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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2000
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12000
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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2000
4000
6000
8000
10000
12000
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 $])
Low wind speed sites
High windspeed sites
Depreciated Coal
Depreciated Wind
New Coal
2006: New Wind
Natural Gas (fuel only)
2007: New Wind
COCO22 prices significantly prices significantly
increase the cost of coalincrease the cost of coal
Levelized Cost of Electricity (2010) vs. CO2 Price
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0 10 20 30 40 50
Carbon Price ($/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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2000 2005 2010 2015 2020 2025 2030
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