wind energy update · wind is a major source of new generation capacity additions: wind contributed...

Wind Energy UpdateWind Energy Update

Larry Flowers Larry Flowers National Wind Technology Center, NRELNational Wind Technology Center, NREL

Appalachian Regional Commission -- September, 2009September, 2009

*Preliminary data

Installed Wind Capacities (‘99 – ‘09)

Four Years of Strong Growth: 2008: 8,558 MW Added; $16 billion Investment

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Annual US Capacity (left scale) Cumulative US Capacity (right scale)

2008 Wind Market Report; LBL

Geographic Spread of Wind ProjectsGeographic Spread of Wind Projectsin the United States Is Reasonably Broadin the United States Is Reasonably Broad

Texas Easily Led Other StatesTexas Easily Led Other Statesin Both Annual and Cumulative Capacityin Both Annual and Cumulative Capacity

• 13 states had >500 MW of wind capacity at the end of 2008 (7 had >1000 MW, 3 had >2500 MW)

• 2 states (IA and MN) have in-state wind generation that exceeds 10% of total in-state generation (6 other states exceed 5%)

Annual Capacity (2008, MW)

Cumulative Capacity (end of 2008, MW)

Estimated Percentage of In-State Generation

Texas 2,671 Texas 7,118 Iowa 13.3%Iowa 1,600 Iowa 2,791 Minnesota 10.4%Minnesota 456 California 2,517 South Dakota 8.8%Kansas 450 Minnesota 1,753 North Dakota 7.1%New York 407 Washington 1,447 Kansas 6.7%Wyoming 388 Colorado 1,068 Colorado 6.6%North Dakota 370 Oregon 1,067 Oregon 5.4%Wisconsin 342 Illinois 915 Texas 5.3%Washington 284 New York 832 New Mexico 4.5%West Virginia 264 Oklahoma 831 Wyoming 4.1%Illinois 216 Kansas 815 Washington 3.9%Oregon 185 North Dakota 714 Oklahoma 3.7%Oklahoma 142 Wyoming 676 Montana 3.4%Indiana 131 New Mexico 497 California 3.1%Michigan 127 Wisconsin 395 Hawaii 2.2%Montana 125 Pennsylvania 361 Idaho 1.6%Missouri 106 West Virginia 330 New York 1.4%South Dakota 89 Montana 272 Illinois 1.4%California 89 South Dakota 187 Wisconsin 1.3%Pennsylvania 67 Missouri 163 West Virginia 0.9%Rest of U.S. 52 Rest of U.S. 622 Rest of U.S. 0.2%TOTAL 8,558 TOTAL 25,369 TOTAL 1.8%Source: AWEA project database, EIA, Berkeley Lab estimates

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Approximate Wind Penetration, end of 2008



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nU.S Lagging Other Countries in WindU.S Lagging Other Countries in Wind

As a Percentage of Electricity ConsumptionAs a Percentage of Electricity Consumption

Note: Figure only includes the 20 countries with the most installed wind capacity at the end of 2008

Wind Is a Major Source of New GenerationWind Is a Major Source of New GenerationCapacity Additions: Wind Contributed 42% Capacity Additions: Wind Contributed 42%

of New Additions in the US in 2008of New Additions in the US in 2008

• Wind was the 2nd-largest resource added for the 4th-straight year

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Other non-renewable

Coal

Gas (non-CCGT)

Gas (CCGT)

Other renewable

Wind0% wind

42% wind

35% wind18% wind

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Nearly 300 GW of Wind inNearly 300 GW of Wind inTransmission Interconnection QueuesTransmission Interconnection Queues

• MISO (64 GW), ERCOT (52 GW), SPP (48), and PJM (43 GW) account for >70% of total wind in queues

• Not all of this capacity will be built….

