Energy: Wind - The History of Wind Energy, Electricity Generation from the Wind, Types of Wind Turbines, Wind Energy Potential, Offshore Wind Technology, Wind Power on Federal Land, Small Wind Turbines, Economic and Policy Issues, Tax Policy (Excerpt)
April 30, 2017 | Author: TheCapitol.Net | Category: N/A
Short Description
Part of the Government Series from TheCapitol.Net Since early recorded history, people have been harnessing the energy ...
Description
GOVERNMENT SERIES
Energy: Wind The History of Wind Energy, Electricity Generation from the Wind, Types of Wind Turbines, Wind Energy Potential, Offshore Wind Technology, Wind Power on Federal Land, Small Wind Turbines, Economic and Policy Issues, Tax Policy Compiled by TheCapitol.Net
GOVERNMENT SERIES
Energy: Wind The History of Wind Energy, Electricity Generation from the Wind, Types of Wind Turbines, Wind Energy Potential, Offshore Wind Technology, Wind Power on Federal Land, Small Wind Turbines, Economic and Policy Issues, Tax Policy Compiled by TheCapitol.Net
For over 30 years, TheCapitol.Net and its predecessor, Congressional Quarterly Executive Conferences, have been training professionals from government, military, business, and NGOs on the dynamics and operations of the legislative and executive branches and how to work with them. Our training and publications include congressional operations, legislative and budget process, communication and advocacy, media and public relations, research, business etiquette, and more. TheCapitol.Net is a non-partisan firm. Our publications and courses, written and taught by current Washington insiders who are all independent subject matter experts, show how Washington works.™ Our products and services can be found on our web site at . Additional copies of Energy: Wind can be ordered online: . Design and production by Zaccarine Design, Inc., Evanston, IL; 847-864-3994.
∞ The paper used in this publication exceeds the requirements of the American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI Z39.48-1992. Copyright ©2010 By TheCapitol.Net, Inc. PO Box 25706 Alexandria, VA 22313-5706 703-739-3790 Toll free: 1-877-228-5086 All Rights Reserved. No claim made to original US Government documents. Printed in the United States of America. v1 Energy: Wind, softbound: ISBN: 158733-188-8 ISBN 13: 978-1-58733-188-6
Summary Table of Contents Introduction
..................................................................................
xix
Chapter 1: “History of Wind Energy,” U.S. Department of Energy (DOE)—Energy Efficiency and Renewable Energy, Wind and Water Power Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Chapter 2: “Electricity Generation from Wind— Basics: How Wind Turbines Work,” U.S. Energy Information Administration (EIA)
.............................................
3
Chapter 3: “How Wind Turbines Work,” U.S. Department of Energy—Energy Efficiency and Renewable Energy, Wind and Water Power Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Chapter 4: “Types of Wind Turbines—Basics,” U.S. Energy Information Administration
..................................................
13
Chapter 5: “Where Wind Power Is Harnessed—Basics,” U.S. Energy Information Administration (EIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Chapter 6: “Wind Power Today—Building a New Energy Future,” U.S. Department of Energy— Energy Efficiency & Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Chapter 7: “Wind Power in the United States: Technology, Economic, and Policy Issues,” by Stan Mark Kaplan, CRS Report for Congress RL34546, October 21, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Chapter 8: Estimates of Windy Land Area and Wind Energy Potential by State for Areas >=30% Capacity Factor at 80m, National Renewable Energy Laboratory, February 4, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Chapter 9: “Distributed Wind Market Applications,” by T. Forsyth and I. Baring-Gould, Technical Report NREL/TP-500-39851, November 2007
..........................................
99
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
iii
Chapter 10: “U.S. Energy: Overview and Key Statistics,” by Carl E. Behrens and Carol Glover, CRS Report for Congress R40187, October 28, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Chapter 11: Testimony of Dr. Howard Gruenspecht, Acting Administrator, Energy Information Administration, U.S. Department of Energy before the Subcommittee on Energy and Environment of the Committee on Energy and Commerce, U.S. House of Representatives, February 26, 2009 . . . . . . . . . . . . . . 243 Chapter 12: Testimony of Ralph Izzo, President, Chairman and CEO, Public Service Enterprise Group Incorporated before the House Committee on Energy and Commerce, Subcommittee on Energy and Environment, February 26, 2009
....................
Chapter 13: Written Testimony of Edward C. Lowe, General Manager, Market Development, Renewables, GE Energy Infrastructure before the House Committee on Energy and Commerce, Subcommittee on Energy and Environment. Hearing on “Renewable Energy: Complementary Policies for Climate Legislation,” February 26, 2009 Chapter 14: “Wind and Water Power Program—Wind Powering America”
261
.............
269
......................
285
Chapter 15: “Wind and Water Power Program—About the Program,” U.S. Department of Energy—Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289 Chapter 16: “Wind and Water Power Program—Related Wind Links,” U.S. Department of Energy—Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291 Chapter 17: “Wind and Water Power Program—Wind Energy Resource Potential,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295 Chapter 18: “Wind and Water Power Program—Wind Power Outreach and Education,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297
iv
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 19: “Wind and Water Power Program—Environmental Impacts and Siting of Wind Projects,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299 Chapter 20: “Wind and Water Power Program—Wind Energy for Hydrogen Production,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 Chapter 21: “Wind and Water Power Program—Wind Energy for Hydropower Applications,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303 Chapter 22: “Wind and Water Power Program—Distributed (Small) Wind Technology,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305 Chapter 23: “Wind and Water Power Program—Large Wind Technology,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309 Chapter 24: “Wind and Water Power Program—Supporting Wind Turbine Manufacturing,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 Chapter 25: “Wind and Water Power Program—Jobs and Economic Development Impact Models,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 Chapter 26: “Wind and Water Power Program—Wind Economic Development,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 Chapter 27: “Wind and Water Power Program—Offshore Wind Technology,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
v
Chapter 28: “Wind Energy: Offshore Permitting,” by Adam Vann, CRS Report for Congress R40175, September 3, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 Chapter 29: “Wind and Water Power Program—Renewable Systems Interconnection,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347 Chapter 30: “Wind and Water Power Program—Advantages and Disadvantages of Wind Energy,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351 Chapter 31: “Assessing the Potential for Renewable Energy on National Forest System Lands,” U.S. Department of Energy, National Renewable Energy Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355 Chapter 32: “Energy Projects on Federal Lands: Leasing and Authorization,” by Adam Vann, CRS Report for Congress R40806, September 8, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479 Chapter 33: U.S. Senate Committee on Energy and Natural Resources Hearing on Energy Development on Public Lands and the Outer Continental Shelf, March 17, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501 Chapter 34: U.S. Senate Committee on Energy and Natural Resources Hearing to Consider Renewable Energy Production, Strategies, and Technologies with Regard to Rural Communities, Chena Hot Springs, AK, August 22, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 611 Chapter 35: “20% Wind Energy by 2030—Increasing Wind Energy’s Contribution to U.S. Electricity Supply, Executive Summary,” December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 685 Chapter 36: “Wind Research—Department of Energy Releases New Estimates of Nation’s Wind Energy Potential,” National Renewable Energy Laboratory, February 26, 2010
vi
.........................
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
713
Chapter 37: “Visiting NREL—National Wind Technology Center,” National Renewable Energy Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715 Chapter 38: “Wind Research—Large Wind Turbine Research,” National Renewable Energy Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717 Chapter 39: “Wind and Water Power Program—Frequently Asked Questions on Small Wind Systems,” U.S. Department of Energy—Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 721 Chapter 40: “Wind Research—Small Wind Turbine Independent Testing,” National Renewable Energy Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 729 Chapter 41: “Wind Research –Small Wind Turbine Research,” National Renewable Energy Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 731 Chapter 42: “Wind and Water Power Program—Wind Powering America— Small Wind for Homeowners, Ranchers, and Small Businesses” U.S. Department of Energy—Energy Efficiency and Renewable Energy . . . . . . . . . . . 733 Chapter 43: “Wind Research—Midsize Wind Turbine Research,” National Renewable Energy Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 737 Chapter 44: “Wind Research—Accredited Testing,” National Renewable Energy Laboratory
................................................
Chapter 45: “Wind Research—Software Development, Modeling, and Analysis,” National Renewable Energy Laboratory Chapter 46: “Wind Research—Working with Us,” National Renewable Energy Laboratory
739
..............................
741
................................................
745
Chapter 47: “Energy Tax Policy: Issues in the 111th Congress,” by Donald J. Marples and Molly F. Sherlock, CRS Report for Congress R40999, March 8, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 747
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
vii
Chapter 48: “Renewable Energy and Energy Efficiency Tax Incentive Resources,” by Lynn J. Cunningham and Beth A. Roberts, CRS Report for Congress R40455, March 23, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 777 Chapter 49: Resources from TheCapitol.Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 787 Chapter 50: Other Resources
viii
...........................................................................
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
788
Table of Contents Introduction
..................................................................................
xix
Chapter 1: “History of Wind Energy,” U.S. Department of Energy (DOE)—Energy Efficiency and Renewable Energy, Wind and Water Power Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Chapter 2: “Electricity Generation from Wind— Basics: How Wind Turbines Work,” U.S. Energy Information Administration (EIA)
.............................................
3
Chapter 3: “How Wind Turbines Work,” U.S. Department of Energy—Energy Efficiency and Renewable Energy, Wind and Water Power Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Chapter 4: “Types of Wind Turbines—Basics,” U.S. Energy Information Administration
..................................................
13
Chapter 5: “Where Wind Power Is Harnessed—Basics,” U.S. Energy Information Administration (EIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Chapter 6: “Wind Power Today—Building a New Energy Future,” U.S. Department of Energy— Energy Efficiency & Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Building a New Energy Future Boosting U.S. Manufacturing Advancing Large Wind Turbine Technology Growing the Market For Distributed Wind Enhancing Wind Integration Increasing Wind Energy Deployment Ensuring Long-Term Industry Growth
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
ix
Chapter 7: “Wind Power in the United States: Technology, Economic, and Policy Issues,” by Stan Mark Kaplan, CRS Report for Congress RL34546, October 21, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Introduction Background The Rise of Wind Benefits and Drawbacks of Wind Power Wind Resources and Technology Wind Power Fundamentals Physical Relationships Wind Resources Offshore Wind Wind Power Technology Types of Wind Turbines Capacity Factor Wind Research and Development Emphasis Wind Industry Composition and Trends Wind Turbine Manufacturers and Wind Plant Developers International Comparisons Wind Power Economics Cost and Operating Characteristics of Wind Power Wind Operation and System Integration Issues Levelized Cost Comparison Wind Policy Issues Siting and Permitting Issues Transmission Constraints Federal Renewable Transmission Initiatives Renewable Production Tax Credit PTC Eligibility: IOUs vs. IPPs Specific PTC Legislative Options Carbon Constraints and the PTC Alternatives to the PTC Renewable Portfolio Standards Federal RPS Debate Conclusions Figure 1. Cumulative Installed U.S. Wind Capacity Figure 2. Wind Power Aerodynamics Figure 3. U.S. Wind Resources Potential Figure 4. Evolution of U.S. Commercial Wind Technology Figure 5. Components in a Simplified Wind Turbine Figure 6. Installed Wind Capacity By State in 2007 Figure 7. Existing and Planned North American Wind Plants by Size
x
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Figure 8. U.S. Wind Turbine Market Share by Manufacturer in 2007 Figure 9. Global Installed Wind Capacity By Country Figure 10. Component Costs for Typical Wind Plants Table 1. Wind Energy Penetration Rates by Country Table 2. Assumptions for Generating Technologies Table 3. Economic Comparison of Wind Power with Alternatives Table 4. Selected Wind Power Tax Incentive Bills Compared Table A-1. Base Case Financial Factors Table A-2. Base Case Fuel and Allowance Price Forecasts Table A-3. Power Plant Technology Assumptions Appendix. Financial Analysis Methodology and Assumptions
Chapter 8: Estimates of Windy Land Area and Wind Energy Potential by State for Areas >=30% Capacity Factor at 80m, National Renewable Energy Laboratory, February 4, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Chapter 9: “Distributed Wind Market Applications,” by T. Forsyth and I. Baring-Gould, Technical Report NREL/TP-500-39851, November 2007
..........................................
99
Chapter 1. Executive Summary Chapter 2. Small-Scale Remote Or Off-Grid Power Chapter 3. Residential Power Chapter 4. Farm, Industry, and Small Business Chapter 5. “Small-Scale” Community Wind Power
Chapter 10: “U.S. Energy: Overview and Key Statistics,” by Carl E. Behrens and Carol Glover, CRS Report for Congress R40187, October 28, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Introduction Oil Petroleum Consumption, Supply, and Imports Petroleum and Transportation Petroleum Prices: Historical Trends Petroleum Prices: The 2004–2008 Bubble Gasoline Taxes Electricity Other Conventional Energy Resources Natural Gas Coal Renewables
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
xi
Conservation and Energy Efficiency Vehicle Fuel Economy Energy Consumption and GDP Major Statistical Resources Energy Information Administration (EIA) Other Sources Figure 1. Per Capita Energy Consumption in Transportation and Residential Sectors, 1949–2008 Figure 2. Electricity Intensity: Commercial, Residential, and Industrial Sectors, 1949–2008 Figure 3. U.S. Energy Consumption, 1950–2005 and 2008 Figure 4. World Crude Oil Reserves, 1973, 1991, and 2008 Figure 5. U.S. Consumption of Imported Petroleum, 1960–2008 and Year-to-Date Average for 2009 Figure 6. Transportation Use of Petroleum, 1950–2008 Figure 7. Nominal and Real Cost of Crude Oil to Refiners, 1968–2008 Figure 8. Nominal and Real Price of Gasoline, 1950–2008 and August 2009 Figure 9. Consumer Spending on Oil as a Percentage of GDP, 1970–2006 Figure 10. Crude Oil Futures Prices, January 2000 to September 2009 Figure 11. Average Daily Nationwide Price of Unleaded Gasoline, January 2002–October 2009 Figure 12. U.S. Gasoline Consumption, January 2000–September 2009 Figure 13. Electricity Generation by Source, Selected Years, 1950–2007 Figure 14. Changes in Generating Capacity, 1995–2007 Figure 15. Price of Retail Residential Electricity, 1960–2007 Figure 16. Natural Gas Prices to Electricity Generators, 1978–2007 Figure 17. Monthly and Annual Residential Natural Gas Prices, 2000–June 2009 Figure 18. Annual Residential Natural Gas Prices, 1973–2008 Figure 19. U.S. Ethanol Production, 1990–2008 Figure 20. Wind Electricity Net Generation, 1989–2008 Figure 21. Motor Vehicle Efficiency Rates, 1973–2007 Figure 22. Oil and Natural Gas Consumption per Dollar of GDP, 1973–2008 Figure 23. Change in Oil and Natural Gas Consumption and Growth in GDP, 1973–2008 Table 1. U.S. Energy Consumption, 1950–2008 Table 2. Energy Consumption in British Thermal Units (BTU) and as a Percentage of Total, 1950–2008 Table 3. Petroleum Consumption by Sector, 1950–2008 Table 4. U.S. Petroleum Production, 1950–2008 Table 5. Transportation Use of Petroleum, 1950–2008 Table 6. Electricity Generation by Region and Fuel, 2008 Table 7. Natural Gas Consumption by Sector, 1950–2008 Table 8. Coal Consumption by Sector, 1950–2008
xii
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 11: Testimony of Dr. Howard Gruenspecht, Acting Administrator, Energy Information Administration, U.S. Department of Energy before the Subcommittee on Energy and Environment of the Committee on Energy and Commerce, U.S. House of Representatives, February 26, 2009 . . . . . . . . . . . . . . 243 Chapter 12: Testimony of Ralph Izzo, President, Chairman and CEO, Public Service Enterprise Group Incorporated before the House Committee on Energy and Commerce, Subcommittee on Energy and Environment, February 26, 2009
....................
Chapter 13: Written Testimony of Edward C. Lowe, General Manager, Market Development, Renewables, GE Energy Infrastructure before the House Committee on Energy and Commerce, Subcommittee on Energy and Environment. Hearing on “Renewable Energy: Complementary Policies for Climate Legislation,” February 26, 2009 Chapter 14: “Wind and Water Power Program—Wind Powering America”
261
.............
269
......................
285
Chapter 15: “Wind and Water Power Program—About the Program,” U.S. Department of Energy—Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289 Chapter 16: “Wind and Water Power Program—Related Wind Links,” U.S. Department of Energy—Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291 Chapter 17: “Wind and Water Power Program—Wind Energy Resource Potential,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295 Chapter 18: “Wind and Water Power Program—Wind Power Outreach and Education,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 Chapter 19: “Wind and Water Power Program—Environmental Impacts and Siting of Wind Projects,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
xiii
Chapter 20: “Wind and Water Power Program—Wind Energy for Hydrogen Production,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 Chapter 21: “Wind and Water Power Program—Wind Energy for Hydropower Applications,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303 Chapter 22: “Wind and Water Power Program—Distributed (Small) Wind Technology,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305 Chapter 23: “Wind and Water Power Program—Large Wind Technology,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309 Chapter 24: “Wind and Water Power Program—Supporting Wind Turbine Manufacturing,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 Chapter 25: “Wind and Water Power Program—Jobs and Economic Development Impact Models,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 Chapter 26: “Wind and Water Power Program—Wind Economic Development,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 Chapter 27: “Wind and Water Power Program—Offshore Wind Technology,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325 Chapter 28: “Wind Energy: Offshore Permitting,” by Adam Vann, CRS Report for Congress R40175, September 3, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 Jurisdiction Over the Ocean State Permitting Federal Permitting
xiv
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Early Regulation and Litigation The Energy Policy Act of 2005 EPAct Exemptions Additional Regulation Under Existing Law Conclusion
Chapter 29: “Wind and Water Power Program—Renewable Systems Interconnection,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347 Chapter 30: “Wind and Water Power Program—Advantages and Disadvantages of Wind Energy,” U.S. Department of Energy— Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351 Chapter 31: “Assessing the Potential for Renewable Energy on National Forest System Lands,” U.S. Department of Energy, National Renewable Energy Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355 Chapter 32: “Energy Projects on Federal Lands: Leasing and Authorization,” by Adam Vann, CRS Report for Congress R40806, September 8, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479 Introduction Oil and Natural Gas Exploration and Production on Federal Lands History and Background Public Lands Subject to Oil and Natural Gas Leasing Development of Resource Management Plans Bureau of Land Management U.S. Forest Service The Competitive Leasing Process The Noncompetitive Leasing Process Lease Terms and Conditions General Statutory Restrictions Payment Terms: Rental Fees and Royalties Lease Terms, Extensions, and Cancellations Applications for Permits to Drill Bureau of Land Management U.S. Forest Service Renewable Energy Projects on Federal Lands Background Geothermal Project Leasing Background
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
xv
The Leasing Process Exploration and Production Under Geothermal Leases Authorizations for Wind and Solar Energy Projects Background Title V of the Federal Land Policy and Management Act
Chapter 33: U.S. Senate Committee on Energy and Natural Resources Hearing on Energy Development on Public Lands and the Outer Continental Shelf, March 17, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501 Chapter 34: U.S. Senate Committee on Energy and Natural Resources Hearing to Consider Renewable Energy Production, Strategies, and Technologies with Regard to Rural Communities, Chena Hot Springs, AK, August 22, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 611 Chapter 35: “20% Wind Energy by 2030—Increasing Wind Energy’s Contribution to U.S. Electricity Supply, Executive Summary,” December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 685 Chapter 36: “Wind Research—Department of Energy Releases New Estimates of Nation’s Wind Energy Potential,” National Renewable Energy Laboratory, February 26, 2010
.........................
