Idaho's Wind Energy Policy
Wind power is a renewable energy source that has faced contention in Idaho, but that has huge benefits for consumers and society. The problems originate from the government policies that require grid operators to purchase a set amount of wind energy at a peak-price, even in off-peak hours. This research aims to find a solution(s) to this problem. In order to make wind energy cost effective for all parties involved—wind energy producers, grid operators, and electricity consumers—we have determined three policy options Idaho should implement. First, Idaho needs to continue to subsidize upfront costs for wind farms. The amount of subsidization needs to be calculated to include the opportunity cost of installing a wind farm as well. Second, it is fundamental to the future of wind energy that Idaho invests in research and development in wind energy to make the production of wind energy more efficient and to find cost effective ways to store wind energy. Third, it is imperative that a new pricing structure for wind energy is calculated. The most efficient means to do this seems to be real-time pricing. Essentially, this would mean that the price grid operators pay for wind energy is continually fluctuating to reflect the changing relationship between supply and demand. When the demand for energy is high, and the supply of wind energy is also high, then the grid operator will pay a premium price for the energy. But when the demand is low and supply is high, the grid operator will pay a price that reflects the changed equilibrium. This would be most efficient for all parties involved.