Wind Energy Development

In Illinois

William S. HaasEnergy Division Representative

Overview

• Illinois Energy Context• Illinois Wind Resource• Renewable Portfolio Standard• Financial Incentives• Conclusion

City of Chicago Global Warming Task Force: Increasing Number of Days with Tmax > 90oF

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Hayhoe, K., D. Wuebbles et al. 2008. Climate Change and Chicago: Projections and Potential Impacts. A report for the City of Chicago, 151 pp.

City of Chicago Global Warming Task Force: Increasing Number of Days with Tmax > 100oF

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Hayhoe, K., D. Wuebbles et al. 2008. Climate Change and Chicago: Projections and Potential Impacts. A report for the City of Chicago, 151 pp.

Illinois Energy ContextElectric Profile

Energy Source Percent TotalCoal 49.44%Petroleum 0.05%Natural Gas 1.63%Nuclear 47.98%Hydroelectric 0.08%Other Renewables 0.83%

2006 Data from the Energy Information Administration

Illinois Energy ContextLooking Back

• Illinois lacked a well-established renewable energy and energy efficiency infrastructure– 0.5% of energy generated by renewables– Annual state energy efficiency funding was only $3 million– Utilities with energy surplus lacked impetus for energy efficiency

• Until 2007, the Illinois Commerce Commission and policy makers focused on rates, deregulation and restructuring, and not on reducing costs by utilizing renewables and incorporating efficiency

Illinois Energy ContextLooking Forward

• Increasing energy demand with continued dependence on imported energy sources

• Rising fossil fuel prices that will significantly impact electricity rates in Illinois

• Transmission constraints, increasing cost of new transmission and aging distribution systems

• A deregulated and restructured electric market

Where is Illinois Heading?

• Diversify Illinois generation to reduce dependence on fossil fuels

• Hedge a portion of energy consumption against likely future fossil fuel price volatility

• Provide Illinois consumers with tools to use energy smarter and more efficiently

• View renewables and efficiency as valuable resources to mitigate higher energy costs and deliver both economic and environmental benefits

Mendota Hills Wind Farm (50.4 MW)Photo Credit: Jennifer Zimmerman

Wind Energy Benefits• Diversify the predominantly coal and nuclear energy

profile in Illinois and provide a hedge against rising energy costs

• Every megawatt of installed wind capacity generates $1.7 million of investment

• Renewable energy projects such as wind development contribute significantly to the local tax base

• Each wind turbine can provide $2,000-$4,000 per year in lease payments thereby diversifying the income of farmers, ranchers and other landowners

Illinois Wind Resource

Renewable Portfolio Standard

• An escalating percentage of supplied electricity be derived from a renewable source

• Tracks Governor Blagojevich’s Energy Independence Plan

• At least 2 percent by 2008 rising to 10 percent by 2015 and increasing by at least 1.5 percent each year thereafter to at least 25 percent by 2025

• At least 75 percent from wind generation• Penalties for non-compliance

Renewable Portfolio Standard

• The RPS will bring over $17 billion in new investment by 2025. Every megawatt of installed wind capacity generates approximately $1.7 million of investment

• Renewable energy projects such as wind development contribute significantly to the local tax base

2006 Wind Capacity

2007 Wind Capacity

Renewable Energy Resources Program (RERP)

• Renewable Energy, Energy Efficiency, and Coal Resources Development Law of 1997 (20 ILCS 687)– Provides funding mechanism for the Renewable

Energy Resources Program– Directs DCEO to administer grants, loans, and

other incentives to foster investment in and the development and use of renewable energy resources

Renewable Energy ProgramsWind Energy Development Program

• Provides a grant for eligible project costs related to a utility scale wind installation

• Projects involve providing assistance for the development of new wind production projects that will increase domestic renewable energy production and improve the economy of the State through new business development

• Examples include the development of business plans, engineering designs and drawings, advanced market studies and financial analyses, technical assistance, and other business development activities

Illinois Enterprise Zone Program

• Designed to stimulate economic growth and neighborhood revitalization in economically depressed areas of the state

• Accomplished through state and local tax incentives, regulatory relief, and improved governmental services

Conclusion• Increasing energy costs are a driver of public

policy and programs that promote the development and expansion of alternative energy

• Illinois has a significant available wind resource, over 9000 MW of developable capacity

• With over 3400 MW of new projects under development in Illinois, new investments would total $5.7 billion

• Alternative energy tipping point – where the rate of development and utilization will increase dramatically

ContactWilliam S. HaasEnergy Division RepresentativeDepartment of Commerce and Economic OpportunityJames R. Thompson Center100 W. Randolph, Suite 3-400Chicago, Illinois 60601william.haas@illinois.gov312-814-4763 (voice)312-814-1800 (fax)