Smart money and smart people across the globe will undoubtedly find their way to the wind industry in the State of Illinois.  During the dog days of the summer of 2007, Illinois lawmakers enacted a legislative Act requiring the development of an electricity procurement plan for the state’s two colossal investor-owned utilities, and included within it a Renewable Portfolio Standard (RPS) that requires a heady number of those electrons procured to be generated by way of renewable energy sources.

The legislation builds in annual increases for renewables, requiring Commonwealth Edison and Ameren Illinois, which together serve about 95 percent of all Illinois power customers, to get at least ten percent of the power they supply from renewables by 2015 and, within fourteen years, to bump up that percentage to 25 percent.  In terms of aggregate power, these standards equate to a magnanimous shift in power generation within the state.  With approximately 60,000 gigawatt hours (GWh) currently delivered by the two utilities annually, renewable resources will, assuming modest growth in total consumption, account for an estimated 16,000 GWh consumed in the state by 2025.

While a pulmonary present to everyone living in the Land of Lincoln and neighboring states, the mint tucked into the policy’s pillow is reserved for the wind industry.  For all those watts courtesy of mater terra, a full 75 percent, or about 12,000 GWh of power consumed in Illinois in 2025, will come from wind.  To put this into context, there is only about 75,000 GWh of wind power currently generated per year across the entirety of the US.

The boon to Illinois’ wind industry is already apparent in the going rate for renewable energy certificates (RECs)--government sanctioned receipts, of sorts, which are provided to utilities (and others) as proof of power purchased from renewable sources of electricity.  According to the Illinois Power Agency, the average cost of an REC bought from a wind source last year in the state exceeded $30, while RECs purchased from other sources of renewable energy was closer $20.  The premium wind sources have been able to command is directly related to the energy legislation’s requirement that the overwhelming percentage of renewables must come from wind coupled with the stringent supply of wind capacity currently installed.

At the close of last year, the state had enough turbines built or near completion to generate roughly 2,500 GWh of power this year.  With a requirement that 5 percent of all power, or 2,250 GWh, delivered by the two large utilities come from wind by next year, this means nearly every existing and planned turbine in the state will need to pass its power through the two utilities to meet the RPS.

Compounding the economics for wind procurement, particularly as the proportion of renewable power procured is scheduled to grow over time, is the sheer amount of atmospheric wind the state receives.  Home to the Windy City, the state and its reputation as a gusty gulch is slightly overblown.  According to the American Wind Energy Association, Illinois has a total of just under 20,000 GWh worth of usable energy generated by wind per year—this takes into consideration the days wind speeds are low or nil.  (For purposes of comparison, Wyoming has close to 200,000 GWh and Texas has nearly 400,000 GWh of potential wind power per year.)  As noted above, however, the Illinois legislation calls for roughly 12,000 GWh by 2025, effectively mandating that more than half of all of the state’s wind resources will need to be up and running at full throttle within less than one and one half decades in order to meet the RPS standard.

While the ambition of the Illinois RPS may cause some to pause, many more—those smart folks in the wind industry--have jumped at the opportunity the legislation has created.  Illinois already ranks eighth in the nation for installed wind capacity and is home to several wind developers and manufacturers, including Wind Capital Group, Invenergy, Midwest Wind Energy and, among others, Suzlon.  With their backs against the wind, these companies have inherited the early lead.

William Olson is a regional economist and energy policy analyst.  He lives in Schaumburg, Illinois.