713
Chapter 37: “Visiting NREL—National Wind Technology Center,” National Renewable Energy Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715 Chapter 38: “Wind Research—Large Wind Turbine Research,” National Renewable Energy Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717 Chapter 39: “Wind and Water Power Program—Frequently Asked Questions on Small Wind Systems,” U.S. Department of Energy—Energy Efficiency and Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 721 Chapter 40: “Wind Research—Small Wind Turbine Independent Testing,” National Renewable Energy Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 729 Chapter 41: “Wind Research –Small Wind Turbine Research,” National Renewable Energy Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 731
xvi
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 42: “Wind and Water Power Program—Wind Powering America— Small Wind for Homeowners, Ranchers, and Small Businesses” U.S. Department of Energy—Energy Efficiency and Renewable Energy . . . . . . . . . . . 733 Chapter 43: “Wind Research—Midsize Wind Turbine Research,” National Renewable Energy Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 737 Chapter 44: “Wind Research—Accredited Testing,” National Renewable Energy Laboratory
................................................
Chapter 45: “Wind Research—Software Development, Modeling, and Analysis,” National Renewable Energy Laboratory Chapter 46: “Wind Research—Working with Us,” National Renewable Energy Laboratory
739
..............................
741
................................................
745
Chapter 47: “Energy Tax Policy: Issues in the 111th Congress,” by Donald J. Marples and Molly F. Sherlock, CRS Report for Congress R40999, March 8, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 747 Introduction Economic Rationale for Intervention in Energy Markets Rationale for Intervention in Energy Markets Externalities Principal-Agent and Informational Inefficiencies National Security Potential Interventions in Energy Markets Taxes as a User Charge Current Status of U.S. Energy Tax Policy Fossil Fuel Production Renewable Energy Production Energy Conservation Alternative Technology Vehicle Credits Other Energy Tax Provisions Energy Tax Legislation in the 111th Congress The American Recovery and Reinvestment Act of 2009 (P.L. 111-5) The President’s Fiscal Year 2010 and 2011 Budget Proposals American Energy Production and Price Reduction Act (H.R. 3505) Carbon Tax/Climate Change The Tax Extenders Act of 2009
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
xvii
Enacted Legislation in the 110th Congress Energy Independence and Security Act of 2007 (P.L. 110-140 Energy Tax Provisions in the Food, Conservation, and Energy Act of 2008 (P.L. 110-234) The Emergency Economic Stabilization Act of 2008 (P.L. 110-343) Table 1. Energy Tax Expenditures Table 2. Energy Tax Provisions Enacted Under American Recovery and Reinvestment Act of 2009 Appendix. Energy Tax Legislation Prior to the 110th Congress
Chapter 48: “Renewable Energy and Energy Efficiency Tax Incentive Resources,” by Lynn J. Cunningham and Beth A. Roberts, CRS Report for Congress R40455, March 23, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 777 Full Text of Tax Incentive Legislation Federal Incentives State and Local Incentives Incentives by Technology Type Biomass Biomass Geothermal Solar Wind CRS Reports on Federal Incentives Recent Legislation General Vehicles and Fuels Wave, Tidal, In-Stream Wind Power Popular Incentives Tables Grants Information CRS Reports on Grants Table 1. U.S. Code Citations and Expiration Dates for Popular Renewable Energy an Energy Efficiency Tax Incentives/Credits Table 2. Alternative Motor Vehicle Credit
Chapter 49: Resources from TheCapitol.Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 787 Live Training Capitol Learning Audio CoursesTM
Chapter 50: Other Resources
...........................................................................
Internet Resources Books Videos and Movies
xviii
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
788
Introduction Energy: Wind The History of Wind Energy, Electricity Generation from the Wind, Types of Wind Turbines, Wind Energy Potential, Offshore Wind Technology, Wind Power on Federal Land, Small Wind Turbines, Economic and Policy Issues, Tax Policy Since early recorded history, people have been harnessing the energy of the wind. In the United States in the late 19th century, settlers began using windmills to pump water for farms and ranches, and later, to generate electricity for homes and industry. Industrialism led to a gradual decline in the use of windmills. The steam engine replaced European water-pumping windmills, and in the 1930s, the Rural Electrification Administration’s programs brought inexpensive electric power to most rural areas in the United States. However, industrialization also sparked the development of larger windmills, wind turbines, to generate electricity. After experiencing strong growth in the mid-1980s, the U.S. wind industry hit a plateau during the electricity restructuring period in the 1990s and then regained momentum in 1999. Industry growth has since responded positively to policy incentives. Today, the U.S. wind industry is growing rapidly, driven by sustained production tax credits (PTCs), rising concerns about climate change, and renewable portfolio standards (RPS) or goals in roughly 50% of the states. Although wind power currently provides only about 1% of U.S. electricity needs, it is growing more rapidly than any other energy source. In 2007, over 5,000 megawatts of new wind generating capacity were installed in the United States, second only to new natural gas-fired generating capacity. Wind power has negligible fuel costs, but a high capital cost. The estimated average cost per unit incorporates the cost of construction of the turbine and transmission facilities, borrowed funds, return to investors (including cost of risk), estimated annual production, and other components, averaged over the projected useful life of the equipment, which may be in excess of twenty years. Energy cost estimates are highly dependent on these assumptions so published cost figures can differ substantially. Modern wind turbines fall into two basic groups: the horizontal-axis variety (the blades circle around a horizontal axis) and the vertical-axis design (the blades circle around a vertical axis). Utility-scale turbines range in size from 100 kilowatts to as large as several megawatts. Larger turbines are grouped together into wind farms which provide bulk power to the electrical grid. Single small turbines (below 100 kilowatts) are used for homes, telecommunications dishes, or water pumping. Small turbines are sometimes used in connection with diesel generators, batteries, and photovoltaic systems. These systems are called hybrid wind systems and are typically used in remote, off-grid locations where a connection to the utility grid is not available.
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
xix
A key challenge for wind energy is that electricity production depends on when winds blow rather than when consumers need power. Wind’s variability can create added expenses and complexity in balancing supply and demand on the grid. Recent studies imply that these integration costs do not become significant (5%-10% of wholesale prices) until wind turbines account for 15%-30% of the capacity in a given control area. Another concern is that new transmission infrastructure will be required to send the windgenerated power to demand centers. Building new lines can be expensive and timeconsuming, and there are debates over how construction costs should be allocated among endusers and which pricing methodologies are best. Opposition to wind power arises for environmental, aesthetic, or aviation security reasons. New public-private partnerships have been established to address more comprehensively problems with avian (bird and bat) deaths resulting from wind farms. Some stakeholders oppose the construction of wind plants for visual reasons, especially in pristine or highly-valued areas. A debate over the potential for wind turbines to interfere with aviation radar emerged in 2006, but most experts believe any possible problems are economically and technically manageable. Wind power has become “mainstream” in many regions of the country. Wind technology has improved significantly over the past two decades, and wind energy has become increasingly competitive with other power generation options. Federal wind power policy has centered primarily on the production tax credit (PTC), a business incentive to operate wind facilities. The PTC was extended through 2013. Analysts and wind industry representatives argue that the on-again offagain nature of the PTC is inefficient and leads to higher costs for the industry. While wind energy still depends on federal tax incentives to compete, key uncertainties like climate policy, fossil fuel prices, and technology progress could dominate future cost competitiveness. Links to Internet resources are available on the book’s web site at .
xx
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 1: History of Wind Energy
U.S. Department of Energy - Energy Efficiency and Renewable Energy Wind and Water Power Program
History of Wind Energy Since early recorded history, people have been harnessing the energy of the wind. Wind energy propelled boats along the Nile River as early as 5000 B.C. By 200 B.C., simple windmills in China were pumping water, while vertical-axis windmills with woven reed sails were grinding grain in Persia and the Middle East.
Early in the twentieth century, windmills were commonly used across the Great Plains to pump water and to generate electricity. New ways of using the energy of the wind eventually spread around the world. By the 11th century, people in the Middle East were using windmills extensively for food production; returning merchants and crusaders carried this idea back to Europe. The Dutch refined the windmill and adapted it for draining lakes and marshes in the Rhine River Delta. When settlers took this technology to the New World in the late 19th century, they began using windmills to pump water for farms
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
1
Goverment Series: Energy: Wind
and ranches, and later, to generate electricity for homes and industry. Industrialization, first in Europe and later in America, led to a gradual decline in the use of windmills. The steam engine replaced European water-pumping windmills. In the 1930s, the Rural Electrification Administration's programs brought inexpensive electric power to most rural areas in the United States. However, industrialization also sparked the development of larger windmills to generate electricity. Commonly called wind turbines, these machines appeared in Denmark as early as 1890. In the 1940s the largest wind turbine of the time began operating on a Vermont hilltop known as Grandpa's Knob. This turbine, rated at 1.25 megawatts in winds of about 30 mph, fed electric power to the local utility network for several months during World War II. The popularity of using the energy in the wind has always fluctuated with the price of fossil fuels. When fuel prices fell after World War II, interest in wind turbines waned. But when the price of oil skyrocketed in the 1970s, so did worldwide interest in wind turbine generators. The wind turbine technology R&D that followed the oil embargoes of the 1970s refined old ideas and introduced new ways of converting wind energy into useful power. Many of these approaches have been demonstrated in "wind farms" or wind power plants — groups of turbines that feed electricity into the utility grid — in the United States and Europe. Today, the lessons learned from more than a decade of operating wind power plants, along with continuing R&D, have made wind-generated electricity very close in cost to the power from conventional utility generation in some locations. Wind energy is the world's fastest-growing energy source and will power industry, businesses and homes with clean, renewable electricity for many years to come. Skip footer navigation to end of page. Wind and Water Power Program Home | EERE Home | U.S. Department of Energy Webmaster | Web Site Policies | Security & Privacy | USA.gov Content Last Updated: 09/12/2005
2
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 2: Electricity Generation from Wind—Basics: How Wind Turbines Work
Electricity Generation from Wind – Basics How Wind Turbines Work Diagram of Windmill Workings
Source: National Renewable Energy Laboratory, U.S. Department of Energy (Public Domain) Current Map of U.S. Wind Capacity
Note: See progress of installed wind capacity between 1999 and 2009 Source: National Renewable Energy Laboratory, U.S. Department of Energy (Public Domain) Like old fashioned windmills, today’s wind machines (also called wind turbines) use blades to collect the wind’s kinetic energy. The wind flows over the blades creating lift, like the effect on airplane wings, which causes them to turn. The blades are connected to a drive shaft that turns an electric generator to produce electricity.
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
3
Goverment Series: Energy: Wind
With the new wind machines, there is still the problem of what to do when the wind isn't blowing. At those times, other types of power plants must be used to make electricity.
Wind Production In 2008, wind machines in the United States generated a total of 52 billion kilowatthours, about 1.3% of total U.S. electricity generation. Although this is a small fraction of the Nation's total electricity production, it was enough electricity to serve 4.6 million households or to power the entire State of Colorado. The amount of electricity generated from wind has been growing rapidly in recent years. Generation from wind in the United States nearly doubled between 2006 and 2008. New technologies have decreased the cost of producing electricity from wind, and growth in wind power has been encouraged by tax breaks for renewable energy and green pricing programs. Many utilities around the country offer green pricing options that allow customers the choice to pay more for electricity that comes from renewable sources to support new technologies.
Also on Energy Explained x x
x
4
History of Wind Power Wind Energy and the Environment Where Wind Power Is Harnessed
Learn More x
Wind Data — http://www.eia.doe.gov/cneaf/solar.renewables/page/wind/wi nd.html
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 3: How Wind Turbines Work
U.S. Department of Energy - Energy Efficiency and Renewable Energy Wind and Water Power Program
How Wind Turbines Work Wind is a form of solar energy. Winds are caused by the uneven heating of the atmosphere by the sun, the irregularities of the earth's surface, and rotation of the earth. Wind flow patterns are modified by the earth's terrain, bodies of water, and vegetation. Humans use this wind flow, or motion energy, for many purposes: sailing, flying a kite, and even generating electricity. The terms wind energy or wind power describe the process by which the wind is used to generate mechanical power or electricity. Wind turbines convert the kinetic energy in the wind into mechanical power. This mechanical power can be used for specific tasks (such as grinding grain or pumping water) or a generator can convert this mechanical power into electricity. So how do wind turbines make electricity? Simply stated, a wind turbine works the opposite of a fan. Instead of using electricity to make wind, like a fan, wind turbines use wind to make electricity. The wind turns the blades, which spin a shaft, which connects to a generator and makes electricity. Take a look inside a wind turbine to see the various parts. View the wind turbine animation to see how a wind turbine works. This aerial view of a wind power plant shows how a group of wind turbines can make electricity for the utility grid. The electricity is sent through transmission and distribution lines to homes, businesses, schools, and so on.
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
7
Goverment Series: Energy: Wind
Learn more about wind energy technology: x x x
Types of Wind Turbines Sizes of Wind Turbines Inside the Wind Turbine
Many wind farms have sprung up in the Midwest in recent years, generating power for utilities. Farmers benefit by receiving land lease payments from wind energy project developers.
Types of Wind Turbines Modern wind turbines fall into two basic groups: the horizontal-axis variety, as shown in the photo, and the vertical-axis design, like the eggbeater-style Darrieus model, named after its French inventor. Horizontal-axis wind turbines typically either have two or three blades. These three-bladed wind turbines are operated "upwind," with the blades
8
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 4: Types of Wind Turbines—Basics
Types of Wind Turbines – Basics Horizontal-Axis Wind Machine
Source: National Energy Education Development Project (Public Domain) Darrieus Vertical-Axis Wind Turbine in Martigny, Switzerland
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
13
Goverment Series: Energy: Wind
Source: Lysippos, Wikimedia Commons author (GNU Free Documentation License) (Public Domain) There are two types of wind machines (turbines) used today, based on the direction of the rotating shaft (axis): horizontal-axis wind machines and vertical-axis wind machines. The size of wind machines varies widely. Small turbines used to power a single home or business may have a capacity of less than 100 kilowatts. Some large commercial-sized turbines may have a capacity of 5 million watts, or 5 megawatts. Larger turbines are often grouped together into wind farms that provide power to the electrical grid. need live links
Horizontal-axis Turbines Look Like Windmills Most wind machines being used today are the horizontal-axis type. Horizontal-axis wind machines have blades like airplane propellers. A typical horizontal wind machine stands as tall as a 20-story building and has three blades that span 200 feet across. The largest wind machines in the world have blades longer than a football field. Wind machines stand tall and wide to capture more wind.
Vertical-axis Turbines Look Like Egg Beaters Vertical-axis wind machines have blades that go from top to bottom. The most common type — the Darrieus wind turbine, named after the French engineer Georges Darrieus who patented the design in 1931 — looks like a giant, two-bladed egg beater. This type
14
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 4: Types of Wind Turbines—Basics
of vertical wind machine typically stands 100 feet tall and 50 feet wide. Vertical-axis wind machines make up only a very small share of the wind machines used today.
Wind Power Plants Produce Electricity Wind power plants, or wind farms, as they are sometimes called, are clusters of wind machines used to produce electricity. A wind farm usually has dozens of wind machines scattered over a large area. The world's largest wind farm, the Horse Hollow Wind Energy Center in Texas, has 421 wind turbines that generate enough electricity to power 220,000 homes per year. Many wind plants are not owned by public utility companies. Instead, they are owned and operated by business people who sell the electricity produced on the wind farm to electric utilities. These private companies are known as Independent Power Producers.
Also on Energy Explained x x x
History of Wind Power Wind Energy and the Environment Electricity Generation from Wind
Last Reviewed: January 26, 2010 http://www.eia.doe.gov/energyexplained/index.cfm?page=wind_types_of_turbines
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
15
Chapter 6: Wind Power Today—Building a New Energy Future
BUILDING A NEW ENERGY FUTURE We will harness the sun and the winds and the soil to fuel our cars and run our factories. . . . — President Barack Obama, Inaugural Address, January 20, 2009
I
n 2008, wind energy enjoyed another record-breaking year of industry growth. By installing 8,358 megawatts (MW) of new generation during the year, the U.S. wind energy industry took the lead in global installed wind energy capacity with a total of 25,170 MW. According to initial estimates, the new wind projects completed in 2008 account for about 40% of all new U.S. powerproducing capacity added last year. The wind energy industry’s rapid expansion in 2008 demonstrates the potential for wind energy to play a major role in supplying our nation with clean, inexhaustible, domestically produced energy while bolstering our nation’s economy. To explore the possibilities of increasing wind’s role in our national energy mix, government and industry representatives formed a collaborative to evaluate a scenario in which wind energy supplies 20% of U.S. electricity by 2030. In July 2008, the U.S. Department of Energy (DOE) published the results of that evaluation in a report entitled 20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply. According to the report, the United States has more than 8,000 gigawatts (GW ) of available land-based wind resources that could be captured economically. In the early release of its Annual Energy Outlook 2009, the U.S. Energy Information Administration (EIA) estimates that U.S. electricity consumption will grow from 3,903 billion kilowatt-hours (kWh) in 2007 to 4,902 billion kWh in 2030, increasing at an average annual rate of 1%. To meet 20% of that demand, U.S. wind power capacity would have to reach more than 300 GW (300,000 MW). This growth represents an increase of more than 275 GW within 21 years. Although achieving 20% wind energy will have significant economic, environmental, and energy security benefits, to make it happen the industry must overcome significant challenges.
Wind Energy Program Mission: The mission of DOE’s Wind and Hydropower Technologies Program is to increase the development and deployment of reliable, affordable, and environmentally responsible wind and water power technologies in order to realize the benefits of domestic renewable energy production.