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Entered Queue in 2008 Total in Queue at end of 2008

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Twice as much wind as next-largest resource (natural gas) in queues

Drivers for Wind PowerDrivers for Wind Power

• Declining Wind Costs• Fuel Price Uncertainty• Federal and State

Policies• Economic Development• Environment/Water• Public Support• Green Power• Energy Security• Carbon Risk

As a Result of Foregoing Trends,Wind Prices Have Been Rising Since 2002-03…

• Wind power prices bottomed out with projects built in 2002-03• Projects built in 2008 are ~$15-20/MWh higher on average

2008 Wind Market Report; LBL

Wind Has Been Competitive withWind Has Been Competitive withWholesale Power Prices in Recent YearsWholesale Power Prices in Recent Years

• Wholesale price range reflects flat block of power across 23 pricing nodes• Wind power prices include sample of projects built from 1998-2008

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2003 2004 2005 2006 2007 2008

49 projects 62 projects 80 projects 98 projects 117 projects 145 projects

2,268 MW 3,069 MW 4,083 MW 5,165 MW 7,654 MW 9,873 MW

2008

$/M

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Nationwide Wholesale Power Price Range (for a flat block of power)

Cumulative Capacity-Weighted Average Wind Power Price (with 25% and 75% quartiles)

Wind project sample includes projects built from 1998-2008

Even Among MoreEven Among More--Recent Projects, WindRecent Projects, WindWas Competitive in Most Regions in 2008Was Competitive in Most Regions in 2008

Note: Within a region there are a range of wholesale power prices because multiple wholesale price hubs exist in each area (see earlier map)

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Texas Heartland Mountain Northwest Great Lakes California East New England Total US

2 projects 28 projects 10 projects 5 projects 6 projects 3 projects 4 projects 2 projects 60 projects

241 MW 2,133 MW 1,115 MW 831 MW 713 MW 233 MW 170 MW 29 MW 5,465 MW

Average 2008 Wholesale Power Price Range (by region) 2008 Capacity-Weighted Average Wind Power Price (by region) Individual Project 2008 Wind Power Price (by region)

Wind project sample includes projects built from 2006-2008

2008

$/M

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Comparative Generation Costs

Source: LBL

Soaring Demand Spurs Expansion of U.S. Wind Turbine Manufacturing

COCO22 prices significantly prices significantly increase the cost of coalincrease the cost of coal

Levelized Cost of Electricity (2010) vs. CO2 Price

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Coal PCCoal IGCCCoal IGCC w/CCSGas CCNuclearWind Class 6Wind Class 4Wind Offshore Class 6

Economic Development OpportunitiesEconomic Development Opportunities

• Land Lease Payments: 3-5% of gross revenue $3000-4000/MW/year

• Local property tax revenue: 100 MW often brings in on the order of $500K-$1 million/yr

• 80-100 jobs/ 100 MW during construction• 6-8 permanent O&M jobs per 100 MW• Local construction and service industry:

Foundations, roads-- often done locally• Investment as Equity Owners: production

tax credit, accelerated depreciation, project revenues

• Manufacturing and Assembly plants expanding in U.S.-- single most significant economic development opportunity

Maple Ridge I Wind Farm Maple Ridge I Wind Farm

• 231 MW (1.65-MW turbines)• Landowner payments: $1.65

million/year, $49.5 million over 30-year period

• 300 workers during peak construction (60% local)

• 20 O&M positions• Total annual tax payments: $8

million/year; $240 million over 30 years

• Located in Lewis County, NY• Jointly owned by Iberdrola &

Horizon Wind Energy• On-line in 2006

Mount Storm Wind Farm Phase 1Mount Storm Wind Farm Phase 1

• 164 MW (2-MW turbines)• Landowner payments:

$700,000 annually; $17.5 million over 25 years

• ~ 300 workers during peak construction

• Total annual tax payments: $584,000/year; $14,600,000 over 25 years

• Schools will receive a separate payment of $68,000/year; $1.7 million over 25 years

• Located in Grant County, WV• Jointly-owned by Dominion

Energy and Shell Wind Energy • On-line in 2008

Locust Ridge Wind Farm Phase ILocust Ridge Wind Farm Phase I

• 26 MW (2-MW turbines)• Landowner payments: $9,000 -

$12,000/year/turbine• 85 – 90 workers during peak

construction• 3 O&M positions• Total annual payments:

$18,000/year including taxes; $540,000 over 30 years

• Located in Schuylkill County, PA• Owned by Iberdrola • On-line in 2006

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On‐site & Project Development Labor

Construction

Management and support

Earth moving, cement pouringTruck drivers, crane operators

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Off‐site and supply chain jobs, services, materials

