Wind Power Is a Small but Growing Part of the Nation’s Electric Power Generation Capacity

Although wind power accounted for about one-tenth of 1 percent of total  U.S. electric power generation capacity in 2002, it had quadrupled in  generating capacity between 1990 and 2003, and has been growing at a  much higher rate than other sources of electric power generation. This rate also makes wind power the fastest  growing source of electric power generation, on a percentage basis, in the  United States in recent years. For example, from 1999 through 2003, the  average annual growth rate of wind power was 28 percent, and in 2003  alone, enough new wind turbines were erected to provide electricity to  400,000 to 500,000 U.S. homes. The nation’s wind potential—particularly in areas with frequent, strong  winds needed to generate electricity from wind power—remains largely  untapped. On average, wind power turbines  operate the equivalent of less than 40 percent of the peak hours in a year  due to the intermittency of wind. In contrast, fossil  fuel power plants are a significant source of air pollution. Wind Power Does Not Contribute Significantly to Total Farm Income, but Some Individual Farmers and Communities Have Benefited

Wind power does not currently contribute significantly to total farm  income in the 10 states with the highest installed wind power capacity,  although some individual farmers and rural communities have benefited  considerably from this energy source. However, wind projects located on  farmland have increased some individual farmers’ income significantly,  according to our site visits and analysis. Wind Power Accounts for Only a Very Small Amount of Total Farm Income, but Provides Substantial Income to Some Farmers and Communities

In the 10 states we examined, total net farm income exceeded $14 billion in  2002, but total direct income to all U.S. farmers from wind power ranged  from only $10 million to $45 million, representing only a fraction of 1  percent of net farm income in these states. Furthermore, according to DOE, increasing the proportion of the  nation’s energy generation attributable to wind power to 5 percent by 2020  would add about $60 billion in capital investment in rural America; provide  an estimated $1.2 billion in new income to farmers, Native Americans, and  rural landowners; and create approximately 80,000 new jobs. We found that farmers generally find  leasing their land for wind power projects to be easier than owning projects  because of the complexity of, and risk associated with, developing a wind  power project. USDA Can Do More to Promote Wind Power

USDA has not fully utilized all of the farm bill’s renewable energy  provisions to promote wind power development on farms and in rural  communities, although it has provided some funding through other  provisions of the farm bill. In particular, USDA had not issued a regulation  for loans and loan guarantees under the farm bill’s key wind power  assistance program—the Renewable Energy Systems and Energy  Efficiency Improvements Program (Renewable Energy Program). Many stakeholders consider the Renewable Energy Program as the key  USDA program for promoting renewable energy sources, including wind  power, on farms, ranches, or other rural lands. Table 6  summarizes the grant assistance provided for renewable energy projects,  including wind power, under the program in fiscal year 2003. There are no plans for  the group to meet again. Objectives, Scope, and Methodology

At the request of the Ranking Democratic Member, Senate Committee on  Agriculture, Nutrition, and Forestry, we agreed to examine (1) the amount  of wind power generation in relation to all U.S. electricity generation and  the prospects for wind power’s growth, (2) the contribution of wind power  generation to farmers’ income and to the economic well-being of rural  communities in the 10 states with the highest wind power generation  capacity, (3) the advantages and disadvantages for farmers and rural  communities of owning a wind power project or leasing their land to a  commercial wind power developer, and (4) the efforts of the U.S.  Department of Agriculture (USDA) to promote the development of wind  power on farms and in rural communities.
Why GAO Did This Study

Wind-generated electricity--wind power--has the potential to provide electricity to homes and businesses without causing air pollution or depleting nonrenewable resources, unlike electricity generated by fossil fuels (coal, natural gas, and oil). Furthermore, because wind power has no fuel costs--wind power depends on the energy of the wind--its operating costs are lower than the costs for power produced from fossil fuels, although its capital costs are greater. Wind power relies on frequent, strong winds to turn the blades of power-generating turbines. In the United States, a wind turbine with generating capacity of 2 megawatts (MW), placed on a tower situated on a farm, ranch, or other rural land, can generate enough electricity in a year--about 6 million kilowatt hours (kWh)--to serve the needs of 500 to 600 average U.S. households. In addition to environmental benefits, wind power has the potential to contribute significantly to America's growing energy needs while providing economic benefits to farms and communities in rural America. In this connection, the Department of Energy's (DOE) "Wind Powering America" program has set a goal of producing 5 percent of the nation's electricity from wind by 2020. DOE estimates that achieving this goal would add $60 billion in capital investment in rural America, provide $1.2 billion in new income for farmers and rural landowners, and create 80,000 new jobs by that year. Congress asked us to report on (1) the amount of wind power generation in relation to all U.S. electricity generation and the prospects for wind power's growth, (2) the contribution of wind power generation to farmers' income and to the economic well-being of rural communities in the 10 states with the highest wind power generation capacity, (3) the advantages and disadvantages for farmers of owning a wind power project versus leasing their land to a commercial wind power developer, and (4) the efforts of USDA to promote the development of wind power on farms and in rural communities.

What GAO Found

Nationwide, wind power accounted for only about one-tenth of 1 percent of total electric power generation capacity in 2003, and an even smaller percentage of electric power actually generated. However, U.S. wind power generating capacity quadrupled between 1990 and 2003--to 6,374 MW--and DOE has projected continued growth for this renewable power source through 2025. On a percentage basis, wind power capacity has been growing at a much higher rate than other sources of electric power generation--an average annual growth rate of 28 percent during the period 1999 through 2003. In addition, according to DOE, the U.S. Midwest theoretically has enough wind power potential to meet a significant portion of the nation's electricity needs; however, this potential remains largely untapped. Wind power does not currently contribute significantly to total farm income in the 10 states with the highest installed wind power capacity, but some individual farmers and rural communities have benefited considerably from this energy source. In these 10 states, net farm income was about $14 billion in 2002, but total direct income to farmers from wind power ranged from only $10 million to $45 million, representing a fraction of 1 percent of net farm income. However, wind projects located on farms have increased some individual farmers' income by tens of thousands of dollars annually. Farmers generally find leasing their land for wind power projects to be easier than owning projects. Leasing is easier because, unlike farmers, energy companies have the financial resources and legal and technical expertise to address the costs, complexity, tax advantages, and risks of wind power development. However, ownership may be more profitable than leasing. USDA has not fully utilized all of the farm bill's renewable energy provisions to promote wind power development on farms and in rural communities. For the Renewable Energy Systems and Energy Efficiency Improvements Program (Renewable Energy Program)--the key program for supporting wind power and other renewable energy initiatives--USDA offered grants totaling $7.4 million for 35 wind power projects in eight states in fiscal year 2003, the program's first year, but it has not implemented the loan and loan-guarantee components of the program. Without the latter, USDA has not fully fulfilled farm bill provisions and limits the ability of the program to promote renewable energy sources.