Protecting the Environment Achieving 20% wind by 2030 would also provide significant environmental benefits in the form of avoided greenhouse gas emissions and water savings. For example, a 1.5-MW wind turbine can power 500 homes and displace 2,700 metric tons of carbon dioxide (CO2) per year (the equivalent of planting 4 square kilometers of forest every year). According to AWEA, by the end of 2008, wind energy produced enough electricity to power approximately 7 million households and avoid nearly 44 million metric tons of emissions—the equivalent of taking more than 7 million cars off the road. Generating 20% of U.S. electricity from wind could avoid
Stimulating Economic Growth Achieving 20% wind energy by 2030 would have widespread economic benefits. The American Wind Energy Association (AWEA) reported that the wind industry employed about 85,000 workers and channeled approximately $17 billion into the U.S. economy in 2008. Approximately 55 facilities for manufacturing wind-related equipment were announced or opened in 2008. Under the 20% wind energy scenario, the industry could support 500,000 jobs by 2030, 180,000 of which would be directly related to the industry through construction, operations, and manufacturing. In the decade preceding 2030, the 20% scenario would support 100,000 jobs in associated industries such as accountants, lawyers, steelworkers, and electrical manufacturing, and it will generate much needed income for rural communities. Farmers and landowners would gain more than $600 million in annual land-lease payments and regional governments would gain more than $1.5 billion annually in tax revenues by 2030. Rural counties could use these taxes to fund new schools, roads, and other vital infrastructure, creating even more jobs for local communities.
www1.eere.energy.gov/windandhydro/wind_2030.htm 1
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
23
Goverment Series: Energy: Wind
In addition to the need for expanding and improving the nation’s transmission system, the natural variability of the wind resource can present challenges to grid system operators and planners with regard to managing Induced Impacts regulation, load following, scheduling, line Indirect Impacts Direct Impacts voltage, and reserves. Although the current On-Site Off-Site These jobs and earnings level of wind penetration in the United These are jobs in and t $POTUSVDUJPO XPSLFST t #PPN USVDL BOE result from the spending by payments made to supporting States and around the world has provided t .BOBHFNFOU management, gas and people directly and indirectly t "ENJOJTUSBUJWF TVQQPSU HBT TUBUJPO XPSLFST businesses, such as bankers substantial experience for successful grid supported by the project, t $FNFOU USVDL ESJWFST t .BOVGBDUVSFST UVSCJOFT financing the construction, SPBE DSFXT CMBEFT UPXFST FUD
including benefits to grocery operations with wind power, many grid contractors and equipment NBJOUFOBODF XPSLFST t )BSEXBSF TUPSF QVSDIBTFT store clerks, retail salespeople, operators are still concerned about the suppliers BOE XPSLFST TQBSF QBSUT and child care providers and their suppliers impacts that increasing the percentage of wind in their energy portfolios will have on system reliability. To increase utility understanding of integration and transmission issues associated with increased wind power generation, Wind Program researchers at the DOE national laboratories are working with approximately 825 million metric tons of CO2 in the electric sector industry partners on mitigating interconnection impacts, electric in 2030. power market rules, operating strategies, and system planning In addition to emissions reductions, the increased use of wind needed for wind energy to compete without disadvantage to serve energy will reduce water consumption. Electricity generation the nation’s energy needs. accounts for 50% of all water withdrawals in our nation. The 20% Increasing the Manufacturing Capacity and wind scenario is projected to result in an 8% reduction (or 4 trillion Growing a Skilled Workforce gallons) in cumulative water use by the electric sector from 2007 Achieving 20% wind energy would also support an expansion through 2030. In 2030, annual water consumption in the electric of the domestic manufacturing sector and related employment. To sector will be reduced by 17%. keep pace with this rapid growth, manufacturers need to develop robust and cost-effective manufacturing processes that incorporate Meeting the Challenges automated systems to reduce labor intensity and increase The 20% report concluded that, although achieving 20% wind energy is technically feasible, it requires enhanced transmission infrastructure, increased U.S. manufacturing capacity, streamlined siting and permitting Annual CO2 emissions avoided with regimes, and improved reliability and operability 2030 wind scenario of wind systems. To address these challenges, the DOE Wind Program collaborates with federal, state, industry, and stakeholder organizations to lead wind-energy technology research, development, and application efforts.
Wind’s economic ripple effect
Enhancing Wind Integration One of the challenges to meeting 20% of the nation’s electricity demand with wind energy is moving the electricity from the often remote areas where it is produced to the nation’s urban load centers. More transmission capacity and more sophisticated interconnections across the grid are needed to relieve congestion on the existing system, improve system reliability, increase access to energy at lower costs, and access new and remote generation resources. The Wind Program is working closely with the DOE Office of Electricity Delivery and Energy Reliability to effectively coordinate the DOE’s contributions to the transmission planning efforts. This joint program effort will focus on linking remote regions with low-cost wind power to urban load centers, allowing thousands of homes and businesses access to abundant renewable energy.
According to EIA, The United States annually emits approximately 6,000 million metric tons of CO2.These emissions are expected to increase to nearly 7,900 million metric tons by 2030, with the electric power sector accounting for approximately 40% of the total (EIA, 2007). Generating 20% of U.S. electricity from wind could avoid approximately 825 million metric tons of CO2 in the electric sector in 2030. The 20% scenario would also reduce cumulative emissions from the electric sector through that same year by more than 7,600 million metric tons of CO2 (2,100 million metric tons of carbon equivalent).
2
24
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 6: Wind Power Today—Building a New Energy Future
Clipper Windpower’s wind turbine manufacturing facility in Cedar Rapids, Iowa.
production. To fill the jobs created by this expansion, training programs are needed to provide a skilled workforce. To facilitate this growth, the Wind Program is working with universities and industry members to incorporate advanced materials into wind turbine blades and investigate manufacturing process automation and fabrication techniques to reduce productto-product variability and premature failure while increasing the domestic manufacturing base. To grow the skilled workforce, the program works with universities and K-12 schools to develop vibrant wind energy educational programs in locations across the country.
Advancing Wind Energy Technology DOE’s Wind Program has worked with industry for more than 25 years to advance both large and small wind energy technologies and lower the cost of energy. For large wind technologies, these industry partnerships have succeeded in increasing capacity factors and dramatically reducing costs. Capacity factors have increased from about 22% for wind turbines installed before 1998 to about 34% for turbines installed between 2004 and 2006. Costs have been reduced from $0.80 (current dollars) per kilowatt-hour (kWh) in 1980 to between $0.05 and $0.08/kWh today, so that in some areas of the nation, wind power has become the least expensive source of new utility-scale electricity generation. In order to increase industry growth, however, the technology must continue to evolve, building on earlier successes to further improve reliability, increase capacity factors, and reduce costs. To this end, in 2008, DOE announced a Memorandum of Understanding (MOU) designed to advance wind power technologies and increase deployment. Under this MOU (http://www.energy.gov/media/DOE_ Turbine_Manufactures_MOU_5-31-08.pdf), DOE is cooperating with six leading wind turbine manufacturers: GE Energy, Siemens Power Generation, Vestas Wind Systems, Clipper Turbine Works, Suzlon Energy, and Gamesa Corporation. The two-year collaboration is designed to increase turbine performance and reliability.
in nine of its national laboratories. The laboratories include: Argonne National Laboratory, Argonne, Illinois; Idaho National Laboratory, Idaho Falls, Idaho; Los Alamos National Laboratory, Los Alamos, New Mexico; Lawrence Berkeley National Laboratory, Berkeley, California; Lawrence Livermore National Laboratory, Livermore, California; National Renewable Energy Laboratory, Golden, Colorado; Oak Ridge National Laboratory, Oak Ridge, Tennessee; Pacific Northwest National Laboratory, Richland, Washington; and Sandia National Laboratories, Albuquerque, New Mexico. As the lead wind energy research facility, the National Renewable Energy Laboratory (NREL) conducts research across the broad spectrum of engineering disciplines that are applicable to wind energy, including: atmospheric fluid mechanics and aerodynamics; dynamics, structures, and fatigue; power systems and electronics; wind turbine engineering applications; and systems integration. As the only facility in the United States accredited through the American Association of Laboratory Accreditation (A2LA) to perform several critical tests, NREL’s National WInd Technology Center (NWTC) provides the high quality testing required by wind turbine certification agencies, financial institutions, and other organizations throughout the world. Tests accredited by A2LA to International Electrotechnical Commission (IEC) Standards include wind turbine noise, power performance, power quality, and several structural safety, function, and duration tests. The Idaho National Laboratory (INL) has more than 10 years of experience in wind-radar interaction R&D. INL staff work with wind
DOE’s R&D Capabilities To meet the many complex challenges facing the wind industry today, DOE draws on the capabilities and technical expertise found
NREL’s National Wind Technology Center provides high-quality testing for wind turbine systems and components. 3
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
25
Goverment Series: Energy: Wind
developers and radar site managers to mitigate wind-radar system interactions that may ultimately affect the development of wind plants. INL’s windradar interaction R&D efforts include conducting site-specific assessments to develop guidelines; improving radar software; improving hardware; filtering algorithms, gap filling, and fused radar systems; improving small plane detection; providing better modeling techniques; and developing computer modeling systems to predict performance before construction. Sandia National Laboratories (SNL) specializes in all aspects of wind turbine blade design and system reliability. Activities at SNL focus on reducing the cost of wind generated electricity and improving the reliability of systems operating nationwide. Research disciplines include: materials, airfoils, stress analysis, fatigue analysis, structural analysis, and manufacturing processes. By partnering with universities and industry, SNL has advanced the state of knowledge in the areas of materials, structurally efficient airfoil designs, active-flow aerodynamic control, and sensors. Lawrence Berkeley National Laboratory (LBL) works with DOE, state and federal policymakers, electric suppliers, renewable energy firms, and others to evaluate state and federal renewable energy policies and provide expert assistance in policy design; analyze the markets for and economics of various renewable energy sources; and examine the benefits and costs of increased market penetration of renewable energy technologies with a focus on wind and solar power. LBL also spearheads the program’s annual production of the Annual Report on U.S. Wind Power Installation, Cost, and Performance Trends. The Argonne, Los Alamos, Lawrence Livermore, Oak Ridge, and Pacific Northwest National Laboratories all provide support for the program’s systems integration research. t "SHPOOF /BUJPOBM -BCPSBUPSZ "/- JT EFWFMPQJOH improved methodologies for wind forecasting and working to increase the deployment of advanced wind forecasting techniques that will optimize overall grid reliability and system operations. t -PT "MBNPT /BUJPOBM -BCPSBUPSZ -"/- JT conducting power flow analysis of the western interconnect of scenarios associated with 20% electricity from wind by 2030 and of scenarios to reach state renewable electricity standards. t -BXSFODF -JWFSNPSF /BUJPOBM -BCPSBUPSZ --/-
is working to improve wind forecasting methods through the analysis and validation of SODAR and tall-tower data. Researchers at LLNL also work with utilities to effectively integrate improved wind forecasting information into control room operations.
Sandia National Laboratories developed an advanced data acquisition system (ATLAS II) on a GE Wind 1.5-MW wind turbine. The turbine is part of a cooperative activity involving SNL, GE Wind, and NREL.
Sandia researchers work with industry partners to develop the advanced materials and manufacturing processes required by longer blades.
Researchers at the NWTC structural test facility, which is accredited by A2LA to perform blade tests in accordance with IEC standards, conduct structural tests on full-scale wind turbine blades for subcontractors and industry partners. The facility can handle blades up to 45 meters in length.
The NWTC has two dynamometer test facilities—a 2.5-MW and a 225-kW—to help its industry partners conduct a wide range of tests on wind turbine drivetrains and gearboxes.
t 0BL 3JEHF /BUJPOBM -BCPSBUPSZ 03/- JT DPMMFDUJOH XJOE SFTPVSDF EBUB UP EFWFMPQ BO archive that will provide information for wind energy research, planning, operations, and site assessment. ORNL is also examining the issues involved in importing large quantities of wind energy to the southeastern United States to satisfy possible renewable portfolio standards. t 1BDJGJD /PSUIXFTU /BUJPOBM -BCPSBUPSZ 1//- JT FWBMVBUJOH UIF FGGFDUJWFOFTT PG integration strategies such as virtual balancing areas, sharing of regulation resources, operating reserves, area control error, and control room use of forecasting to address wind and load variability on the utility grid in the Pacific Northwest.
4
26
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 6: Wind Power Today—Building a New Energy Future
BOOSTING U.S. MANUFACTURING More than 90% of these jobs will be in the private sector, jobs . . . constructing wind turbines and solar panels. —President Barack Obama, remarks to Congress and the American people, February 24, 2009
T
he wind industry’s recent rapid growth has accelerated job creation, particularly in manufacturing. In that sector, the share of domestically manufactured wind turbine components has grown from about 30% in 2005 to approximately 50% in 2008. To ensure that this growth continues, the DOE Wind Program works with U.S. manufacturers to develop advanced fabrication techniques and automation processes that will enable them to increase their component production capabilities. The focus of the fabrication and materials research is to reduce the rate of weight growth as the blades increase in size. Using advanced materials such as carbon and carbon/glass hybrids will reduce the
weight of the blade while increasing its strength and flexibility. By using advanced materials and optimized blade sensors to enhance reliability and load control, researchers hope to extend the life of blades as well as other turbine components to reduce repair and replacement costs. The Wind Program is also exploring methods of improving resin transfer molding (RTM) and vacuum-assisted RTM manufacturing processes for utility-grade blades that incorporate automated processes to help manufacturers ensure consistent product quality and reduce labor.
SNL works with industry partners to develop advanced fabrication techniques and automation processes. 5
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
27
Goverment Series: Energy: Wind
will increase energy capture by 5% to 9%, significantly reducing the cost of energy (COE) of wind turbines at low-wind-speed sites. STAR can be deployed at sites with annual average wind speeds of 5.8 meters per second (m/s), measured at 10-m height. Such sites are abundant in the United States. The ability to site turbines in these areas would increase twentyfold the available land area on which wind energy can be economically developed. The Wind Program’s blade manufacturing research also includes work to develop: t .PSF FGGJDJFOU CMBEF TUSVDUVSFT TVDI BT UIJDL BJSGPJMT XJUI EFTJHOT that fully integrate structure and aerodynamics, along with slenderized blade geometries t "EBQUJWF TUSVDUVSFT TVDI BT QBTTJWF CFOEUXJTU DPVQMJOH BOE active-aero devices t %FTJHO EFUBJMT UP NJOJNJ[F TUSFTT DPODFOUSBUJPOT JO QMZ ESPQ regions (ply drop-off is a technique widely used to achieve gradual thickness change in composite laminate, and it can be used to form boundary tapering of a composite patch bonded to a parent structure) t -FTT FYQFOTJWF FNCFEEFE CMBEF SPPU BUUBDINFOU EFWJDFT
Creating Advanced Materials
The DOE Wind Program worked with Knight & Carver to develop an innovative wind turbine blade that the company expects to increase energy capture by 5% to 9%. The most distinctive feature of the Sweep Twist Adaptive Rotor (STAR) blade is its gently curved tip.
During the past few years, the Wind Program has worked with blade manufacturer Knight & Carver to develop an innovative wind turbine blade design that is the first of its kind to be produced at a utility-grade size, and which promises to be more efficient than conventional designs. Made of fiberglass and epoxy resin, the Sweep Twist Adaptive Rotor (STAR) blade is 27 m long—almost 3 m longer than the blade it will replace. Instead of the traditional linear shape, the blade curves toward the trailing edge, which allows it to respond to turbulent gusts in a manner that reduces fatigue loads on the blade. The STAR blade was specially designed for maximum energy capture at low wind speed sites. Knight & Carver expects that STAR
Today’s utility-scale wind turbine blades are fabricated with conventional composite materials such as fiberglass, polyester and vinyl ester resins, and core (balsa or foam). They have a rotor diameter span between 57 m and 90 m and have a power generation capacity of between 1 MW and 3 MW. The newest turbine design concepts will take wind power generation far beyond the 1-MW to 3-MW range and will require much larger turbine blades with more efficient architectures, load alleviation concepts, and a higher content of carbon fiber and epoxy resins. Wind Program researchers are developing several new blade material options for wind turbine manufacturers, including carbon, carbon-hybrid, S-glass, and other new material forms. They are creating design details that minimize stress concentrations in ply drop-off regions and are developing less expensive, embedded blade attachment devices. One of the program’s latest studies conducted by researchers at SNL presents an overview of composite laminates for wind turbine blade construction and summarizes test results for three prototype blades that incorporate a variety of structural and material innovations. The study examines recent SNL-sponsored material fatigue testing performed at Montana State University and provides highlights of the SNL/Global Energy Concepts Blade System Design Study-Phase II research that tested a variety of carbon and carbonhybrid materials. The blades tested under this study survived 20-year equivalent fatigue test loads thus demonstrating the value of incorporating carbon into wind turbine blades. Although cost and market stability remain as challenges for large implementation of carbon in commercial designs, the methodologies developed by these projects will enable blades to be lighter, stronger, and smarter. For more information on the studies conducted at SNL visit www. sandia.gov/wind/topical.htm.
6
28
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 6: Wind Power Today—Building a New Energy Future
ADVANCING LARGE WIND TURBINE TECHNOLOGY We’ve also made the largest investment in basic research funding in American history, an investment that will spur not only new discoveries in energy, but breakthroughs . . . in science and technology. —President Barack Obama, remarks to Congress and the American people, February 24, 2009
T
GE 1.5-MW wind turbine
hree decades of wind energy research have succeeded in greatly increasing wind turbine size and capacity, from 100-kW machines with a 17-m rotor diameter to multimegawatt machines with rotor diameters larger than 100 m, while greatly reducing the cost of wind energy. Although these improvements in performance, reliability and cost have all contributed to the success enjoyed by the wind industry today, to achieve 20% wind energy, the technology must continue to evolve. Continued incremental improvements can further reduce system cost and increase performance and reliability. These improvements can only be achieved through a systems development and integration approach. No single component improvement in cost or efficiency can achieve the cost reduction or improved capacity factor that system-level advances can achieve. Capacity factors can be increased by using larger rotors on taller towers, which requires innovative design approaches and advanced materials, controls, and power systems. Costs can be reduced and
Since 1980, wind turbines have grown in size and capacity, from 100-kW machines with a 17-m rotor diameter to multimegawatt machines with rotor diameters larger than 100 m. 7
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
29
Chapter 7: Wind Power in the United States: Technology, Economic, and Policy Issues
Wind Power in the United States: Technology, Economic, and Policy Issues Stan Mark Kaplan Specialist in Energy and Environmental Policy October 21, 2008
Congressional Research Service 7-5700 www.crs.gov RL34546
CRS Report for Congress Prepared for Members and Committees of Congress
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
45
Goverment Series: Energy: Wind
Wind Power in the United States: Technology, Economic, and Policy Issues
Summary Rising energy prices and concern over greenhouse gas emissions have focused congressional attention on energy alternatives, including wind power. Although wind power currently provides only about 1% of U.S. electricity needs, it is growing more rapidly than any other energy source. In 2007, over 5,000 megawatts of new wind generating capacity were installed in the United States, second only to new natural gas-fired generating capacity. Wind power has become “mainstream” in many regions of the country, and is no longer considered an “alternative” energy source. Wind energy has become increasingly competitive with other power generation options, although the impacts of the current financial crisis are uncertain. Wind technology has improved significantly over the past two decades. CRS analysis presented here shows that wind energy still depends on federal tax incentives to compete, but that key uncertainties like climate policy, fossil fuel prices, and technology progress could dominate future cost competitiveness. A key challenge for wind energy is that electricity production depends on when winds blow rather than when consumers need power. Wind’s variability can create added expenses and complexity in balancing supply and demand on the grid. Recent studies imply that these integration costs do not become significant (5%-10% of wholesale prices) until wind turbines account for 15%-30% of the capacity in a given control area. Another concern is that new transmission infrastructure will be required to send the wind-generated power to demand centers. Building new lines can be expensive and time-consuming, and there are debates over how construction costs should be allocated among end-users and which pricing methodologies are best. Opposition to wind power arises for environmental, aesthetic, or aviation security reasons. New public-private partnerships have been established to address more comprehensively problems with avian (bird and bat) deaths resulting from wind farms. Some stakeholders oppose the construction of wind plants for visual reasons, especially in pristine or highly-valued areas. A debate over the potential for wind turbines to interfere with aviation radar emerged in 2006, but most experts believe any possible problems are economically and technically manageable. Federal wind power policy has centered primarily on the production tax credit (PTC), a business incentive to operate wind facilities. The PTC is currently set to expire on December 31, 2009. Analysts and wind industry representatives argue that the on-again off-again nature of the PTC is inefficient and leads to higher costs for the industry. A federal renewable portfolio standard— which would mandate wind power levels—was rejected in the Senate in late 2007; its future is uncertain. If wind is to supply up to 20% of the nation’s power by 2030, as suggested by a recent U.S. Department of Energy report, additional federal policies will likely be required to overcome barriers, and ensure development of an efficient wind market.