Steel mill jobs, parts, servicesPhotos: E.C.Levy, Inc, Detroit, MI

Financing, banking, accountingEquipment manufacturing and sales

Property taxes

UtilitiesBlade and tower manufacturers

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Induced jobs, services, materialsMoney spent on local area goods and services from increased

revenue: sandwich shops, child care, grocery stores, clothing, other retail, public transit, new cars, restaurants, medical services

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Landowner Revenue:Landowner Revenue:

Project Development & Project Development & Onsite Labor ImpactsOnsite Labor Impacts

Local Revenue, Local Revenue, Turbine, & Supply Turbine, & Supply Chain ImpactsChain Impacts

Induced ImpactsInduced Impacts

Local Property Taxes:Local Property Taxes:

Construction Phase:Construction Phase:

Operational Phase:Operational Phase:

Construction Phase:Construction Phase: Construction Phase:Construction Phase:

Operational Phase:Operational Phase: Operational Phase:Operational Phase:

Jobs and Economic Impacts from the JEDI Model

Construction Phase = 1-2 yearsOperational Phase = 20+ years

JEDI Model Version W1.09.03e

Total economic benefit:New local jobs during construction:

New local long-term jobs:

1,000 MW of New Wind Power in Virginia

•• 71 new jobs71 new jobs

•• $9.9 million/year$9.9 million/year



•• $3 million/year$3 million/year•• 3,118 new jobs3,118 new jobs •• 1,081 new jobs1,081 new jobs

•• 84 new jobs84 new jobs•• $39.8 million to local economies$39.8 million to local economies

•• $3.5 M/year to local economies$3.5 M/year to local economies

•• $20.2 million/year to local $20.2 million/year to local economieseconomies

•• $405.8 million to local $405.8 million to local economieseconomies

•• $125.4 million to local $125.4 million to local economieseconomies

•• $9.8 million/year to local $9.8 million/year to local economieseconomies

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$1.24 billion4,699206











on Phase = 1-2 years



1,000 MW in each of 11 Appalachian States


•• $86 million/year$86 million/year

•• 5,573 new jobs5,573 new jobs


•• $33 million/year$33 million/year•• 36,446 new jobs36,446 new jobs •• 13,561 new jobs13,561 new jobs

•• 899 new jobs899 new jobs•• $415.6 million to local economies$415.6 million to local economies

•• $35.7 M/year to local economies$35.7 M/year to local economies

•• $198 million/year to local $198 million/year to local economieseconomies

•• $4,441.5 million to local $4,441.5 million to local economieseconomies

•• $1,475.6 million to local $1,475.6 million to local economieseconomies

•• $97.7million/year to local $97.7million/year to local economieseconomies

$15.3 billion55,580

Renewable Portfolio Standards

renewable portfolio standard

renewable portfolio goal

www.dsireusa.org / September 2009

t h ti li ibl *† Extra credit for solar or customer-sited renewables

I l d i f bl l i

by 2020*

y 2010

25% by 2025*

☼ AZ: 15% by 2025

☼ NM: 20% by 2020 (IOUs)10% by 2020 (co-ops)

HI: 40% by 2030

☼ Minimum solar or customer-sited requirement

TX: 5,880 MW by 2015

UT: 20% by 2025*

☼ CO: 20% by 2020 (IOUs)10% by 2020 (co-ops & large munis)*

MT: 15% by 2015

ND: 10% by 2015

SD: 10% by 2015

IA: 105 MW

MN: 25% by 2025(Xcel: 30% by 2020)

☼ MO: 15% by 2021

WI: Varies by utility; 10% by 2015 goal

MI: 10% + 1,100 MW by 2015*

☼ OH: 25% by 2025†

ME: 30% by 2000New RE: 10% by 2017

☼ NH: 23.8% by 2025

☼ MA: 15% by 2020+ 1% annual increase(Class I Renewables)

RI: 16% by 2020

CT: 23% by 2020

☼ NY: 24% by 2013

☼ NJ: 22.5% by 2021

☼ PA: 18% by 2020†

☼ MD: 20% by 2022

☼ DE: 20% by 2019*

☼ DC: 20% by 2020

VA: 15% by 2025*

☼ NC: 12.5% by 2021 (IOUs)10% by 2018 (co-ops & munis)

VT: (1) RE meets any increase in retail sales by 2012;

