168 



cover a wide range and are very project specific. The numbers below are ranges for an 

 initial, commercial-scale project of average resource quality and 20- year financing. A 

 minimum commercial scale project is generally 25 MW for wind, and 30 MW for 

 geothermal. The low range of costs for wind projects include the tax credits, while the 

 high range value excludes the credits. 



Resource Costs (0/kWh) 



Average Lifetime First Year 



(real 1995$) (nominal) 



Wind 3.1-4.2 5.0-6.5 



Geothermal 3.9 - 5.1 5.0 - 8.0 



The 



vjcuuicniiai j.y - j.i j.v - o.u 



4. c)What are the best ways to promote development of renewable energy resources? T\ 

 following is a partial list of activities that could promote renewable energy development. 



'The analysis considered demand growth based on Council's medium 

 projections, the need for replacement power for retired plants (e.g. Trojan), 

 and developers' assessment of what defines a piinimum critical mass for a 

 competitive market. 



^Source: 1991 Council Power Plan; Vol. II, Part 2. Chapter 10. Per a 

 conversation wiih Jeff King, Senior Analyst at the Council, the most 

 reprc.sentaiivc scenario for today's realities was the scenario that assumed no 

 new coal or nuclear plants and considered medium high load growth. 

 Referencing the medium high growth, in effect, takes into consideration the 

 need for replacing Trojan's output. 



• Build regional capability by implementing current renewable energy commitments and 

 RFPs. This would include BPA's 4 pilot projects, PGE's green FLFP, and the 

 Columbia Hills wind project. 



• A NPPC established regional, and utility-specific, renewable megawatt goal or 

 assignment in order to build a broad base of experience and make sure all share in the 

 effort. This set aside would be based on the environmental and portfolio benefits of 

 renewables. 



• Specifically account for environmental costs in the selection of resource options. 

 Provide a required mechanism to internalize the unaccounted costs of pollution and lost 

 habitat. 



• Require the use of renewable RFPs by utilities in resource selection. 



• Define renewables as clear and verifiable ways to obtain Clean Air Act credits. 



• Continue to promote effective competition at the wholesale level making sure that 

 utilities face the same rules as independent power producers. 



• Continue to promote more open and fair transmission access, prioritizing access to 

 renewables. 



• Continue the lOU wind production tax credit, and establish a longer-term, stable 

 appropriation for public utilities' production credit. 



• Lower or eliminate the royalty tax on steam for geothermal energy. The payment is 

 based on 10% of the value of the steam used in geothermal plants and contributes 5% in 

 additional costs. 



• Ensure that deregulation of the electrical market does not mean the loss of 

 environmental protection. FERC should allow States to include environmental and 

 consumer protection in their regulation of retail and wholesale utilities. 



• Set a small ( 1 mill) wire charge for each unit (kWh) of electricity sold to establish a 

 fund to renewable energy development. Developments would have to competitively bid 

 for the financing to make sure that the most cost effective projects are built. This would 

 be similar to the current British system to promote non-fossil alternatives. 



Have BPA do its four pilot projects as condition for corporation or debt restructuring 

 legislation. This would retain the limited base in the Northwest and keep half of the 

 current market alive. 



• Encourage State regulators to work widi utilities to overcome the local barriers to 

 utilities. In particular, encourage the States to create clear recovery mechanisms for 

 utilities that invest in renewables as the markets deregulate. 