Congressional Research Service
46
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 7: Wind Power in the United States: Technology, Economic, and Policy Issues
Wind Power in the United States: Technology, Economic, and Policy Issues
Contents Introduction ................................................................................................................................1 Background ................................................................................................................................2 The Rise of Wind ..................................................................................................................2 Benefits and Drawbacks of Wind Power................................................................................4 Wind Resources and Technology.................................................................................................7 Wind Power Fundamentals....................................................................................................7 Physical Relationships ....................................................................................................7 Wind Resources ....................................................................................................................8 Offshore Wind ................................................................................................................9 Wind Power Technology ..................................................................................................... 10 Types of Wind Turbines ................................................................................................ 11 Capacity Factor............................................................................................................. 13 Wind Research and Development Emphasis .................................................................. 13 Wind Industry Composition and Trends..................................................................................... 14 Wind Turbine Manufacturers and Wind Plant Developers.................................................... 17 International Comparisons................................................................................................... 18 Wind Power Economics ............................................................................................................ 21 Cost and Operating Characteristics of Wind Power.............................................................. 21 Wind Operation and System Integration Issues .............................................................. 23 Levelized Cost Comparison ................................................................................................ 24 Wind Policy Issues.................................................................................................................... 30 Siting and Permitting Issues ................................................................................................ 30 Transmission Constraints .................................................................................................... 33 Federal Renewable Transmission Initiatives .................................................................. 36 Renewable Production Tax Credit ....................................................................................... 36 PTC Eligibility: IOUs vs. IPPs ...................................................................................... 37 Specific PTC Legislative Options.................................................................................. 37 Carbon Constraints and the PTC ................................................................................... 38 Alternatives to the PTC................................................................................................. 39 Renewable Portfolio Standards............................................................................................ 39 Federal RPS Debate ...................................................................................................... 39 Conclusions .............................................................................................................................. 40
Figures Figure 1. Cumulative Installed U.S. Wind Capacity .....................................................................3 Figure 2. Wind Power Aerodynamics ..........................................................................................7 Figure 3. U.S. Wind Resources Potential .....................................................................................9 Figure 4. Evolution of U.S. Commercial Wind Technology........................................................ 11 Figure 5. Components in a Simplified Wind Turbine ................................................................. 12 Figure 6. Installed Wind Capacity By State in 2007 ................................................................... 15 Figure 7. Existing and Planned North American Wind Plants by Size ........................................ 16 Congressional Research Service
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
47
Goverment Series: Energy: Wind
Wind Power in the United States: Technology, Economic, and Policy Issues
Figure 8. U.S. Wind Turbine Market Share by Manufacturer in 2007......................................... 17 Figure 9. Global Installed Wind Capacity By Country ............................................................... 19 Figure 10. Component Costs for Typical Wind Plants ................................................................ 22
Tables Table 1. Wind Energy Penetration Rates by Country.................................................................. 19 Table 2. Assumptions for Generating Technologies.................................................................... 25 Table 3. Economic Comparison of Wind Power with Alternatives.............................................. 29 Table 4. Selected Wind Power Tax Incentive Bills Compared .................................................... 38 Table A-1. Base Case Financial Factors..................................................................................... 43 Table A-2. Base Case Fuel and Allowance Price Forecasts......................................................... 44 Table A-3. Power Plant Technology Assumptions ...................................................................... 45
Appendixes Appendix. Financial Analysis Methodology and Assumptions ................................................... 41
Contacts Author Contact Information ...................................................................................................... 46
Congressional Research Service
48
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 7: Wind Power in the United States: Technology, Economic, and Policy Issues
Wind Power in the United States: Technology, Economic, and Policy Issues
Introduction Rising energy prices and concern over greenhouse gas emissions have focused congressional attention on energy alternatives, including wind power. Although wind power currently provides only a small fraction of U.S. energy needs, it is growing more rapidly than any other electricity source. Wind energy already plays a significant role in several European nations, and countries like China and India are rapidly expanding their capacity both to manufacture wind turbines and to integrate wind power into their electricity grids. This report describes utility-scale wind power issues in the United States. The report is divided into the following sections: •
Background on wind energy;
•
Wind resources and technology;
•
Industry composition and trends;
•
Wind power economics; and
•
Policy issues.
Three policy issues may be of particular concern to Congress: •
Should the renewable energy production tax credit be extended past its currently scheduled expiration at the end of 2009, and, if so, how would it be funded? The economic analysis suggests that the credit significantly improves the economics of wind power compared to fossil and nuclear generation.
•
Should the Congress pass legislation intended to facilitate the construction of new transmission capacity to serve wind farms? As discussed below, sites for wind facilities are often remote from load centers and may require new, expensive transmission infrastructure. Texas and California have implemented state policies to encourage the development of new transmission lines to serve wind and other remote renewable energy sources. Legislation before the Congress would create a federal equivalent.
•
Should the Congress establish a national renewable portfolio standard (RPS)? As discussed in the report, the economics of wind are competitive, but not always compelling, compared to fossil and nuclear energy options, and because wind power is dependent on the vagaries of the weather it is not as reliable as conventional sources. Some benefits of wind power cited by proponents, such as a long-term reduction in demand for fossil fuels, are not easily quantified. To jump-start wind power development past these hurdles, many states have instituted RPS programs that require power companies to meet minimum renewable generation goals. A national RPS requirement has been considered and, to date, rejected by Congress.
Other policy questions, such as federal funding for wind research and development, and siting and permitting requirements, are also outlined.
Congressional Research Service
1
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
49
Chapter 7: Wind Power in the United States: Technology, Economic, and Policy Issues
Wind Power in the United States: Technology, Economic, and Policy Issues
Figure 4. Evolution of U.S. Commercial Wind Technology
Source: L. Flowers, “Wind Energy Update,” National Renewable Energy Lab, February 2008.
Utility-scale wind turbines have grown in size from dozens of kilowatts in the late 1970s and early 1980s to a maximum of 6 megawatts in 2008.39 The average size of a turbine deployed in the United States in 2007 was 1.6 megawatts, enough to power approximately 430 U.S. homes. 40 The average size of turbines continues to expand as units rated between 2 and 3 megawatts become more common. Larger turbines provide greater efficiency and economy of scale, but they are also more complex to build, transport, and deploy.
Types of Wind Turbines Industrial wind turbines fall into two general classes depending on how they spin: horizontal axis and vertical axis, also known as “eggbeater” turbines. Vertical axis machines, which spin about an axis perpendicular to the ground, have advantages in efficiency and serviceability since all of the control equipment is at ground level. The main drawback to this configuration, however, is that the blades cannot be easily elevated high into the air where the best winds blow. As a result, horizontal axis machines—which spin about an axis parallel to the ground rather than perpendicular to it—have come to dominate today’s markets.41 39 The German company Enercon is testing two different 6 megawatt turbines, although they are not yet available on commercial markets. The largest commonly used commercial wind turbines are the 3.6 megawatt offshore units produced by Siemens and General Electric. 40 This assumes a capacity factor (see following subsection) of 34% and an EIA estimate of the average U.S. household consumption of 11,000 kilowatt-hours per year. 41 Horizontal turbines are further divided into classes depending on generator placement, type of generator, and blade control. For example, downwind turbines have their blades behind the generator and upwind turbines, in front. Generators can be asynchronous with the grid, or operate at the same frequency. Blade speed can be fixed or variable, and controlled through pitch or stall aerodynamics. For a more complete discussion of wind turbine technical issues, see P. Carlin, A. Laxson, and E. Muljadi, The History and State of the Art of Variable-Speed Wind Turbines, NREL, February 2001.
Congressional Research Service
11
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
59
Goverment Series: Energy: Wind
Wind Power in the United States: Technology, Economic, and Policy Issues
A simplified diagram of a typical horizontal axis wind turbine is shown in Figure 5. The blades connect to the rotor and turn a low-speed shaft that is geared to spin a higher-speed shaft in the generator. An automated yaw motor system turns the turbine to face the wind at an appropriate angle. 42 Figure 5. Components in a Simplified Wind Turbine
There are barriers to the size of wind turbines that can be efficiently deployed, especially at onshore locations. Wind turbine components larger than standard over-the-road trailer dimensions and weight limits face expensive transport penalties. 43 Other barriers to increasingly large turbines include (1) potential for aviation and radar interference, (2) local opposition to siting, (3) erection challenges (i.e., expensive cranes are needed to lift the turbine hubs to a height of 300 feet or more), and (4) material fatigue issues. Some of these issues are discussed in more detail later. 42 Generally, the yaw control will position the turbine to face the wind at a perpendicular angle. The turbine can avoid damage from excessive wind speeds by yawing away from the wind or applying the brake. 43 The standard trailer for an 18-wheel tractor trailer is approximately 12.5 feet high and 8 feet wide. Gross vehicle weight limitations are 80,000 pounds, corresponding to a cargo weight of 42,000 pounds. According to NREL, the trailer limitations have the greatest impact on the base diameter of wind turbine towers. R. Thresher and A. Laxson, “Advanced Wind Technology: New Challenges for a New Century,” NREL, June 2006.
Congressional Research Service
60
12
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 7: Wind Power in the United States: Technology, Economic, and Policy Issues
Wind Power in the United States: Technology, Economic, and Policy Issues
Appendix. Financial Analysis Methodology and Assumptions The financial analysis of power plant costs in this report estimates the operating costs and required capital recovery of each generating technology for an analysis period through 2050. Plant operating costs will vary from year to year depending, for example, on changes in fuel prices and the start or end of government incentive programs. To simplify the comparison of alternatives, these varying yearly expenses are converted to a uniform annual cost expressed as 2008 present value dollars.122 Similarly, the capital costs for the generating technologies are also converted to levelized annual payments. An investor-owned utility or independent power project developer must recover the cost of the investment and a return on the investment, accounting for income taxes, tax law (depreciation rates), and the cost of money. These variables are encapsulated within an annualized capital cost for a project computed using a “capital charge rate.” The financial model used for this study computes a project-specific capital charge rate that reflects, for example, the assumed cost of money and the applicable depreciation schedule. In the case of publicly owned utilities the return on capital is a function of the interest rate. A “capital recovery factor” reflecting each project’s cost of money is computed and used to calculate a mortgage-type levelized annual payment.123 Combining the annualized capital cost with the annualized cash flows yields the total estimated annualized cost of a project. This annualized cost is divided by the projected yearly output of electricity to produce a cost per Mwh for each technology. By “annualizing” the costs in this manner it is possible to compare alternatives with different year-to-year cost patterns on an apples-to-apples basis. Inputs to the financial model include financing costs, forecasted fuel prices, non-fuel operations and maintenance expense, the efficiency with which fossil-fueled plants convert fuel to electricity, and typical utilization rates (see Table A-1, Table A-2, and Table A-3). Most of these inputs are taken from published sources, such as EIA’s assumptions used to produce its 2007 and 2008 long-term energy forecasts. Overnight power plant capital costs—that is, the cost to construct a plant before financing expenses—are estimated by CRS based on a review of public information on recent projects.
122 Converting a series of cash flows to a financially-equivalent uniform annual payment is a two-step process. First, the cash flows for the project are converted to a 2008 “present value.” The present value is the total cost for the analysis period, adjusted (“discounted” using a “discount factor”) to account for the time value of money and the risk that projected costs will not occur as expected. This lump-sum 2008 present value is then converted to an equivalent annual payment using a uniform payments factor (the “capital recovery factor”). For a more detailed discussion of the levelization method see, for example, Chan Park, Fundamentals of Engineering Economics, 2004, Chapter 6; or Eugene Grant, et al., Principles of Engineering Economy, 6th Ed., 1976, Chapter 7. 123 For additional information on capital charge rates see Hoff Stauffer, “Beware Capital Charge Rates,” The Electricity Journal, April 2006. The capital recovery factor is equivalent to the PMT function in the Excel spreadsheet program. For additional information on the calculation of capital recovery factors see Chan Park, Fundamentals of Engineering Economics, 2004, Chapter 2; or Eugene Grant, et al., Principles of Engineering Economy, 6th Ed., 1976, Chapter 4.
Congressional Research Service
41
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
89
Goverment Series: Energy: Wind
Wind Power in the United States: Technology, Economic, and Policy Issues
Government incentives are also an important part of the financial analysis. EPACT05 created or extended federal incentive programs for coal, nuclear, and renewable technologies. This study assumes the following incentives: •
A renewable energy production tax credit of 2.0 cents per kWh, with the value indexed to inflation. The credit applies to the first 10 years of a plant’s operation. The Base Case analysis assumes that the tax credit, which is currently scheduled to expire at the end of 2008, will be extended (as has happened in the past). The credit is available only to wind power production that is sold to an unaffiliated third party. Under most circumstances this requirement effectively limits the production tax credit to independent power producers. A utility that owns a wind plant and uses the power to serve its own load would not qualify.124 The credit is currently available to new wind, geothermal, and several other renewable energy sources. New solar energy systems do not qualify, and geothermal systems can take the production tax credit only if they do not use the renewable investment tax credit (discussed below).
•
A nuclear energy production tax credit for new advanced nuclear plants of 1.8 cents per kWh. The credit applies to the first eight years of operation. Unlike the renewable production tax credit described above, the nuclear credit is not indexed to inflation and therefore drops in real value over time. This credit is subject to several limitations:
•
•
It is available to plants that begin construction before January 1, 2014, and enter service before January 1, 2021.
•
For each project the annual credit is limited to $125 million per thousand megawatts of generating capacity.
•
The full amount of the credit will be available to qualifying facilities only if the total capacity of the qualifying facilities is 6,000 megawatts or less. If the total qualifying capacity exceeds 6,000 megawatts the amount of the credit available to each plant will be prorated. For example, EIA assumes in its 2007 Annual Energy Outlook that 9,000 megawatts of new nuclear capacity qualifies; in this case the credit amount drops to 1.2 cents per kWh. 125 The Base Case for this study follows EIA in using the 1.2 cent per kWh assumption for the effective value of the credit.
Loan guarantees for carbon-control technologies, including nuclear power. Under final DOE rules, the loan guarantees can cover up to 80% of the cost of a project. Guarantees are made available based on a case-by-case evaluation of applicants and are dependent on congressional authority (in April 2008, the Department of Energy announced plans to solicit up to $18.5 billion in loan guarantee applications for nuclear projects126). Entities receiving loan guarantees must make a “credit subsidy cost” payment to the federal treasury that reflects the net anticipated cost of the guarantee to the government, including a
124
See 10 CFR § 451.4. For a discussion of the credit see EIA, Annual Energy Outlook 2007, p. 21. 126 DOE Announces Plans for Future Loan Guarantee Solicitations, Department of Energy press release, April 11, 2008. Loan guarantee authority of $18.5 billion for nuclear power plants is provided by P.L. 110-161. 125
Congressional Research Service
90
42
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 7: Wind Power in the United States: Technology, Economic, and Policy Issues
Wind Power in the United States: Technology, Economic, and Policy Issues
probability of default. The guarantees are, under current rules, unlikely to be available to public power entities. 127 •
Energy Investment Tax Credit. Tax credits under this program are available to certain renewable energy systems, including solar and geothermal electricity generation, and some other innovative energy technologies. Wind energy systems do not qualify. The credit is 10% for systems installed after January 1, 2009. Geothermal projects that take the investment tax credit cannot take the renewable production tax credit.128
The results of the analysis are shown in the main body of the report. Note that these estimates are approximations subject to a high degree of uncertainty over such factors as future fuel and capital costs. The rankings of the technologies by cost are therefore also an approximation and should not be viewed as a definitive estimate of the relative cost-competitiveness of each option. Also note that site-specific factors would influence an actual developer’s choice of generating technologies. For example, coal may be less costly if a plant is close to coal mines, and the economics of wind depend in part on the strength and consistency of the wind in a given area. Table A-1. Base Case Financial Factors Item
Value
Sources and Notes
Representative Bond Interest Rates Utility Aa
2010: 6.8% 2015: 7.0% 2020: 7.0%
IPP High Yield
2010: 9.8% 2015: 10.0% 2020: 10.0%
Public Power Aaa
2010: 5.1% 2015: 5.4% 2020: 5.4%
Corporate Aaa
2010: 6.3% 2015: 6.5% 2020: 6.5%
Cost of Equity—Utility
14.00%
Cost of Equity—IPP
15.19%
California Energy Commission, “Comparative Cost of California Cental Station Electricity Generating Technologies,” December 2007, Table 8.
Debt Percent of Capital Structure
Utility: 50% IPP: 60% Utility or IPP with
Northwest Power and Conservation Council, “The Fifth Northwest Electric Power and Conservation Plan,” May
When available, interest rates for investment grade bonds with a rating of Baa or higher (i.e., other than high yield bonds) are Global Insight forecasts. When Global Insight does not forecast an interest rate for an investment grade bond the value is estimated based on historical relationships between bond interest rates (the historical data for this analysis is from the Global Finance website). High yield interest rates are estimated based on the differential between Merrill Lynch high yield bond indices and corporate Baa rates, as reported by WSJ.com (Wall Street Journal website).