(2) 20% RE & CHP by 2017

29 states & DChave an RPS

5 states have goals

KS: 20% by 2020

% by 2025 (large utilities)*by 2025 (smaller utilities)

☼ IL: 25% by 2025

Environmental BenefitsEnvironmental Benefits

No SOx or NOx No particulatesNo mercuryNo CO2No water

Key Issues for Wind Power Key Issues for Wind Power

• Financial markets • Policy Uncertainty• Supply chain/workforce• Siting and Permitting: avian,

noise, visual, federal land * T i i FERC l

• Operational impacts: variability, ancillary services, forecasting, cost allocation

• Accounting for non-monetary value: green power, no fuel price risk reduced emissions

Wind Resource at Elevation

1566MW 33,000MW

“The future ain’t what it used to be.”

- Yogi Berra

- 200 400 600 800 1,0000

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10% Available 10% Available TransmissionTransmission

The black open square in the center of a state represents

Wind Capacityotal Installed (2030)

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Includes offshore wind.

46 States Would Have Substantial Wind Development by 2030

20% Wind Scenario Impact on Generation Mix in 2030

educes electric utility atural gas consumption by 0% educes total natural gas onsumption by 11%atural gas consumer enefits: $86-214 billion*

educes electric utility coal onsumption by 18% voids construction of 80 GW f new coal power plants

U.S. electrical energy mix

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National (U.S.) Economic Impacts

on Phase = 1-2 years



Cumulative Impacts from 2007-2030

•• 1.3 M FTE jobs1.3 M FTE jobs

•• $1,877 million$1,877 million

•• 834,072 FTE jobs834,072 FTE jobs

•• 366,441 FTE jobs366,441 FTE jobs

•• $783 million$783 million•• 2.63 M FTE jobs2.63 M FTE jobs •• 2.75 M FTE jobs2.75 M FTE jobs

•• 1.64 M FTE jobs1.64 M FTE jobs•• $65 billion to the US economy$65 billion to the US economy

•• $17 B to the US economy$17 B to the US economy

•• $207 billion to the US $207 billion to the US economyeconomy




$1.36 trillion6.2 M FTE

From the 20% Scenario – 300 GW new Onshore and Offshore Development


Direct ImpactsDirect Impacts

Indirect &Indirect &Induced ImpactsInduced Impacts TotalsTotals

(construction + 20 yrs)(construction + 20 yrs)







Total economic benefit:Total economic benefit:

New local jobs during New local jobs during construction:construction:

New local longNew local long--term jobs:term jobs:

20% Wind Power in Appalachian States (47.37 GW)


•• $106.2 million/year$106.2 million/year



•• $43.8 million/year$43.8 million/year•• 87,287 new jobs87,287 new jobs

•• $12.4 Billion to local economies$12.4 Billion to local economies

•• $2.1 B/year to local economies$2.1 B/year to local economies

•• $1.4 Billion/year to local $1.4 Billion/year to local economieseconomies

•• $8.7 Billion to local $8.7 Billion to local economieseconomies

= 188,001= 188,001

= 35,030= 35,030

= $91.5 Billion= $91.5 Billion

Cumulative Water Savings from 20% Scenario

Reduces water consumption of 4 trillion gallons through 2030 ( t d ti i l t i t t ti b

cremental direct cost to society $43 billioneductions in emissions of greenhouse sses and other atmospheric pollutants

825 M tons (2030)$98 billion

eductions in water consumption 8% total electric17% in 2030

bs created and other economic nefits

140,000 direct$450 billion total

eductions in natural gas use and price essure

11%$150 billion

Net Benefits: $205B + Water savings

Results: Costs & Benefits

U.S. Remains on Early Track To Meet 20%U.S. Remains on Early Track To Meet 20%of Nationof Nation’’s Electricity with Wind by 2030 s Electricity with Wind by 2030

But ramping up to ~16 GW/year and maintaining that pace or a decade is an enormous challenge, requiring proactive olicy, substantial transmission expansion, mitigation of

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Deployment Path in 20% Wind Report (annual)

Actual Wind Installations (annual)Deployment Path in 20% Wind Report (cumulative)

annual projections (EER)

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Carpe Ventem

wind energy update · wind is a major source of new generation capacity additions: wind contributed...

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