September 25, 2017

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WESEP: Wind Energy Science, Engineering, and Policy

Wind Economics, Policy, and Public Perception

Thrust Goal and Connection to Project Objectives

The goal of this thrust is to increase understanding of the magnitude of the economic and social benefits and costs of expanded wind development, to examine alternative policies that can lead to maximum social benefits from wind energy, and to develop communication and public participation strategies that can increase the probability that welfare-improving policies are   adopted and implemented. By identifying how and when expanded wind energy improves social welfare, this thrust supports RO1 and RO3 giving the public and policy makers a rationale for identifying socially efficient productions levels of wind energy.  Through improved communication and participation strategies, RO2 is supported by decreasing the cost of gaining regulatory approval for welfare-increasing wind projects.

Background and Need for Research

Wind energy build-out in intensely managed agricultural areas will be driven by public policy initiatives, economic incentives (wind leases in relation to conventional crops, bioenergy crops, carbon mitigation and conservation strategies), and environmental and social factors (patriotic, cultural, and family legacy land ownership). Consequently, students will be expected to integrate a socio-economic and political assessment of wind power development into their educational and research program. This will include developing their understanding of a) wind markets and public policy; b) individual and community attitudes and perceptions towards wind energy and, c) communication, policy and planning initiatives that may increase local benefits and mitigate unintended consequences (externalities) and public resistance to wind farm expansion.

Dissertation Project Examples

Markets and public policy: The current mix of fuels and types of power plants used to generate U.S. electricity reflects both market forces and policy choices. That almost half of U.S. electricity was generated from coal in 2008 reflects coal’s low cost. Wind energy’s share of generated electricity in 2008 was 1.3%. Although small, wind energy’s share is growing rapidly, thanks to favorable investment tax credits and state renewable portfolio standards. Government policy is the key factor that will determine how the U.S. changes the national energy portfolio in the face of tradeoffs between the cost competitiveness of fossil fuels and the environmental and social benefits of renewable energy resources. The existing climate change initiative regulatory landscape is a patchwork of 4 categories of policies: mandates (such as renewable portfolio standard), incentives (production/investment tax credits), markets (cap-and-trade), and voluntary programs (green energy premium). How wind power can be integrated into existing electricity markets is also a challenge due to the inherent temporal variability of wind power’s availability and the benefit of pre-scheduling generators to meet peak loads. New types of contracts and pricing mechanisms may be needed to facilitate wind energy integration into electricity markets. To reduce potential conflicts and uncertainties and increase net benefits from these and other proposed policies designed to increase wind energy, we will examine relationships between various electricity market structures and public policy.

Public acceptance and unintended consequences: Public surveys show that support for wind energy is high. For example, attitudinal data from a 2008 MIT Energy Survey showed that people favor wind a priori and that a substantial majority of Americans support local siting of wind facilities. Yet, studies have also demonstrated that this support declines significantly at the local level when specific initiatives are proposed. Since local opposition may delay or even prevent the development of wind energy, it is critical to consider individual and community attitudes and perceptions toward wind farm implementation and develop their ability to assess communication, policy, and planning initiatives that can mitigate local concerns. In Iowa, the best wind power resources are in areas with small rural communities and family-run farms that grow primarily corn and soybeans. An additional 25,000 wind turbines will potentially affect community vitality and the cost of producing row crops. Designing innovative policies that address local concerns while achieving national goals of expanded wind power will be a major effort of this research thrust. To help accomplish this, an assessment of the intended and unintended socio-economic and environmental impacts of wind turbine development on local communities is necessary to ensure a sustainable and equitable distribution of costs and benefits. We will conduct a multi-state survey to determine people’s knowledge regarding wind energy, what misconceptions are held about wind, and its perceived disadvantages. This study will also employ nonmarket valuation techniques to estimate the economic costs of the unintended consequences (both positive and negative) associated with the local production of wind power. The results of this survey will help determine effective communication and planning strategies and test fundamental hypotheses concerning local and global externalities from wind power generation.

Public resistance to transmission: Abundant wind power resources are located in the U.S. Midwest, but most of the electricity will be consumed on the coasts. New interstate high-voltage transmission lines are needed before wind can substitute for coal. Obtaining the right-of-way for the lines is a major problem because of local resistance to power lines that do not serve local electricity demand. We will explore relationships between government policy, public resistance, new transmission technologies, and various routing paths to identify effective socially efficient means to move large amounts of wind energy from the Midwest to the East and West coasts.

Mental models research to identify information needs for wind energy expansion: Reconciling the tradeoffs between the risks and benefits of wind energy is contingent upon informed, directed, and two-way communication between experts and stakeholders. To aid in the design of such a communication effort, we will apply the mental models approach to determine the unique information and decision-making needs of stakeholders residing near potential wind farm sites. Based on the notion that people tend to assemble their knowledge of risks into a conceptual map of ideas, the goal of this approach is to identify misconceptions and important gaps in understanding on the part of both experts and nonexperts, and contribute to the development of a more efficient and effective risk communication process.

Characterizing the public’s perception of risks related to wind energy: Research within what has been called the psychometric paradigm has explored the ability of psychophysical scaling methods and multivariate analysis to produce meaningful representations of risk attitudes and perceptions. This study will ask people to judge the current riskiness (or safety) of wind energy based on what are called “outrage factors” (i.e., perception of risk is greater for innovations whose adverse effects may be seen as uncontrollable, dreadful, catastrophic, not offset by compensating benefits, and delayed in time so the risks are borne by future generations). Respondents also will be asked to indicate their desires for risk reduction and regulation of perceived hazards. The goal is to identify similarities and differences among groups with regard to risk perceptions and attitudes related to wind energy to inform potential communication strategies and efforts.

Communication with different stakeholder groups: Communicating with technical and political stakeholder groups will help ensure that the pace and ultimate scale of any expansion takes place at an optimal level. Expanding too rapidly may disrupt electricity markets whereas too slow or an inadequate scale of expansion may increase the cost of meeting greenhouse gas reduction objectives to unacceptable levels. In addition, information campaigns are an important means for reassuring the public regarding, for example, perceived environmental harms. However, the assumption that public support can be created or increased via information campaigns alone is problematic since it erroneously assumes that critics lack relevant knowledge and are responding emotionally or illogically. Instead, wind projects are more likely to gain high levels of public acceptance when there is a high level of public participation and collaboration in the process. We will consider how developers can collaborate with the public to provide locals with an opportunity to become invested in wind projects.

Key Faculty