127 Entities receiving loan guarantees must make a substantial equity contribution to the project’s financing. Public power entities normally do not have the retained earnings needed to make such payments. The rules also preclude granting a loan guarantee if the federal guarantee would cause what would otherwise be tax exempt debt to become subject to income taxes. Under current law this situation would arise if the federal government were to guarantee public power debt. For further information on these and other aspects of the loan guarantee program see U.S. DOE, final rule, “Loan Guarantees for Projects that Employ Innovative Technologies,” 10 C.F.R. § 609 (RIN 1901-AB21), October 4, 2007 http://www.lgprogram.energy.gov/keydocs.html. 128 For additional information see the discussion of the investment tax credit in the federal incentives section of the Database of State Incentives for Renewable Energy website, http://www.dsireusa.org/.
Congressional Research Service
43
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
91
Goverment Series: Energy: Wind
Wind Power in the United States: Technology, Economic, and Policy Issues
Item
Value
Sources and Notes
federal loan guarantee: 80% POU: 100%
2005, Table I-1.
Cost of equity premium for entities using 80% financing.
1.75 percentage points
Credit Subsidy Cost
12.5% of loan value
Congressional Budget Office, Nuclear Power’s Role in Generating Electricity, May 2008, web supplement (“The Methodology Behind the Levelized Cost Analysis”), Table A-5 and page 9.
Long-Term Inflation Rate (change in the implicit price deflator)
1.9%
Global Insight
Composite Federal/State Income Tax Rate
38%
EIA, National Energy Modeling System Documentation, Electricity Market Module, March 2006, p. 85.
Federal Loan Guarantees
Notes: EIA = Energy Information Administration; IOU = Investor Owned Utility; POU = Publicly Owned Utility; IPP = Independent Power Producer. For a summary of bond rating criteria see http://www.bondsonline.com/ Bond_Ratings_Definitions.php. “High yield” refers to bonds with a rating below Baa.
Table A-2. Base Case Fuel and Allowance Price Forecasts Delivered Fuel Prices, Constant 2008$ per Million Btus
Air Emission Allowance Price, 2008$ per Allowance
Coal
Natural Gas
Nuclear Fuel
2010
$1.93
$7.51
$0.58
Sulfur Dioxide $249
Nitrogen Oxides
2020
$1.80
$6.41
$0.67
$1,074
$3,252
2030
$1.87
$7.48
$0.67
$479
$3,360
2040
$1.96
$9.17
$0.65
$158
$3,180
2050
$2.06
$11.24
$0.63
$52
$3,009
$2,636
Sources: Forecasts are from the assumptions to the Energy Information Administration’s 2008 Annual Energy Outlook, which assumes implementation of current law and regulation. The original values in 2006 dollars were converted to 2008 dollars using the Global Insight forecast of the change in the implicit price deflator. The EIA forecasts are to 2030; the forecasts are extended to 2050 using the 2025 to 2030 growth rates. The sulfur dioxide and nitrogen oxides allowance forecasts are for the eastern region of the United States (allowance prices are expected to vary regionally under the Clean Air Interstate Rule). Note: Btu = British thermal unit.
Congressional Research Service
92
44
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Goverment Series: Energy: Wind
Distributed Wind Market Applications
Technical Report
NREL/TP-500-39851 November 2007
T. Forsyth and I. Baring-Gould Prepared under Task No. WER6.7502
National Renewable Energy Laboratory 1617 Cole Boulevard, Golden, Colorado 80401-3393 303-275-3000 x www.nrel.gov Operated for the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy by Midwest Research Institute x Battelle Contract No. DE-AC36-99-GO10337
100
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Goverment Series: Energy: Wind
Table of Contents CHAPTER 1. EXECUTIVE SUMMARY.................................................................................................................1 I. SUMMARY OF MARKET POTENTIAL ........................................................................................................................3 II. SUMMARY OF DOMESTIC MARKETS FOR DISTRIBUTED WIND TECHNOLOGIES .....................................................4 III. SUMMARY OF INTERNATIONAL MARKET FOR DISTRIBUTED WIND TECHNOLOGIES ............................................8 IV. MARKET-BASED BARRIERS TO THE DISTRIBUTED WIND MARKET ....................................................................11 V. TECHNICAL BARRIERS TO THE DISTRIBUTED WIND MARKET .............................................................................12 VI. ACKNOWLEDGEMENTS ......................................................................................................................................13 VII. CONCLUSION ....................................................................................................................................................13 CHAPTER 2. SMALL-SCALE REMOTE OR OFF-GRID POWER..................................................................15 I. EXECUTIVE SUMMARY .........................................................................................................................................15 II. APPLICATION BACKGROUND ...............................................................................................................................15 III. CURRENT STATUS OF SMALL-SCALE WIND .......................................................................................................16 IV. MARKET BARRIERS ISSUES AND ASSESSMENT ..................................................................................................17 Expected United States Market ..........................................................................................................................17 Expected International Market...........................................................................................................................17 Technology Adoption Timeframe .......................................................................................................................19 Non-Technical Barriers for Technology Adoption.............................................................................................20 Time-Critical Issues ...........................................................................................................................................22 Incentive Markets...............................................................................................................................................22 Utility Industry Perspectives ..............................................................................................................................22 V. TECHNICAL BARRIERS ISSUES AND ASSESSMENT ...............................................................................................23 Barriers for Small-Scale Turbines .....................................................................................................................23 VI. RECOMMENDED AREAS OF TECHNICAL CONCENTRATION .................................................................................26 Technical Challenges.........................................................................................................................................26 VII. CONCLUSIONS ..................................................................................................................................................30 VIII. REFERENCES ...................................................................................................................................................31 CHAPTER 3. RESIDENTIAL POWER .................................................................................................................32 I. EXECUTIVE SUMMARY .........................................................................................................................................32 II. APPLICATION BACKGROUND ...............................................................................................................................33 III. CURRENT STATUS OF GRID-CONNECTED RESIDENTIAL DISTRIBUTED GENERATION .........................................34 The Future..........................................................................................................................................................34 IV. MARKET BARRIERS ISSUES AND ASSESSMENT ..................................................................................................35 Expected United States Market ..........................................................................................................................35 Expected International Market...........................................................................................................................39 Technology Adoption Time Frame.....................................................................................................................40 Non-Technical Barriers for Technology Adoption.............................................................................................41 Economics ..........................................................................................................................................................41 Lack of Incentives...............................................................................................................................................44 Subsidy Market for Residential Wind Distributed Generation...........................................................................46 Utility Industry Impact of Residential Distributed Generation ..........................................................................46 V. TECHNICAL BARRIERS ISSUES AND ASSESSMENT ...............................................................................................49 Technology Barriers for Distributed Wind Generation .....................................................................................49 Expected Turbine Size for Residential Distributed Generation .........................................................................52 Required Cost of Energy ....................................................................................................................................53 Seasonality and Geographic Nature of Wind Resource .....................................................................................54 Impact of Intermittency on Residential Wind Energy.........................................................................................55 Interface between Turbine and Wind-Distributed Generation...........................................................................55 VI. RECOMMENDED AREAS OF TECHNICAL CONCENTRATION .................................................................................55 The Future..........................................................................................................................................................55 VII. CONCLUSIONS ..................................................................................................................................................58 VIII. ACKNOWLEDGEMENTS....................................................................................................................................59 IX. REFERENCES ......................................................................................................................................................59
i
102
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 9: Distributed Wind Market Applications
X. BIBLIOGRAPHY ...................................................................................................................................................61 CHAPTER 4. FARM, INDUSTRY, AND SMALL BUSINESS ............................................................................61 I. EXECUTIVE SUMMARY .........................................................................................................................................61 II. APPLICATION BACKGROUND ...............................................................................................................................62 III. CURRENT STATUS OF ACTIVITIES FOR THIS APPLICATION .................................................................................62 IV. MARKET BARRIERS ISSUES AND ASSESSMENT ..................................................................................................63 Expected Market in the United States ................................................................................................................63 Expected International Market...........................................................................................................................65 V. TECHNICAL BARRIERS ISSUES AND ASSESSMENT ...............................................................................................65 VI. RECOMMENDED AREAS OF TECHNICAL CONCENTRATION .................................................................................66 VII. CONCLUSIONS ..................................................................................................................................................67 VIII. REFERENCES ...................................................................................................................................................69 XI. BIBLIOGRAPHY ..................................................................................................................................................69 CHAPTER 5. “SMALL-SCALE” COMMUNITY WIND POWER ....................................................................70 I. EXECUTIVE SUMMARY .........................................................................................................................................70 II. APPLICATION BACKGROUND ...............................................................................................................................71 III. CURRENT STATUS OF COMMUNITY WIND ..........................................................................................................72 IV. MARKET BARRIERS ISSUES & ASSESSMENT ......................................................................................................74 Expected U.S. Market for “Small-Scale” Community Wind Applications.........................................................74 Expected International Market for “Small-Scale” Community Wind Applications...........................................75 “Small-Scale” Community Wind Technology Adoption Time Frame................................................................76 Non-Technical Barriers for “Small-Scale” Community Wind Technology Adoption........................................78 Time-Critical Nature of “Small-Scale” Community Wind Technology .............................................................80 Subsidy Market for “Small-Scale” Community Wind ........................................................................................82 Utility Industry Impact of “Small-Scale” Community Wind ..............................................................................82 V. TECHNICAL BARRIERS ISSUES AND ASSESSMENT ...............................................................................................83 Technology Barriers for “Small-Scale” Community Wind................................................................................83 Complexity of “Small-Scale” Community Wind Technology Barriers ..............................................................85 Expected Turbine Size to Meet “Small-Scale” Community Wind Market .........................................................85 Required Cost of Energy to Compete in “Small-Scale” Community Wind Market ...........................................86 Seasonality and Geographic Nature of Wind Resource .....................................................................................86 Impact of Intermittency ......................................................................................................................................86 Interface for “Small-Scale” Community Wind ..................................................................................................87 VI. RECOMMENDED AREAS OF TECHNICAL CONCENTRATION .................................................................................88 The Future..........................................................................................................................................................88 VII. CONCLUSIONS ..................................................................................................................................................91 VIII. ACKNOWLEDGEMENTS....................................................................................................................................91 IX. REFERENCES ......................................................................................................................................................92 X. BIBLIOGRAPHY ...................................................................................................................................................93 XI. APPENDIX A ......................................................................................................................................................95
ii
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
103
Goverment Series: Energy: Wind
Table of Figures Figure E.1. Overview of market segments and commercial wind turbines ........................................ 3 Figure E-2. Market projections using number of units installed in the United States ........................ 5 Figure E.3. Incremental domestic installed capacity by sector through 2020 .................................... 7 Figure E.4. Potential capacity variation for all domestic market segments........................................ 8 Figure E.5. Incremental international installed capacity by sector through 2020 without data for off-grid or small-system segment (which is too large to show graphically)................................. 10 Figure E.6. Potential capacity variation for all international market segments .................................. 10 Figure 3-1. Renewable energy system end-use information from Home Power readers’ survey ...... 36 Figure 3-2. Renewable energy end-user information from Home Power readers survey .................. 38 Figure 3-3. Constructing a demand curve for DWT – experience from PV [27] ............................... 44 Figure 3-4. United States residential average retail price of electricity by state, 2004 (cents/kWh).. 54 Figure 5-1. United States large- and small-scale community wind energy market upper-bound growth forecast.............................................................................................................................. 72 Table of Tables Table E.1. Market Projections of Domestically Installed Units ......................................................... 5 Table E.2. Projected Domestic Installed Capacity (MW) by Sector through 2020............................ 6 Table E.3. Cumulative Installed International Capacity in MW by Sector through 2020.................. 9 Table 2-1. Electrical Access in Developing Countries by Region (Year 2000) ................................. 20 Table 2-2. Summary Information Table: Small-Scale Remote Power (Residential or Village) ........ 29 Table 3-1. 2006 Survey Responses on Grid-Connected Residential Wind Market Barriers.............. 43 Table 3-2. Small Wind Programs by State.......................................................................................... 48 Table 3-3. 2006 Grid-Connected Survey Responses .......................................................................... 51 Table 3-4. Average Customer Load in kWh/year, by State and Segment .......................................... 53 Table 3-5. Summary Information Table: Residential Power .............................................................. 57 Table 4-1. Summary Information Table: Farm, Industry, and Small Business .................................. 68 Table 5-1. 2006 Survey Responses on “Small-Scale” Community Wind Market Barriers................ 80 Table 5-2. 2006 Survey Responses on “Small-Scale” Community Wind Technical Barriers ........... 84 Table 5-3. Summary Information Table: “Small-Scale” Community Wind Power ........................... 90 Table 5-4. Community-Owned Wind Projects Utilizing Turbines from 100 kW to 1,000 kW ......... 95
iii
104
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 9: Distributed Wind Market Applications
Chapter 1. Executive Summary The Executive Summary will discuss the distributed wind market potential from a domestic and international perspective with greater confidence in the number of units installed for the domestic market. The market potential discussion will be followed by a summary of information provided in each chapter, including regions of market interest for both the domestic and international market, key market and technical barriers, time-critical issues for market development, technology adoption timeframe, and recommended areas of concentration. Distributed wind energy systems provide clean, renewable power for on-site use and help relieve pressure on the power grid while providing jobs and contributing to energy security for homes, farms, schools, factories, private and public facilities, distribution utilities, and remote locations. America pioneered small wind technology in the 1920s, and it is the only renewable energy industry segment that the United States still dominates in technology, manufacturing, and world market share. The series of analyses covered by this report were conducted to assess some of the most likely ways that advanced wind turbines could be utilized as an option to large, central station power systems. Each chapter represents a final report on specific market segments written by leading experts in each sector. As such, this document does not speak with one voice but rather a compendium of different perspectives from the U.S. distributed wind field. For this analysis, the U.S. Department of Energy (DOE) Wind and Hydropower Technologies Program and the National Renewable Energy Laboratory’s (NREL’s) National Wind Technology Center (NWTC) defined distributed applications as wind turbines of any size that are installed remotely or connected to the grid but at a distribution-level voltage. Distributed wind systems generally provide electricity on the retail side of the electric meter without need of transmission lines, offering a strong, low-cost alternative to photovoltaic (PV) power systems that are increasingly used in urban communities. Small-scale distributed wind turbines also produce electricity at lower wind speeds than large, utility-grade turbines, greatly expanding the availability of land with a harvestable wind resource. These factors, combined with increasingly high retail energy prices and demand for on-site power generation, have resulted in strong market pull for the distributed wind industry, which is poised for rapid market expansion. Seven market segments were identified for initial investigation. These market segments, documented in this report, include small-scale remote or off-grid power; residential or on-grid power; farm, business, and small industrial wind applications; and “small-scale” community wind. A summary of the market for remote wind-diesel applications is also included in this summary, although a full report was never completed. The remaining two market segments, water pumping for large-scale irrigation and water desalination, are currently being assessed as part of other program activities and are not included at this time. While some of these market applications have existed for some time, others are just beginning to emerge as part of distributed wind power. A short introduction to each of these assessments is provided below. x
Small-scale remote or off-grid power (residential or village): Supplying energy to rural, off-grid applications in the developed and developing world. This market 1
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
105
Goverment Series: Energy: Wind
x x
x
x
x
x
encompasses either individual homes or small community applications and is usually integrated with other components, such as storage and power converters and PV systems. Residential or on-grid power: Small wind turbines used in residential settings that are installed on the house side of the home electrical meter using net metering to supply energy directly to the home. Excess energy is sold back to the supplying utility. Farm, business, and small industrial wind applications: Supplying farms, businesses, and small industrial applications with low-cost electric power. The loads represented by this sector are larger than most residential applications, and payback must be equivalent to similar expenditures (4 to 7 years). In many cases, businesses are not eligible for net metering applications; thus the commercial loads must use most of the power from the turbine. “Small-scale” community wind: Using wind turbines to power large, grid-connected loads such as schools, public lighting, government buildings, and municipal services. Turbines can range in size from very small, several-kW turbines to small clusters of utility-scale multi-megawatt turbines. The key, defining factor is that these systems are owned by or for the community. Wind/diesel power systems: Providing power to rural communities currently supplied through diesel technology in an effort to reduce the amount of diesel fuel consumed. The rising cost of diesel fuel and increased environmental concerns regarding diesel fuel, transportation, and storage have made project economics more sensible. Irrigation water pumping: Using wind turbines to supply energy for agricultural applications. Current applications are powered by grid electricity, diesel, gasoline, propane, and particularly natural gas. Wind or hybrid systems allow farmers to offset use of high-priced fossil fuels. Water desalination: Using wind energy to directly or indirectly desalinate sea or brackish water using reverse osmosis, electrodialysis, or other desalination technologies. The economic and technical performance of wind-powered desalination depends on the configuration and placement of wind resource with regard to the impaired water and existing energy resources. Water desalination works well with the wind resource found in coastal or desert environments.
