Wind Energy UpdateWind Energy Update

Larry Flowers Larry Flowers National Renewable Energy Laboratory National Renewable Energy Laboratory

November 30, 2007November 30, 2007Salt Lake City, UTSalt Lake City, UT

Capacity & Cost TrendsCapacity & Cost Trends

Increased Turbine Size - R&D Advances - Manufacturing Improvements

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1980 1985 1990 1995 2000 2005

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Capacity (MW)

Cost of Energy (cents/kWh*)

Cost of Energy and Cumulative Domestic Capacity

*Year 2000 dollars

Increased Turbine Size - R&D Advances - Manufacturing Improvements

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1980 1985 1990 1995 2000 2005

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Capacity (MW)

Cost of Energy (cents/kWh*)

Cost of Energy and Cumulative Domestic Capacity

*Year 2000 dollars

U.S Lagging Other Countries for U.S Lagging Other Countries for Wind As a Percentage of Electricity ConsumptionWind As a Percentage of Electricity Consumption

Installed Wind Capacities Installed Wind Capacities (‘99 – Sept 07)(‘99 – Sept 07)

Drivers for Wind PowerDrivers for Wind Power

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

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

Natural Gas – Historic PricesNatural Gas – Historic Prices

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1990199119921993199419951996199719981999200020012002200320042005200620072008200920102011

Nominal $/MMBtu (Henry Hub)

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Nominal $/MMBtu (Henry Hub)

Source: LBNL

NYMEXnatural gas futures strip

from 07/21/2006

Daily price history of 1st-nearbyNYMEX natural gas futures contract

Nationally, Wind Has Been Competitive Nationally, Wind Has Been Competitive with Wholesale Power Prices in Recent Yearswith Wholesale Power Prices in Recent Years

In 2006, Wind Projects Built Since 1997 Were In 2006, Wind Projects Built Since 1997 Were Competitive with Wholesale Power Prices in Most RegionsCompetitive with Wholesale Power Prices in Most Regions

Wind Cost of EnergyWind Cost of Energy

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1990 1995 2000 2005 2010 2015 2020

COE (¢/kWh [constant 2006 $])

Low wind speed sites

High windspeed sites

Depreciated Coal

Depreciated Wind

New Coal

2006: New Wind

Natural Gas (fuel only)

2007: New Wind

COCO22 prices significantly prices significantly

increase the cost of coalincrease the cost of coal

Levelized Cost of Electricity (2010) vs. CO2 Price

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Carbon Price ($/ton CO2)

2006$/MWh

Coal PC

Coal IGCC

Coal IGCC w/CCS

Gas CC

Nuclear

Wind Class 6

Wind Class 4

Wind Offshore Class 6

Source: UCS/Black & Veatch

Economic Development ImpactsEconomic Development Impacts

• Land Lease Payments: 2-3% of gross revenue $2500-4000/MW/year

• Local property tax revenue: ranges widely - $300K-1700K/yr per 100MW

• 100-200 jobs/100MW during construction

• 6-10 permanent O&M jobs per 100 MW

• Local construction and service industry: concrete, towers usually done locally

Environmental BenefitsEnvironmental Benefits

• No SOx or NOx

• No particulates

• No mercury

• No CO2

• No water

Source: NOAA

Source: NOAA

Energy-Water NexusEnergy-Water Nexus

Key Issues for Wind Power Key Issues for Wind Power

• Policy Uncertainty• Siting and Permitting: avian,

noise, visual, federal land • Transmission: FERC rules,

access, new lines

• Operational impacts: intermittency, ancillary services, allocation of costs

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

Integrating Wind into Power SystemsIntegrating Wind into Power Systems

State of the Union Address“…We will invest more in … revolutionary and…wind

technologies”

Advanced Energy Initiative

“Areas with good wind resources have the potential to supply up to 20% of the electricity consumption of the United States.”

A New VisionA New VisionFor Wind Energy in the U.S.For Wind Energy in the U.S.

- 200 400 600 800 1,0000

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Quantity Available, GW

Levelized Cost of Energy, $/MWh

Onshore

Class 6

Class 4

Class 7

Class 5

Class 3

Offshore

Class 6

Class 4

Class 7

Class 5

Class 3

10% Available 10% Available

TransmissionTransmission

2010 Costs w/ PTC, $1,600/MW-mile, w/o Integration costs

Utah – Economic Impacts Utah – Economic Impacts From the 20% Vision From the 20% Vision

(2,449 MW new Utah development)(2,449 MW new Utah development)

Payments to Landowners: • $6.53 million/year Local Property Tax Revenue:• $27.24 million/yearConstruction Phase:• 3,883 new jobs• $461.8 M to local economiesOperational Phase:• 616 new long-term jobs• $52.0 M/yr to local economies

Construction Phase:• 3,292 new jobs• $292.2 M to local economiesOperational Phase:• 497 local jobs• $46.1 M/yr to local economies

Wind energy’s economic “ripple effect”

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

Indirect & Induced Impacts

Totals (construction + 20yrs)

Direct Impacts

Total economic benefit = $2.72 billion

New local jobs during construction = 7,175

New local long-term jobs = 1,113

Fuel Savings From WindFuel Savings From Wind

0.0E+00

5.0E+09

1.0E+10

1.5E+10

2.0E+10

2.5E+10

3.0E+10

3.5E+10

4.0E+10

4.5E+10

Gas Fuel Savings

Coal Fuel Savings

Gas Fuel Usage(20%wind)Coal Fuel Usage(20%wind)

Reduction in National GasConsumption in 2030 (%)

Natural Gas Price Reduction in 2030 (2006$/MMBtu)

Present Value Benefits(billion 2006$)

Levelized Benefit of Wind ($/MWh)

11% 0.6 -1.1- 1.5 86 - 150 - 214 16.6 - 29 - 41.6

Electricity Sector Fuel Usage

Cumulative Carbon SavingsCumulative Carbon Savings

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CumulativeCarbon Savings

(2007-2050, MMTCE)

Present Value Benefits(billion 2006$)

Levelized Benefit of Wind($/MWh-wind)

4,182 MMTCE $ 50 - $145 $ 9.7/MWh - $ 28.2/MWh

Incremental direct cost to society $43 billion

Reductions in emissions of greenhouse gasses and other atmospheric pollutants

825 M tons (2030)

$98 billion

Reductions in water consumption 8% total electric

17% in 2030

Jobs created and other economic benefits

140,000 direct

$450 billion total

Reductions in natural gas use and price pressure

11%

$150 billion

Net Benefits: $205B + Water savings

Results: Results: CostsCosts & Benefits& Benefits

ConclusionsConclusions

• 20% wind energy penetration is possible• 20% penetration is not going to happen under business

as usual scenario• Policy choices will have a large impact on assessing the

timing and rate of achieving a 20% goal• Key Issues: market transformation, transmission, project

diversity, technology development, policy, public acceptance

• 20% Vision action plan: December 2007

Source: AWEA 20% Vision

Carpe Ventem

www.windpoweringamerica.gov