the same as what it was in 2007. This lower overall fossil fuel use translated into greenhouse gas emissions (GHGs) that are about 2.5% below the 2007 level. If efficiency is further improved, emissions can be cut further in this year. Government support to renewable energies, including wind, is still considerable less that that to fossil fuels. According to 2004 figures, two thirds of the energy subsides in EU-15 (almost 22 billion Euros) go to support fossil fuel production and consumption, while 1/6 (or 5 billion Euros) goes to support renewable energies.v According to study by the Energy Information Administration (EIA) in USA, wind accounted for 35% of all new electricity capacity installed in 2007, but it received approximately 13% of government electricity support. On the contrary, no new nuclear electricity capacity was installed, yet 23% of government electricity support went toward nuclear power. Coal accounted for approximately 7% of the new capacity in 2007, yet received nearly 55% of the government electricity support, according to EIA.vi In Canada. electricity prices do not reflect the environmental and health impacts associated with the different ways of producing power. This is nothing but an indirect subsidy of those electricity generating sources that produce such (adverse) impacts. While these costs are not currently reflected on electricity bills for consumers, they are real costs that are borne by consumers in other parts of society (reduced capital available for social empowerment). As a result, consumers believe conventional sources of electricity are cheaper than they really are. The need of the hour is to have policies that will put a price on the damage electricity production causes to the air, water and land. Simultaneously, a reward system needs to be in place for green energy producers. There is a long history of strategic government support to new and developing industries. For instance, government incentives have played an important role in the development of aerospace, nuclear and auto industries world wide Without that support, these sectors would not have seen the levels of success they have attained. Wind energy should not be an exception. However, governments that offer subsidies, tax rebates and other incentives to lower production costs serve as a magnet for investment. This is certainly the case in wind energy equipment manufacturing where governments around the world have recognized that subsidies certainly help to boost equipment sales. Simultaneously, a large number of green collar jobs are created. Critics of wind energy claim that it is inferior in some aspects to other competing forms of energy generation. It is said to cause transmission problems (connecting to the grid as wind energy

output necessarily fluctuates over the course of a day), to be more expensive than fossil fuel (technology not fully mature yet), to have a limited global potential (wind speed profile is not uniform world wide), and to represent a high cost to society (aesthetics, constant hum of wind generators, dangerous to the avian population particularly the migratory owls). This last critique has now been contradicted by GE Energy Financial Services. Their study Impact of 2007 Wind Farms on US Treasury concludes that the financial incentive for wind energy by the US government has a positive Internal Rate of Return (IRR) of approximately 5%. GE study might have a large margin of error, but one could at least conclude from it that the US incentives do not represent a high cost for the government and probably are even a good investment on the part of the government. That in itself is indeed quite an achievement in financial terms, considering that the ultimate goal is to reduce greenhouse gas emissions. Wind turbines are a relatively new technology facing an established fossil fuel industry and so need all the help they can get to get going. The reality is that climate change is the biggest threat humanity has faced. We need every bit of green energy we can get. Subsidies have to be very carefully structured to cover the difference between the prevailing rate of a competitive technology and that of the new technology. A sustainable subsidy model needs to be built, that steadily declines over time. In other words, the best subsidies are sustainable - not too high and not too low, so they can give the market some stability. (too much subsidy for too long tends to bankrupt the government) To ensure that the principles of sustainable development are at the core of all energy decisions, the true costs and benefits of utilising each energy source must be properly understood. This is important so that we do not end up eliminating the good for the sake of a lower unit price in the short term. Today the world has a target of limiting a global temperature increase to 2C. If the world is realistic about achieving this, the energy policies of the major governments have to change. A perfect example of the success of alternative energy is that of the Thisted municipality in Denmark. This community has achieved over 100 per cent of its power consumption, and more than 80 per cent of its heat consumption, without the use of fossil fuels. Sir Nicholas Sternvii, former Chief Economist World Bank and Head of the Government Economic Service UK, has mentioned in StrenReview (a report on the economic challenges of climate change) that clean energy is proving to be a convenient policy tool, as it address four major issues; energy security, the economy, unemployment and climate change The Stern Report further adds that failing to act against the climate crisis "...could shrink the global economy by 20%. The report estimates that taking action will cost only 1% of the world GDP viii. According to Stern, the economic drain of global warming would come from:

Floods from rising sea levels could displace up to 100 million people Melting glaciers could cause water shortages for 1 in 6 of the world's population Wildlife will be harmed; at worst up to 40% of species could become extinct Droughts may create tens or even hundreds of millions of "climate refugees"

1% of global GDP must be spent on tackling climate change immediately (and this needs to be viewed as investment, not expenditure) - roughly what the world spends annually on advertising The core issue here is environment. That fossil fuels are anti-environment is not contested any more. Therefore an alternative clean energy source, that is also sustainable, is to be found, developed and used extensively. The debate is more on what would be the cost of developing such a system and will it ever be as cost efficient as fossil fuels. Or will we sink money into unproductive, inefficient technologies and make life harder generally for everyone on the planet? The answer perhaps is Yes, we need renewable, clean energy sources even at the cost of temporary pain. And the faster we develop these sources, the better it is for humanity as large. Mankinds commitment to a post carbon economy via a shift towards sustainable renewable energy will be essential for energy security and tackling climate change.

http://www.globalchange.umd.edu http://www.wwindea.org iii http://www.msnbc.msn.com/id/28576533/ iv http://www.renewableenergyworld.com v 2004 Figures, http://www.eea.europa.eu vi As reported by AWEA vii Currently IG Patel Professor at the London School of Economics and Political Science (LSE). viii The BBC (via the Daily Grist)
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