In these analyses, the DOE Wind and Hydropower Technology Program is assessing two new segments that have not historically been classified under the distributed wind banner: farm/ commercial and the “small-scale” community wind market. Both of these markets struggle to find commercial turbines to meet their needs, demonstrating opportunity for the development of U.S. turbines. These two emergent market segments combined with the existing small wind market result in three conglomerated turbine capacities. The first is the residential and smaller business sector at roughly 0 kilowatt (kW) to 100 kW capacity. The second sector is the farm/commercial market sector that includes farm, industrial, and wind/diesel from 100 kW to 500 kW. The last market sector for distributed wind is the “small-scale” community wind sector, which has been estimated to be 500 kW to 1 megawatt (MW). Although not covered specifically within this analysis, there is also likely a need to develop methodologies to lower the cost of power from large, multi-megawatt turbines that are installed in distributed community applications. Further hardware development in all of these sectors would help meet the desires of Americans to 2
106
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 9: Distributed Wind Market Applications
provide their own electricity, whether for a residence, farm, or business in rural America where zoning challenges are minimized. This study identifies and describes how the distributed wind industry can overcome longstanding barriers and play an important role (in the United States and the international arena) in supplying power near the point of end use or behind the meter. I. Summary of Market Potential Authors were asked to conservatively assess the potential market size for the five market segments in terms of the number of units expected to be installed in 5-year increments through 2020. Additionally, authors were asked to recommend the expected turbine size that would be most applicable to meet the proposed markets. Figure E.1 shows an overview of the different market segments, the kilowatt capacity of the turbines for each market segment, and the existing turbines available within each distributed market segment. Market Segments Small-Scale Remote Power
International
US
Residential Power Farm/Business/Ind Power
Irrigation, Industrial
Net Billing, on-site
Wind/Diesel Power “Small-Scale” ” Community Power 300W
DOE Size Categories
1 kW 5 kW
10 kW
20 kW
50 kW
65 kW
Distributed Wind Turbine
100kW 200kW
300kW 400kW 500kW 600kW
Commercial/Farm
700kW +
Small-Scale Community
US Commercial Products
Non-US Commercial Products* Refurbished Commercial Prototype
* - Currently sold in the US
4/27/06
Figure E.1. Overview of market segments and commercial wind turbines
From a manufacturing perspective, the strongest market segment is turbines smaller than 10 kW in size, with 20 domestic or internationally manufactured turbines to choose from. The number
3
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
107
Goverment Series: Energy: Wind
of turbine choices between 20 kW and 100 kW is quite limited, and turbines between 100 kW to 1 MW are practically nonexistent. It should be noted that the re-powering of wind farms in Europe and the United States has made available re-manufactured turbines that are being used to supply many current distributed applications. Although generally inexpensive compared to existing new turbine models, most of these are based on significantly outdated technology. Turbine design, reliability, and energy capture have been improved over the intervening time, resulting in current projects with reduced energy capture than would be expected from projects with turbines incorporating current technology and design practices. II. Summary of Domestic Markets for Distributed Wind Technologies Teams of technical experts with knowledge of their market segments provided the market projections summarized below. Each of these experts was asked to provide a conservative estimate to ensure the report validity in retrospect. It should be noted that NREL did not attempt to validate the expected market data from these market summary reports. The benefits from distributed wind projects are minimized when quantified using total megawatts of installed capacity, especially for the smaller distributed turbines. However, the use of a simple number of units produced reduces the visibility of the mid-size turbines used in the farm/commercial, wind/diesel, and “small-scale” community wind segments. For this reason, the summary results are presented in terms of both the number of units and total installed capacity. It should be noted that the estimates of the number of units and thus the total installed megawatts are very rough and should only be considered in relative terms. The DOE Wind and Hydropower Program is in the process of conducting more detailed market assessments for the segments that show the most promise. Table E.1 summarizes the cumulative number of expected domestic turbine sales over the five market segments. Note that the table also presents the turbine size for each market segment. Currently the largest sector in terms of the number of installed units is the small-scale remote or off-grid power market segment. The majority of these off-grid units have a lower capacity, with a typical turbine size in the range of a few kilowatts or less. All market segments combine to a potential total of 680,000 installed units by the end of 2020. There are several market niches within the domestic off-grid segment, specifically in Alaska and Native American communities. An example is the Navajo Nation—approximately one-third of the 250,000 people on the reservation lack electricity. The estimated market growth across 15 years to 2020 is 11% per year for the small-scale remote or off-grid market segment; 22% per year for the residential or on-grid segment; 48% across the farm, business, and small industrial segment; 26% per year for the wind/diesel segment; and 23% per year for the “small-scale” community segment.
4
108
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Goverment Series: Energy: Wind
Small wind turbine systems are typically procured by property owners. Manufacturers market their systems through distributors, dealers, and directly to customers. Local dealers or installers typically install grid-connected systems, although some customers install their own systems with inspections conducted by certified electricians. The wind resource, turbine size and model, micro-siting, and installation requirements such as tower height and foundation are site-specific. Many states, counties, and utilities are promoting distributed wind generation for its clean energy benefits and contribution to renewable portfolio standards, energy reliability, and energy independence. Widespread deployment of small wind turbines can increase the public’s familiarity with wind turbine visual impacts, attract mainstream media coverage, and pave the way for local community support for larger wind developments. Small turbines, in particular installations at schools and other high-visibility locations, can become an important asset in reducing fears about unfamiliar technology, which in turn can help reduce the expense and unpredictable nature of siting and permitting large wind developments. Small turbines can be installed in selected neighborhoods to increase public awareness of residential wind options and provide an additional benefit by educating students on how electricity is made and the benefits of wind power. Neighborhood DWT installations can also help utilities increase customer interest and participation in voluntary green power programs and provide local “advertisements” of utilities’ involvement in renewable energy. III. Current Status of Grid-Connected Residential Distributed Generation The Future Residential DWT installed capacity has historically comprised less than 5% of total sales of small wind turbines (up to 100 kW) [worldwide]. However, manufacturers expect that portion to grow to more than 20% by 2020 [2]. The U.S. Department of Energy Renewable Energy Plant Information System (REPiS) has documented nearly 1,200 small wind turbines (up to 100 kW) totaling 16 MW as of 2005 in 45 states. Approximately 70% of the DWT systems and 40% of the DWT capacity documented in the REPiS database are estimated to be grid-connected residential applications [3]. Based on a review of available market data, this study estimates that approximately 700 wind turbines totaling 3.5 MW were sold worldwide for residential grid-connected applications during 2005, with 500 of these totaling 2.5 MW sold in the United States. This study estimates that the cumulative grid-connected residential installed capacity was 2,900 units totaling 14.5 MW worldwide as of 2005, with 1,800 of these units totaling 9 MW installed in the United States. Market challenges. Because economics are a significant barrier to market adoption and growth of grid-connected DWT, it is important to examine factors contributing to turbine system costs. Key determining factors include turbine size (rotor diameter, rated capacity), average wind speed at hub height, power output control/limitation technology, and applied grid control technology. External factors include infrastructure and transport logistics costs, permitting costs and time, and other location-specific conditions. From the perspectives of power generation potential (kWh/kW), return on investment, and cost of energy (cents/kWh), current small turbine designs are at a disadvantage compared with much larger utility-scale wind turbines. Small turbines are relatively more expensive to manufacture
34
138
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 9: Distributed Wind Market Applications
(both materials and labor) and their limited hub heights (because of cost, setback requirements, aesthetics, etc.) result in comparatively less energy production. In addition, their low volume currently manufactured impede cost reductions with series-scale production [4]. The lack of performance standards, independent testing and consistent ratings for DWT contribute to product reliability concerns in the market. Complex interconnection standards and the reluctance of utilities to adopt net metering and DWT incentive programs further constrain the market and hinder market efficiencies. Dealers and installers increasingly report that the insurance industry is requiring additional insurance coverage for DWT owners. Finally, small wind turbines are not consistently addressed in state renewable portfolio standards (RPS), incentive policies, and consumer education campaigns. In the United Kingdom, the most commonly perceived barriers to residential distributed generation are permitting, expensive metering, lack of installation targets and incentives, high cost, and low consumer awareness. As in the United States, the United Kingdom experiences a high correlation between incentives and installations [5]. Utility acceptance. The market for grid-connected residential wind is primarily rural homeowners and small businesses. Many domestic residential sites appropriate for wind power are served by rural electric co-ops (RECs), which typically view net metering and distributed generation as cross-subsidies and inconsistent with co-op principles that members share equally in the investment, risk, and benefits of the co-operative [6]. The official position of the National Rural Electric Co-operative Association (NRECA) is that net metering results in reduced co-op revenue while the fixed costs remain the same and that the co-op’s other consumers ultimately subsidize the self-generating consumer [7]. While RECs do hold a large territory, many other utilities in more populated areas do not oppose net metering. However, most utilities still require significant education, softening of interconnection requirements, and generally an improved understanding of the benefits of capturing consumer investments in DWT. Potential new market segments. While the rural residential market has been the primary target for United States grid-connected small wind systems, new initiatives are exploring the urban and suburban markets. Among others, a U.S. manufacturer is aggressively pursuing small wind for the suburban residential market with new turbine technology and shorter towers. It can be anticipated that at least 1 year of market experience will be required to determine if this is a viable market segment for DWT and to identify the key technical and market barriers for this market segment, as well as the best practices for suburban residential market penetration. Several efforts are underway internationally to develop roof-top mounted [8] and buildingintegrated DWT designs [9], but so far none have proven commercially viable. It is premature to anticipate the feasibility of such designs, especially until extensive testing establishes that they pose no potential threat to the integrity of the structures on which they are mounted. The concepts are mentioned simply as examples of enabling technologies that may have the potential to significantly augment the distributed generation market in the future. IV. Market Barriers Issues and Assessment Expected United States Market Market targets. Historically, rural properties have been the primary market for residential-scale wind distributed generation systems. The industry is increasingly focused on the rural residential market, with new attention on the large-lot suburban residential market. As shown below in
35
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
139
Goverment Series: Energy: Wind
Figure 3-1, a 2004 survey of readers of Home Power Magazine (3,573 respondents) indicated that 38% intended to utilize renewable energy in a rural home, 27% in a suburban home, and 16% in an urban home, with more than 40% of respondents planning to install wind turbines [10].
Figure 3-1. Renewable energy system end-use information from Home Power readers’ survey
Market potential. The growth potential of the U.S. residential DWT market presents a unique, timely opportunity. Moreover, trends show that growth may occur at significantly increased rates if critical market barriers are overcome. A new market survey of the grid-connected residential wind market was conducted for this study in January 2006 1. This most recent survey found that the leading U.S. DWT manufacturers are projecting an average annual growth rate of 32% for the U.S. grid-connected market through 2020, with their potential domestic market share as high as 9,500 units totaling 26 MW in 2010, 21,000 units totaling 70 MW in 2015, and 41,000 units totaling 130 MW in 2020. These projections provide an aggressive outlook for the DWT market and signify that manufacturers are confident that the market is poised for strong growth. It is important to note that predictions about the percentage of future DWT market growth vary greatly and often depend heavily on the degree of expected state and federal support for DWT. The DWT market study conducted by the American Wind Energy Association (AWEA) in the spring of 2005 [11] found that in ideal market conditions (i.e., with sufficient policy support), annual U.S. sales of DWT could reach $55M by 2010. The same study forecasts a slow growth scenario based on scaled-back projections from only the established industry players, estimating annual U.S. sales at $27M in 2010 if the key barriers are not addressed. These estimates represent higher and lower bound average annual growth rates of 24% and 9%, respectively; however, some industry members believe that these projections are too conservative. With increased monitoring of these market trends, it is becoming increasingly evident that the DWT industry has the potential to become one of the leading renewable energy distributed system industries for residential homes in the United States.
1
See the Acknowledgements section for a list of survey participants.
36
140
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 9: Distributed Wind Market Applications
In 2002, AWEA set a bold industry goal of installing 50,000 MW of total DWT capacity (3% of domestic electricity demand) by 2020 based on census data for appropriately sized lots and acreages, and put the total potential domestic market at 15.1 million homes 2. The AWEA report estimated that more than 80% of the United States DWT market will be grid-connected residential systems with an average turbine size of 7.5 kW. Reaching 50,000 MW by 2020 would require average annual growth of around 60% over the next 15 years. Although this is an ambitious goal, given the recent annual market growth of 40% [12], it may be obtainable with adequate incentives, research and development (R&D) funding, and other policy support at state and federal levels. In consideration of these studies and familiarity with current industry trends, this study conservatively estimates that cumulative U.S. on-grid residential wind turbine installations in 2010 will have a lower bound of 5,100 units totaling 29 MW and an upper bound of 7,400 units totaling 44 MW, with average annual growth rates of 9% and 28%, respectively. An increase in the average turbine size for this sector from 5 kW in 2005 to 9 kW in 2020 is projected as a result of the availability of new products. As shown in the Summary Information Table (Table 35), assuming the same growth rates in the number of units, this study’s lower and upper bound United States estimates are 10,000-26,000 units totaling 72-211 MW in 2015 and 18,000-92,000 units totaling 170-1,000 MW in 2020, resulting in a midpoint forecast for the United States gridconnected residential market sector of 55,000 units totaling 590 MW in 2020. One of the conclusions of this study is that the residential wind industry would benefit from a new, detailed potential market analysis. An in-depth market study focused on consumer motivations would provide valuable information to inform research, product development, marketing, and policy decisions. Regions of interest. The criteria for states in the United States with strong residential DWT markets include high residential electricity rates and/or loads, adequate wind resources, financial incentives, clear and reasonable permitting requirements, positive public perception of small turbines, state or utility public education and awareness campaigns, and simplified interconnection processes. Taking into consideration relevant economic variables, a 2004 study by Lawrence Berkeley National Laboratory calculated simple payback for DWT break-even turnkey costs in the United States [13]. The top ten states for DWT simple payback at $2.50/W were reported to be California, New York, New Jersey, Rhode Island, Vermont, Hawaii, Montana, Maine, Alaska, and Illinois. 3 Since then, California and Illinois rebate funding levels have declined, and Massachusetts and Washington have introduced significant DWT incentive programs. Fifteen states have renewable energy funds with $3.5 billion in aggregate for renewable energy from 1998 to 2010: California, Connecticut, Delaware, Illinois, Maine, Massachusetts, Minnesota, Missouri, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, and Wisconsin [14]. However, so far only a few of these have established funding mechanisms for DWT.
2
The 2002 AWEA Roadmap estimated that by 2020 there will be 43.2 million homes with more than 0.50 acre of land and that 35% of these homes will have a sufficient wind resource to generate electricity from DWT. The model assumed a 10-kW system, 25-year system lifetime, 8% IRR on investment, operating and maintenance at 1.5¢/kWh, cash payment, and wind production valued at full average residential electricity rate.
3
37
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
141
Goverment Series: Energy: Wind
Responses to the survey conducted for this study confirm that the states of specific interest for the grid-connected residential market fall into three primary regions: x
West Coast (California and Washington State)
x
Northeast and Mid-Atlantic (New York, Massachusetts, Pennsylvania, Vermont)
x
Midwest/Central (Texas, Ohio, Minnesota, Iowa, Wisconsin, Colorado).
Correlations to residential PV. Considerable market information is available for the residential PV industry that could be useful to the DWT industry. Examples include trends in gridconnected PV installations and forecasts, 4 cost of energy, consumer demographics, purchase criteria, effectiveness of incentives and market drivers, and potential applications and market size for hybrid wind/PV systems. This insight can help inform marketing and technology decisions for the potentially large suburban residential market that some small wind turbine manufacturers are beginning to target.
Figure 3-2. Renewable energy end-user information from Home Power readers survey
4
The U.S. Department of Energy’s Energy Information Administration (EIA) forecasts residential grid-connected PV to be 127 MW of installed capacity in 2010, 141 MW in 2015, and 157 MW in 2020. The calculations are based on 2kW residential systems.
38
142
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 9: Distributed Wind Market Applications
It is also important to note that the PV industry has significant public support and resources to advance policy incentives, obtain research funding, and conduct public education and awareness campaigns. Coordination between the DWT and PV industries based on similar interconnection technologies and overlapping target markets could prove effective for developing recommendations beneficial to both industries. Customer motivations and resource information, such as that collected by Home Power Magazine in a 2003 reader’s survey (Figure 3-2) can provide important insights for marketing both PV and DWT. Expected International Market U.S. DWT manufacturers are in an excellent position to take advantage of the international DWT market. AWEA estimates that more than 40% of U.S.-manufactured DWT are exported [15]. Currently, two U.S. manufacturers, Bergey Windpower and Southwest Windpower, are both recognized as the world’s dominant market leaders in terms of sales volume [16]. A recent study conducted by Marbek for the Canadian Wind Energy Association indicated that 96% of reported sales in Canada are attributed to three U.S. manufacturers: Bergey Windpower, Southwest Windpower, and Aeromax [17]. The international export market, therefore, presents a considerable economic opportunity for U.S. manufacturers, both for grid-connected residential DWT as well as off-grid, remote applications. The 2006 market survey conducted for this study confirms a robust international export growth outlook. The leading U.S. DWT manufacturers are projecting an average annual growth rate of 34% for the non-U.S. grid-connected market through 2020, indicating a potential U.S. export market of 3,200 units totaling 11 MW in 2010, 10,000 units totaling 31 MW in 2015, and 22,000 units totaling 66 MW in 2020. Other estimates of the international DWT market come from AWEA’s 2005 DWT market study and a 2002 study by Garrad Hassan Consulting. The AWEA study estimates that the international small wind market is roughly the size of the total domestic market and that 40% of DWT manufactured in the United States are exported. A 2002 article in REFOCUS magazine by United Kingdom-based Garrad Hassan Consulting projects a five-fold increase from 2002 for global small wind sales. This estimate equates to 150 MW/year, or 150,000 turbines/year assuming $5/W total installed costs and an average turbine size of 1 kW [18]. A number of countries have shown considerable interest in DWT technologies. In 2005, Canada and the United Kingdom published studies about their potential markets for small wind. A 2005 United Kingdom study on “microgeneration” anticipates up to 5 GWh of energy from residential wind by 2030 (1.5-kW systems), with a doubling by 2050 and with small wind supplying 4% of United Kingdom’s electricity requirement [19]. The study, commissioned by the UK Department of Trade and Industry, estimates an upper bound of nearly 120 MW and a lower bound of 20 MW of installed DWT capacity by 2020, depending on the amount of government support. The Canadian study reports a total potential of 120,000 units for grid-connected residential, 3kW average capacity, and total capacity of 360,000 kW. The study references U.S. programs and market adoption rates and concludes that the Canadian DWT market requires incentives in four areas: market development (federal rebate and provincial incentives), policy development (net metering and streamlined environmental processes), technology development (standardized testing and demonstration programs), and education and awareness-raising (model
39
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
143
Goverment Series: Energy: Wind
interconnection agreements and installation guidelines for siting, zoning, permitting, and interconnection) [20]. Lawrence Berkeley National Lab reports that China manufactured 12,000 small wind turbines in 2000 and that the Chinese market has been strongly supported by government policies and incentives [21]. In February 2005, China passed a groundbreaking law to promote renewable energy. However, while China has a great potential for wind, as in much of the world, its primary market is off-grid rural electrification [22]. In consideration of these studies, the large DWT market share held by U.S. manufacturers, and familiarity with current industry trends, this study conservatively estimates lower and upper bound international annual growth rates of 11% and 28%, respectively. These rates are slightly higher than those estimated for the domestic residential DWT market as a result of the likelihood that new international residential markets will continue to emerge and expand. As with the U.S. market, the average international turbine size for this sector is expected to increase from 5 kW in 2005 to about 9 kW in 2020 as a result of the availability of new products. As shown in the Summary Information Table (Table 3-5), using these estimated growth rates for the number of units, cumulative international on-grid residential wind turbine installations in 2010 are estimated to have a lower bound of 2,500 units totaling 14 MW and an upper bound of 3,300 units totaling 19 MW. Lower and upper bound international grid-connected residential wind installation estimates are 4,800-11,000 units totaling 34-86 MW in 2015 and 8,700-37,000 units totaling 82-410 MW in 2020, resulting in an international mid-point forecast for this sector of 23,000 units totaling 250 MW in 2020. Regions of interest. Responses to the survey conducted for this study indicate that the major international markets for grid-connected residential wind fall in these three regions: x
Asia (Japan, China, India)
x
Europe (United Kingdom, Spain, Italy, Germany, Netherlands, Greece)
x
Central and South America.
