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The wind is an increasingly significant source of energy with the rising price of non-renewable fuels. The purpose of this project is to determine the specific intensity and frequency of wind speed required to sustain a large-scale wind farm with power output on the order of hundreds of megawatts. To this end, a non-deterministic methodology will be developed to analyze the viability of wind energy systems. A deterministic analysis method considers the majority of design parameters to be known or fixed and may only perform trade studies on a few parameters at a time to optimize performance. In the case of the energy market though, this is not an advantageous strategy since several factors related to economic viability such as energy prices, interest rates, government incentives, acquisition costs and maintenance are highly variable and cannot be assumed to be known. A non-deterministic, statistical approach to wind turbine design has the advantage of predicting with corresponding levels of certainty the power output and economic viability of an energy system. The primary goal of this project is to define the envelope of operating conditions for a large-scale wind project while considering variables of both engineering and economic significance. The National Renewable Energy Laboratory’s (NREL) Hybrid Optimization Model for Electric Renewables (HOMER) will be incorporated into the previous analysis using YawDyn and PROPID to determine the economic returns on investment in hypothetical financing cases. Cost factors will now be assigned a mean value along with a probability distribution. Monte Carlo simulations will be run for a large number of variations in the assumed economic and engineering variables to develop an accurate estimate of the price per kilowatt-hour of energy produced from the simulated wind project for a variety of site conditions with the goal of finding the most suitable environment for sustainable wind development.

Biofuels are prominent in current discussion both as a solution to problems and as a creator of problems. They have promise as a substitute for fossil fuels, particularly for petroleum as the raw material for transportation fuel. But biofuels also have pitfalls, especially when produced at a scale sufficient to replace a significant proportion of the world's use of petroleum. The articles in this special issue analyze key aspects of both the promise and pitfalls of biofuels. They address issues in the technology of producing raw materials for biofuels and converting these raw materials into fuel, resource constraints facing expansion of biofuel production, and the demand for fuels. Particular attention is paid to the relationship between expanded biofuel production and the cost of food. The economics of biofuels is inherently linked to policy issues as well as market analysis because biofuels in every country have received subsidies from governments. Consequently several articles address the welfare economics of governmental efforts to promote biofuels, with a focus on U.S. ethanol subsidies. These subsidies generate net social losses (deadweight costs) on a global scale, although not necessarily from the U.S. national viewpoint. Governmental promotion of biofuels can be justified on the grounds of externalities created by the use of fossil fuels, most notably in recent debates on global warming caused by the release of sequestered carbon in the form of carbon dioxide. This justification is weakened and perhaps even nullified by externalities in the production and use of biofuels. The articles in this issue consider a range of topics concerning these matters, and the welfare losses caused by biofuel subsidies absent net environmental gains from biofuels.

The price of delivered electricity will rise if generators have to pay for carbon dioxide emissions through an implicit or explicit mechanism. There are two main effects that a substantial price on CO2 emissions would have in the short run (before the generation fleet changes significantly). First, consumers would react to increased price by buying less, described by their price elasticity of demand. Second, a price on CO2 emissions would change the order in which existing generators are economically dispatched, depending on their carbon dioxide emissions and marginal fuel prices. Both the price increase and dispatch changes depend on the mix of generation technologies and fuels in the region available for dispatch, although the consumer response to higher prices is the dominant effect. We estimate that the instantaneous imposition of a price of $35 per metric ton on CO2 emissions would lead to a 10% reduction in CO2 emissions in PJM and MISO at a price elasticity of -0.1. Reductions in ERCOT would be about one-third as large. Thus, a price on CO2 emissions that has been shown in earlier work to stimulate investment in new generation technology also provides significant CO2 reductions before new technology is deployed at large scale.