Technology Adoption Time Frame There are some technologies on the horizon that could stymie the implementation of worldwide residential DWT. Fuel cells are often cited as a potential future example. However, commercially available fuel cells that do not rely on ever-tighter supplies of natural gas will not be available for several decades. By contrast, the recent United Kingdom “microgeneration” study forecasts mass-commercialization of DWT in 2015, with electricity prices the most important market change for small wind [23]. A much more immediately available technology, and one that “competes” with small wind in various applications today, is PV. Given the current public benefits programs, PV is more competitive than wind in the 1- to 3-kW category. In addition, currently PV systems can be ordered, permitted, and installed in a fraction of the time that is required to install a comparably sized residential wind turbine. However, in areas that do not have incentives for PV, residential wind is cost-competitive and easily installed for those facing reasonable zoning, permitting, and interconnection requirements. While PV is often viewed as a competitor, market growth can be anticipated in hybrid wind/PV systems.
40
144
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 9: Distributed Wind Market Applications
That said, there are still pressing hurdles that the DWT industry needs to overcome to reduce consumer hesitation with the technology, specifically in regard to reliability and timeframe for installation. In addition, the limited availability of cost-effective, state-of-the-art, synchronous inverters is a constraint to 3-kW (and larger) grid-connected variable-speed turbine types. While the manufacturers of these inverters also manufacture products for the grid-tied PV market, the inverter itself controls DWT generators differently than PV systems. When a small wind turbine manufacturer develops a new turbine model, inverter manufacturers may find it risky to invest in a new product line without the prospect of selling substantial numbers. Inverters and system electronics continue to be the least reliable component of small wind technology, which in turn has stalled innovation [24]. Some companies, such as SMA of Germany and Magnetek of the United States, have designed inverters for a number of residential wind turbines. Development of new small wind turbines that do not require an inverter for grid-intertie applications is another direction being pursued by a few designers. This would bypass the abovementioned dilemma. However, current development on these concepts has been greatly slowed by lack of R&D funding. Multiple paths for inverterless small wind turbines should be employed to seek the best solution to connecting DWT to the grid in a timely manner, including directdrive induction generators and gear-driven systems. Another significant time-sensitive barrier to current small wind turbine designers is the lack of effective computer modeling covering all components of a small wind turbine, in a variety of wind conditions including furling wind speeds. Quickly addressing this need could expedite crucial design improvements to help meet required cost targets during this critical window of opportunity to maintain U.S. dominance in this sector. Towers are one of the greatest challenges for DWT. Towers for large wind turbines are generally less than 20% of the hardware cost. For small wind turbines, towers often comprise 40%-80% of the hardware cost. A concerted effort to develop more cost-effective designs with composites or other materials should be explored. Non-Technical Barriers for Technology Adoption The January 2006 survey (Table 3-1) conducted for this study indicates that economics, lack of incentives, zoning, public perception challenges, and interconnection issues are the most significant barriers to residential DWT market adoption. Up-front costs also are rated as the key decision-making factor in a recent Canadian DWT market study [25]. Economics Most consumers carefully weigh the economics of DWT systems, taking into consideration total installed costs, out-of-pocket costs, perception of value and return on investment. Factors contributing to DWT system costs are listed above in the market challenges section. Reductions in total residential DWT installed costs from the current range of $4-7/W to $2-3/W after incentives will be necessary for significant market expansion in the U.S. grid-connected market [26]. This estimate is based on an analysis of PV module shipments vs. price (Figure 3-3) and an assumption that since PV and small wind are competitors in the grid-connected market, small wind must be priced competitively with PV. Lengthy and costly permitting processes, requirements to access state incentive funds (environmental analyses, site assessments, installation inspections, lengthy applications), and other site-related processes also drive up total installed costs because dealers and installers
41
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
145
Goverment Series: Energy: Wind
typically assist consumers with these steps. Inconsistent “rated output” turbine model designations may be an additional factor in reducing consumer confidence and perceived value.
42
146
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 9: Distributed Wind Market Applications
Chapter 4. Farm, Industry, and Small Business Prepared by: Ken L. Starcher and Vaughn C. Nelson, West Texas A&M University, Alternative Energy Institute Robert E. Foster and Luis Estrada, New Mexico State University, Southwest Technology Development Institute I. Executive Summary Wind energy has proven to be one of the most economical, modular, and readily connected renewable technologies. Its use in agricultural, production plants, and small business/home applications will continue to grow for the next 20 years and beyond. This report is a summary of the expected growth areas, the growth rates, the necessary turbine style/sizes, and the barriers to sustainable market growth for the farm, industry, and small business wind market sector. The prime barrier is cost. Too few turbines are currently produced to obtain the economies of scale through volume production. Thus, favorable life-cycle costs will not be realized to sell these mid-size turbines alone. The economic payback has to be on the order of 4 to 7 years to be attractive compared to other similarly sized investments for agribusiness. The cost of energy (COE) is in direct competition to that of utility-provided energy at $10–$15/MWh. The second barrier is lack of installed infrastructure for the ongoing sales and maintenance of a distributed array of many types of turbines. Enough income must exist within 150 miles of a central service site to support $1 million/year in sales (20-25 turbines/year of 50-kW units). An installed base of 300 turbines is needed for an area to support a maintenance facility fulltime. However, a model of similar scale exists for the large farm implement market, covering the same size area, expected sales per year, and installed repair/re-supply base. The lack of enough matching turbines to the loads is the third most important barrier to the implementation of wind for the farm and small-business market. A 10-kW unit will meet all small loads. These units are available and easily connected through net billing laws in most states already allowing this size unit. Likewise, 50-kW turbines are in production and can help meet the farm-ranch-small irrigation market. Unfortunately, 100- to 250-kW units for center-pivot irrigation and agri-processing industry are very limited. And the 250- to 500-kW units for large industrial loads are no longer made in any significant quantities. One way to improve the potential sales is not to focus on turbine sales alone, but to develop the market in combination with demand-side energy management and full service of the turbines after installation. This would reduce owners’ worries regarding long-term O&M and also ensure that energy produced was used at the best value to the turbine owner (displacing energy that would have been purchased at retail rates from the utility).
61
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
167
Chapter 10: U.S. Energy: Overview and Key Statistics
U.S. Energy: Overview and Key Statistics Carl E. Behrens Specialist in Energy Policy Carol Glover Information Research Specialist October 28, 2009
Congressional Research Service 7-5700 www.crs.gov R40187
CRS Report for Congress Prepared for Members and Committees of Congress
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
205
Goverment Series: Energy: Wind
U.S. Energy: Overview and Key Statistics
Summary Energy supplies and prices are major economic factors in the United States, and energy markets are volatile and unpredictable. Thus, energy policy has been a recurring issue for Congress since the first major crisis in the 1970s. As an aid in policy making, this report presents a current and historical view of the supply and consumption of various forms of energy. The historical trends show petroleum as the major source of energy, rising from about 38% in 1950 to 45% in 1975, then declining to about 40% in response to the energy crisis of the 1970s. Significantly, the transportation sector has been and continues to be almost completely dependent on petroleum, mostly gasoline. The importance of this dependence on the volatile world oil market was revealed over the past five years as perceptions of impending inability of the industry to meet increasing world demand led to relentless increases in the prices of oil and gasoline. With the downturn in the world economy and a consequent decline in consumption, prices collapsed, but the dependence on imported oil continues as a potential problem. Natural gas followed a similar pattern at a lower level, increasing its share of total energy from about 17% in 1950 to more than 30% in 1970, then declining to about 20%. Consumption of coal in 1950 was 35% of the total, almost equal to oil, but it declined to about 20% a decade later and has remained at about that proportion since then. Coal currently is used almost exclusively for electric power generation. Nuclear power started coming online in significant amounts in the late 1960s. By 1975, in the midst of the oil crisis, it was supplying 9% of total electricity generation. However, increases in capital costs, construction delays, and public opposition to nuclear power following the Three Mile Island accident in 1979 curtailed expansion of the technology, and many construction projects were cancelled. Continuation of some construction increased the nuclear share of generation to 20% in 1990, where it remains currently. The first new reactor license applications in nearly 30 years were recently submitted, but no new plants are currently under construction or on order. Construction of major hydroelectric projects has also essentially ceased, and hydropower’s share of electricity generation has gradually declined, from 30% in 1950 to 15% in 1975 and less than 10% in 2000. However, hydropower remains highly important on a regional basis. Renewable energy sources (except hydropower) continue to offer more potential than actual energy production, although fuel ethanol has become a significant factor in transportation fuel, and wind power has recently grown rapidly. Conservation and energy efficiency have shown significant gains over the past three decades and offer encouraging potential to relieve some of the dependence on imports that has caused economic difficulties in the past, as well as the present. After an introductory overview of aggregate energy consumption, this report presents detailed analysis of trends and statistics regarding specific energy sources: oil, electricity, natural gas, coal and renewable energy. A section on trends in energy efficiency is also presented.
Congressional Research Service
206
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 10: U.S. Energy: Overview and Key Statistics
U.S. Energy: Overview and Key Statistics
Contents Introduction ................................................................................................................................1 Oil ..............................................................................................................................................6 Petroleum Consumption, Supply, and Imports.......................................................................7 Petroleum and Transportation.............................................................................................. 10 Petroleum Prices: Historical Trends..................................................................................... 12 Petroleum Prices: The 2004-2008 Bubble............................................................................ 15 Gasoline Taxes ................................................................................................................... 18 Electricity ................................................................................................................................. 18 Other Conventional Energy Resources ...................................................................................... 22 Natural Gas......................................................................................................................... 22 Coal.......................................................................................................................................... 26 Renewables............................................................................................................................... 27 Conservation and Energy Efficiency ......................................................................................... 29 Vehicle Fuel Economy ........................................................................................................ 29 Energy Consumption and GDP ........................................................................................... 30 Major Statistical Resources ....................................................................................................... 32 Energy Information Administration (EIA) ........................................................................... 32 Other Sources ..................................................................................................................... 33
Figures Figure 1. Per Capita Energy Consumption in Transportation and Residential Sectors, 1949-2008................................................................................................................................3 Figure 2. Electricity Intensity: Commercial, Residential, and Industrial Sectors, 19492008 ........................................................................................................................................4 Figure 3. U.S. Energy Consumption, 1950-2005 and 2008...........................................................6 Figure 4. World Crude Oil Reserves, 1973, 1991, and 2008.........................................................7 Figure 5. U.S. Consumption of Imported Petroleum, 1960-2008 and Year-to-Date Average for 2009 ................................................................................................................... 10 Figure 6. Transportation Use of Petroleum, 1950-2008.............................................................. 12 Figure 7. Nominal and Real Cost of Crude Oil to Refiners, 1968-2008 ...................................... 13 Figure 8. Nominal and Real Price of Gasoline, 1950-2008 and August 2009.............................. 14 Figure 9. Consumer Spending on Oil as a Percentage of GDP, 1970-2006................................. 15 Figure 10. Crude Oil Futures Prices, January 2000 to September 2009 ...................................... 16 Figure 11. Average Daily Nationwide Price of Unleaded Gasoline, January 2002-October 2009 ...................................................................................................................................... 17 Figure 12. U.S. Gasoline Consumption, January 2000-September 2009 ..................................... 18 Figure 13. Electricity Generation by Source, Selected Years, 1950-2007 ................................... 19 Figure 14. Changes in Generating Capacity, 1995-2007 ............................................................ 20 Congressional Research Service
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
207
Goverment Series: Energy: Wind
U.S. Energy: Overview and Key Statistics
Figure 15. Price of Retail Residential Electricity, 1960-2007 ..................................................... 22 Figure 16. Natural Gas Prices to Electricity Generators, 1978-2007........................................... 24 Figure 17. Monthly and Annual Residential Natural Gas Prices, 2000-June 2009....................... 25 Figure 18. Annual Residential Natural Gas Prices, 1973-2008 ................................................... 26 Figure 19. U.S. Ethanol Production, 1990-2008......................................................................... 28 Figure 20. Wind Electricity Net Generation, 1989-2008 ............................................................ 29 Figure 21. Motor Vehicle Efficiency Rates, 1973-2007 ............................................................. 30 Figure 22. Oil and Natural Gas Consumption per Dollar of GDP, 1973-2008............................. 31 Figure 23. Change in Oil and Natural Gas Consumption and Growth in GDP, 1973-2008.......... 32
Tables Table 1. U.S. Energy Consumption, 1950-2008...........................................................................2 Table 2. Energy Consumption in British Thermal Units (BTU) and as a Percentage of Total, 1950-2008......................................................................................................................5 Table 3. Petroleum Consumption by Sector, 1950-2008 ..............................................................8 Table 4. U.S. Petroleum Production, 1950-2008 ..........................................................................9 Table 5. Transportation Use of Petroleum, 1950-2008 ............................................................... 11 Table 6. Electricity Generation by Region and Fuel, 2008 ......................................................... 21 Table 7. Natural Gas Consumption by Sector, 1950-2008.......................................................... 23 Table 8. Coal Consumption by Sector, 1950-2008..................................................................... 27
Contacts Author Contact Information ...................................................................................................... 34 Key Policy Staff........................................................................................................................ 34
Congressional Research Service
208
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 10: U.S. Energy: Overview and Key Statistics
U.S. Energy: Overview and Key Statistics
Introduction Tracking changes in energy activity is complicated by variations in different energy markets. These markets, for the most part, operate independently, although events in one may influence trends in another. For instance, oil price movement can affect the price of natural gas, which then plays a significant role in the price of electricity. Since aggregate indicators of total energy production and consumption do not adequately reflect these complexities, this compendium focuses on the details of individual energy sectors. Primary among these are oil, particularly gasoline for transportation, and electricity generation and consumption. Natural gas is also an important energy source, for home heating as well as in industry and electricity generation. Coal is used almost entirely for electricity generation, nuclear and hydropower completely so.1 Renewable sources (except hydropower) continue to offer more potential than actual energy production, although fuel ethanol has become a significant factor in transportation fuel, and wind power has recently grown rapidly. Conservation and energy efficiency have shown significant gains over the past three decades, and offer encouraging potential to relieve some of the dependence on imports that has caused economic difficulties in the past as well as the present. To give a general view of energy consumption trends, Table 1 shows consumption by economic sector—residential, commercial, transportation, and industry—from 1950 to the present. To supplement this overview, some of the trends are highlighted by graphs in Figure 1 and Figure 2. In viewing these figures, a note on units of energy may be helpful. Each source has its own unit of energy. Oil consumption, for instance, is measured in million barrels per day (mbd),2 coal in million tons per year, natural gas in trillion cubic feet (tcf) per year. To aggregate various types of energy in a single table, a common measure, British Thermal Unit (Btu), is often used. In Table 1, energy consumption by sector is given in units of quadrillion Btus per year, or “quads,” while per capita consumption is given in million Btus (MMBtu) per year. One quad corresponds to one tcf of natural gas, or approximately 50 million tons of coal. One million barrels per day of oil is approximately 2 quads per year. One million Btus is equivalent to approximately 293 kilowatthours (Kwh) of electricity. Electric power generating capacity is expressed in terms of kilowatts (Kw), megawatts (Mw, equals 1,000 Kw) or gigawatts (Gw, equals 1,000 Mw). Gas-fired plants are typically about 250 Mw, coal-fired plants usually more than 500 Mw, and large nuclear powerplants are typically about 1.2 Gw in capacity. Table 1 shows that total U.S. energy consumption almost tripled since 1950, with the industrial sector, the heaviest energy user, growing at the slowest rate. The growth in energy consumption per capita (i.e., per person) over the same period was about 50%. As Figure 1 illustrates, much of the growth in per capita energy consumption took place before 1970.
1
This report focuses on current and historical consumption and production of energy. For a description of the resource base from which energy is supplied, see CRS Report R40872, U.S. Fossil Fuel Resources: Terminology, Reporting, and Summary, by Gene Whitney, Carl E. Behrens, and Carol Glover. 2 Further complications can result from the fact that not all sources use the same abbreviations for the various units. The Energy Information Administration (EIA), for example, abbreviates “million barrels per day” as “MMbbl/d” rather than “mbd.” For a list of EIA’s abbreviation forms for energy terms, see http://www.eia.doe.gov/neic/a-z/a-z_abbrev/az_abbrev.html.
Congressional Research Service
1
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
209
Goverment Series: Energy: Wind
U.S. Energy: Overview and Key Statistics
Table 1 does not list the consumption of energy by the electricity sector separately because it is both a producer and a consumer of energy. For the residential, commercial, industrial, and transportation sectors, the consumption figures given are the sum of the resources (such as oil and gas) that are directly consumed plus the total energy used to produce the electricity each sector consumed—that is, both the energy value of the kilowatt-hours consumed and the energy lost in generating that electricity. As Figure 2 demonstrates, a major trend during the period was the electrification of the residential and commercial sectors and, to a lesser extent, industry. By 2007, electricity (including the energy lost in generating it) represented about 70% of residential energy consumption, about 80% of commercial energy consumption, and about a third of industrial energy consumption.3 Table 1. U.S. Energy Consumption, 1950-2008 Energy Consumption by Sector (Quadrillion Btu)
Population (millions)
Consumption Per Capita (Million Btu) Total
Resid.
Trans.
152.3
227.3
39.4
55.8
40.2
165.9
242.3
44.0
57.6
45.1
80.7
249.6
50.2
58.7
54.0
94.3
278.0
55.0
64.0
67.8
205.1
330.9
67.3
78.5
18.2
72.0
216.0
333.4
68.7
84.5
19.7
78.1
227.2
343.8
69.5
86.7
28.9
20.1
76.5
237.9
321.5
67.6
84.4
13.3
31.9
22.4
84.7
249.6
339.1
68.2
89.8
14.7
34.0
23.8
91.2
266.3
342.4
69.8
89.6
17.2
34.8
26.6
99.0
282.2
350.7
72.6
94.1
17.9
32.5
28.4
100.5
295.6
340.0
73.4
96.0
17.7
32.5
28.8
99.9
298.4
334.7
69.6
96.7
18.3
32.5
29.1
101.6
301.3
337.1
71.8
96.7
31.2
27.9
99.3
304.1
326.6
71.2
91.8
Resid.
Comm.
Indust.
Trans.
Total
1950
6.0
3.9
16.2
8.5
34.6
1955
7.3
3.9
19.5
9.6
1960
9.1
4.6
20.8
10.6
1965
10.7
5.8
25.1
12.4
1970
13.8
8.3
29.6
16.1
1975
14.8
9.5
29.4
1980
15.8
10.6
32.1
1985
16.1
11.4
1990
17.0
1995
18.6
2000
20.5
2005
21.7
2006
20.8
2007
21.6
2008P
21.6
18.5
Source: Energy Information Administration (EIA), Annual Energy Review 2008, Tables 2.1a and D1. Per capita data calculated by CRS. Notes: Data for 2008 are preliminary.
3
In calculating these percentages, “electric energy consumption” includes both the energy value of the kilowatt-hours consumed and the energy lost in generating that electricity.
Congressional Research Service
210
2
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 10: U.S. Energy: Overview and Key Statistics
U.S. Energy: Overview and Key Statistics
Figure 1. Per Capita Energy Consumption in Transportation and Residential Sectors, 1949-2008 120
Million BTU Consumed per Capita
100
80 Transportation 60
Residential
40
20 2008P
0 1949
1954
1959
1964
1969
1974
1979
1984
1989
1994
1999
2004
Source: Energy Information Administration (EIA), Annual Energy Review 2008, Tables 2.1a and D1. Per capita data calculated by CRS. Notes: Data for 2008 are preliminary.
Congressional Research Service
3
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
211
Chapter 11: Testimony of Dr. Howard Gruenspecht, Energy Information Administration
Testimony of Dr. Howard Gruenspecht Acting Administrator Energy Information Administration U.S. Department of Energy
before the Subcommittee on Energy and Environment Committee on Energy and Commerce U.S. House of Representatives
February 26, 2009
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
243
Goverment Series: Energy: Wind
Mr. Chairman, and members of the Committee, I appreciate the opportunity to appear before you today. My testimony reviews the role of renewable electricity generation in the Energy Information Administration’s (EIA) Annual Energy Outlook 2009 (AEO2009) projections, provides a brief overview of the renewable resource base, and discusses key findings from earlier EIA analyses of proposals for a Federal renewable portfolio standard.
EIA is the independent statistical and analytical agency within the Department of Energy. We are charged with providing objective, timely, and relevant data, analyses, and projections for the use of the Congress, the Administration, and the public. Although we do not take positions on policy issues, we do produce data and analyses to help inform energy policy deliberations. Because we have an element of statutory independence with respect to this work, our views are strictly those of EIA and should not be construed as representing those of the Department of Energy or the Administration.
Renewable Electricity Generation in the AEO2009 Early Release Reference Case
The projections in EIA’s AEO2009, which extend through 2030, are intended to represent an energy future based on given technological and demographic trends, current laws and regulations, and consumer and supply behavior as derived from known data. EIA recognizes that projections of energy markets are highly uncertain and are subject to political disruptions, technological breakthroughs, and other unforeseeable events. In addition, long-term trends in technology development, demographics, economic growth, and energy resources may evolve along a different path than expected in the projections. The complete AEO2009, which EIA will
2
244
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 11: Testimony of Dr. Howard Gruenspecht, Energy Information Administration
release in the coming weeks, includes a large number of alternative cases intended to examine these uncertainties.
Projections for electricity sales and generation in the AEO2009 reference case reflect both market and policy drivers. Projected electricity sales are sensitive to changes in projected electricity prices, which reflect fuel prices, economic growth, and policies that promote energy efficiency, including recently enacted lighting and appliance standards. The projected generation mix reflects fuel prices, the impact of concerns regarding greenhouse gas (GHG) emissions on investment behavior, and the projected growth in sales. Several policy factors play an important role, notably the renewable portfolio standards (RPS) enacted in 27 states and the District of Columbia. AEO2009 also reflects Federal policies that promote renewable generation sources, including the production tax credit (PTC) for wind through the end of 2009 and for other eligible resources through 2010, as well as investment tax credits for solar photovoltaics (PV) through 2016, reflecting provisions of the Energy Improvement and Extension Act of 2008. The AEO2009 reference case does not, however, include the further 3-year extension of the PTC and other provisions to promote renewable energy and energy efficiency that were enacted earlier this month as part of the American Recovery and Reinvestment Act of 2009. EIA is currently analyzing the impact of these provisions, which are expected to raise the projected amount of renewables.
Spurred by State renewable incentive programs, tax incentives for renewables, and projected prices for natural gas and other fuels, the AEO2009 reference case projects that renewable energy sources will play a growing role in electricity generation (Figures 1 and 2). In absolute terms, the largest growth in nonhydroelectric renewable generation is projected to come from biomass 3
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
245
Goverment Series: Energy: Wind
and wind power. Between 2007 and 2030, generation from biomass power—both co-firing in existing coal plants and the addition of new plants—increases by more than 500 percent, while generation from wind power increases by more than 300 percent. While solar power is expected to remain a relatively small part of the overall renewable generation mix, it is projected to increase by more than 1600 percent between 2007 and 2030. The growth in solar power is spurred by the State renewable programs and the investment tax credit provisions in the Energy Improvement and Extension Act of 2008 that extended the credit through 2016 and removed the cap on the size of the credit.
Overall, the projected growth in nonhydropower renewable generation in the AEO2009 reference case constitutes 52 percent of overall projected growth in electricity sales through 2020 and 38 percent of growth in electricity sales through 2030.
Another perspective on projected renewable generation in the AEO2009 focuses on its share of electricity sales. Share calculations relevant to consideration of any particular RPS proposal must be constructed to reflect its design features. RPS credits available to renewable generators depend on which renewables count and whether there are double or triple credits for some specified renewables, such as distributed PV and wind, or for renewables in specified locations, such as Indian lands, which affect the numerator in the RPS share calculation. Some proposals that EIA has analyzed also allow credits for efficiency programs to count towards meeting the RPS target up to a specified percentage, at the option of State governments. Exclusions from the RPS, another key design feature, affect the denominator of the RPS share calculation. Several past RPS proposals have exempted utilities below a specified sales cutoff value, existing
4
246
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 11: Testimony of Dr. Howard Gruenspecht, Energy Information Administration
hydropower and municipal solid waste (MSW) generation, and sales from cooperatives and/or municipal utilities from RPS coverage.
Some sample calculations based on the AEO2009 illustrate how design features affect RPS share calculations. For example, if existing hydropower and MSW are not eligible for RPS credits, as in many RPS proposals that EIA has analyzed in the recent past, and no electricity sellers are exempted from the RPS, RPS eligible generation projected in the AEO2009 reference case provides 7 percent of total electricity sales in 2020 and 9 percent of total electricity sales in 2030. The same calculation done in a manner that provides triple RPS credits for distributed wind and solar and provides an exemption from RPS coverage for the same categories of electricity sellers exempted from coverage by the RPS proposal in H.R. 890 shows RPS credits from the same AEO2009 generation profile equal to 9.6 percent of covered sales in 2020 and 11.6 percent of covered sales in 2030. These sample calculations do not represent the full range of possibilities, since they do not consider the possibility of credits for efficiency or double credits for renewables in certain locations.
The AEO2009 RPS share, calculated in accordance with the crediting and coverage rules in any specific RPS program design and adjusted for the projected impact of the American Recovery and Reinvestment Act on the energy sector, characterizes the projected starting point for compliance. Some combination of additional generation from RPS-eligible sources, credits for efficiency (if allowed under the RPS program), or RPS credits purchased from the government if a safety valve provision is included in the program and comes into play, would then be required to close the gap between this starting point and the RPS targets.
5
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
247
Goverment Series: Energy: Wind
Renewable Resources
The National Energy Modeling System (NEMS), used to produce the AEO2009, represents the major renewable energy resources with significant mid-term potential to contribute to U.S. electricity markets. These include resources for onshore and offshore wind, biomass, solar, geothermal, landfill gas, and hydroelectricity. EIA represents the total quantity of technically recoverable resources and, where applicable, the increasing cost of exploiting resources that are less accessible or of lower quality.
The wind resources included in NEMS are derived from work done at the National Renewable Energy Laboratory (NREL) to characterize the location, extent, and accessibility of the U.S. wind resource base, as shown in Figure 3. Land-based wind resources vary significantly in development cost and economic performance, based on average wind speed, distance from transmission lines and from demand centers, and even the roughness of terrain and access to construction infrastructure and other factors. In addition, some resources may be in aesthetically or environmentally sensitive areas with high mitigation or opportunity costs for development. EIA estimates that wind resources in excess of 15.7 miles per hour annual average wind speed at 50 meters altitude could, in theory, accommodate 3,700 gigawatts of wind capacity, compared to a current installed capacity base of approximately 25 gigawatts. The estimated cost to develop these resources ranges from about $2,000 per kilowatt to more than $6,000 per kilowatt, with about 250 gigawatts estimated to be available at a cost of less than $2,400 per kilowatt. However, much of this resource is concentrated in areas away from the bulk of the U.S. population. In some regions, the available resource is in excess of local demand or grid capacities to absorb the intermittent output of wind generators, while in others the available 6
248
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 11: Testimony of Dr. Howard Gruenspecht, Energy Information Administration
resource can serve only a small fraction of load. NEMS allows for the construction of some interregional transmission, but this projected transmission construction adds additional cost to the wind development and may not entirely alleviate the problem.
Offshore wind resources are potentially more productive than onshore resources and are generally located closer to major population centers. While there is significant uncertainty over the cost of exploiting this resource, EIA estimates that it is significantly higher than the cost of onshore development, based on the limited data available from Europe. Like onshore resources, the cost of the offshore resources increases with increasing utilization of the resource, in part influenced by the same factors that increase the cost of onshore resources, such as distance to load centers, environmental or aesthetic concerns, variable terrain/seabed, and also by water depth.
Biomass can be converted to electricity in either dedicated plants or co-fired as a small fuel fraction in existing plants. Some types of biomass may also be suitable for producing liquid fuels such as ethanol. NEMS represents four distinct types of biomass material available to the electric power sector: forestry residues, urban wood waste and mill residues, agricultural residues, and energy crops. As with most renewable resources, availability varies significantly by region. Based largely on recent work from the University of Tennessee, costs are estimated to rise with increasing supply, as shown in Figure 4. This reflects the value of some feedstocks to alternative uses, increasing collection and separation costs, and the value of energy crop lands for other uses such as food and feed production. Energy crops are not yet commercially established in the United States, and EIA assumes that their development will take some time. As a result, the supply of agricultural residues and energy crops varies over time in the AEO2009 7
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
249
Chapter 11: Testimony of Dr. Howard Gruenspecht, Energy Information Administration
Figure 1. Electricity Generation mix gradually
shifts to lower carbon options
billion kilowatthours
History
6,000
Projections
Oil & Other
5,000
Renewable
4,000
Nuclear 3,000
Natural Gas 2,000
Coal
1,000
0 1990
2000
2010
2020
2030
Figure 2. Nonhydropower renewable power meets 38% of total generation growth between 2007 and 2030 billion kilowatthours
500
History
Projections
450 400
Solar
350 300
Geothermal Waste
250 200
Wind
150 100 50 0 1990
Biomass
2000
2010
2020
2030
Source: Energy Information Administration, National Energy Modeling System run AEO2009.D112408B.
17
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
259
Goverment Series: Energy: Wind
Figure 3. Onshore and Offshore Wind Resources
Figure 4 – Cumulative Supply of Biomass Feedstock in 2020
Price (2007 dollars per million Btu
12 Urban Wood Waste 10 Agricultural Residues 8 Forestry Residues
Energy Crops
6
4
2
0 0
2000
4000
6000
8000
10000
12000
Trillion Btu Source: Energy Information Administration, National Energy Modeling System
18
260
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 12: Testimony of Ralph Izzo, Public Service Enterprise Group Incorporated
TESTIMONY OF RALPH IZZO PRESIDENT, CHAIRMAN AND CEO PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED HOUSE COMMITTEE ON ENERGY AND COMMERCE SUBCOMMITTEE ON ENERGY AND ENVIRONMENT FEBRUARY 26, 2009
Mr. Chairman, Congressman Upton and Members of the Subcommittee, my name is Ralph Izzo and I am President, Chairman and CEO of Public Service Enterprise Group. Our family of companies distributes electricity and natural gas to more than two million utility customers in New Jersey, and owns and operates approximately 17,000 megawatts of electric generating capacity concentrated in the Northeast, Mid-Atlantic and Texas.
I appear before you this morning to express my strong desire to see this Congress adopt a national Renewable Electricity Standard. I applaud Chairman Markey for his leadership on this issue, as well as New Jersey Congressman Frank Pallone, who has championed renewable energy for as long as I’ve known him.
I support a national RES as a citizen who is deeply concerned about climate change; as an investor who sees exciting opportunities in the renewable sector; and as the head of a company concerned about its customers and their ability to pay for green investments, particularly in this economic environment.
1
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
261
Goverment Series: Energy: Wind
The reports of how our climate is already changing are increasingly alarming. Temperatures are rising, and the Arctic ice sheet and glaciers around the world are melting even faster than anticipated.
Global warming is the most important environmental challenge of our time. To avoid catastrophic impacts from climate change, most scientists agree that we must achieve carbon emission reductions of 80% by 2050. To reach this target, we urgently need decisive federal action – not a patchwork of state and regional fixes, but a strong, progressive national energy policy.
PSEG has advocated a three-pronged approach to reduce carbon emissions. x
Conservation through energy efficiency improvements.
x
Development of renewable energy resources.
x
And an expansion of clean, zero- and low-carbon central station electric generation, such as nuclear power.
Putting a price on carbon with a cap-and-trade program will help make progress toward all of these goals. However, effectively combating global warming will require a comprehensive package of policy solutions.
Meeting our carbon reduction targets will require that we electrify our transportation sector and decarbonize our electric generation. This cannot be achieved if we only focus on short-term, least-cost carbon reduction measures. We need policies aimed directly at
2
262
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
Chapter 12: Testimony of Ralph Izzo, Public Service Enterprise Group Incorporated
driving these transformations, and a federal RES will create demand for technologies that will transform the way we generate electricity.
With America’s skilled workforce and entrepreneurial spirit, we should be leading this charge. But today we are playing catch up with other nations in developing renewable energy industries.
With the right national policy, America can develop the world’s leading clean energy industry. We will create jobs. And we will develop new technologies that we can export all over the world. Investment in renewable energy is a strategy for long-term growth.
As an investor and businessman, I believe the adoption of a federal RES would create tremendous opportunities. PSEG is already beginning to invest heavily in alternative energy. Two weeks ago, our utility filed a proposal with New Jersey regulators to invest almost $800 million in solar generation over the next five years. Under this program, we will install solar generation on brownfields, low-income housing and government buildings. It also will include roughly 200,000 solar installations on our utility poles. This is in addition to the more than $100 million our utility is already investing in solar generation.
Our merchant renewable generating company is also developing solar, offshore wind and other alternative energy projects. Most notable among these is a joint venture with Deepwater Wind to build a 350 megawatt wind generation facility roughly 17 miles off
3
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
263
Chapter 13: Written Testimony of Edward C. Lowe, GE Energy Infrastructure
+RXVH&RPPLWWHHRQ(QHUJ\DQG&RPPHUFH 6XEFRPPLWWHHRQ(QHUJ\DQG(QYLURQPHQW +HDULQJRQ ±5HQHZDEOH(QHUJ\ &RPSOHPHQWDU\3ROLFLHVIRU&OLPDWH/HJLVODWLRQ² )HEUXDU\ :ULWWHQ7HVWLPRQ\RI (GZDUG&/RZH *HQHUDO0DQDJHU0DUNHW'HYHORSPHQW 5HQHZDEOHV *((QHUJ\,QIUDVWUXFWXUH
0U &KDLUPDQ DQG PHPEHUV RI WKH &RPPLWWHH , DP (GZDUG /RZH *HQHUDO 0DQDJHU IRU 5HQHZDEOHV 0DUNHW 'HYHORSPHQW DW *( (QHUJ\ ,QIUDVWUXFWXUH,DSSUHFLDWHWKH RSSRUWXQLW\WRWHVWLI\ RQWKHSRWHQWLDO LPSDFWVRID)HGHUDO5HQHZDEOH(OHFWULFLW\6WDQGDUG 5(6 SDUWLFXODUO\ UHJDUGLQJQHZMREFUHDWLRQ*(EHOLHYHVWKDWD)HGHUDO5(6LVWKHVLQJOH PRVW LPSRUWDQW VWHS WKDW &RQJUHVV FDQ WDNH WR OD\ WKH ORQJWHUP IRXQGDWLRQ IRU D ±JUHHQFROODU² ZRUNIRUFH DQG D GRPHVWLF UHQHZDEOH HQHUJ\ PDQXIDFWXULQJ EDVH *( DOVR EHOLHYHV WKDW DGRSWLRQ RI D )HGHUDO5(6LVDEVROXWHO\HVVHQWLDOIRUWKH8QLWHG6WDWHVWRPDLQWDLQD OHDGHUVKLSSRVLWLRQLQWKHJOREDOUHQHZDEOHHQHUJ\LQGXVWU\)LQDOO\*( EHOLHYHV WKDW D )HGHUDO 5(6 LV DQ H[FHOOHQW H[DPSOH RI WKH ±FRPSOHPHQWDU\² SROLFLHV WKDW DUH QHHGHG WR DGGUHVV FOLPDWH FKDQJH E\ DFFHOHUDWLQJ WKH QHDUWHUP GHSOR\PHQW RI FRPPHUFLDOO\ DYDLODEOH WHFKQRORJLHV WR UHGXFH JUHHQKRXVH JDV HPLVVLRQV , DFNQRZOHGJH &KDLUPDQ0DUNH\IRUKLVOHDGHUVKLSRQWKLVLPSRUWDQWQDWLRQDOLVVXH *( (QHUJ\ ,QIUDVWUXFWXUH LV D WHFKQRORJ\ OHDGHU ZLWK PRUH WKDQ \HDUV RI LQGXVWU\ H[SHULHQFH 2XU JOREDO WHDP RI HPSOR\HHV RSHUDWHV LQ PRUH WKDQ FRXQWULHV *( (QHUJ\´V EXVLQHVVHV RIIHU D GLYHUVH SRUWIROLR RI SURGXFWV DQG VHUYLFHV LQFOXGLQJ IRVVLO SRZHU JHQHUDWLRQ JDVLILFDWLRQ QXFOHDU RLO JDVZDWHUWUDQVPLVVLRQVPDUW PHWHUV DQG UHQHZDEOH HQHUJ\ WHFKQRORJLHV VXFK DV ZLQG VRODU DQG ELRPDVV *( LV D UHODWLYH QHZFRPHU WR UHQHZDEOH HQHUJ\ KDYLQJ HQWHUHGWKHZLQGEXVLQHVVLQDQGWKHVRODUEXVLQHVVLQ%XW 5HQHZDEOHV KDYH TXLFNO\ EHFRPH DQ LPSRUWDQW FRQWULEXWRU WR RXU
Copyright ©2010 by TheCapitol.Net. All Rights Reserved. No claim made to original U.S. government documents. 703-739-3790 TCNWind.com
269
Goverment Series: Energy: Wind
! '( ) 2(! !) !" ) (.! !) ! ) ) !) % ) 1* ( ;((! ) ;( ! ;( +;;, ) 1* < =5< %
< ! ) ( !) ) !) ( (%( 5 %( 5 3> !) % > )) ?3> $ ) ( 3 ) 1* ) ! % )$! % ) ! ! (%( '
< (( 6 %( 1* % (%( ( ! 6 %( ;; ) ) % $ %(
3= &* (( % ) % ( %( %( ) ( (( ( )$ ) %( %( &@* %! )$ ;((! ) C & ! &@* % ( ( ( 3 %(
>F ) % 3= C$! ! . "!/ 0
@% @ ( *$( $7 ! 4( ( 9" C
6 C$
View more...
Comments
