20% wind vision: a great lakes opportunity larry flowers national renewable energy laboratory march...
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20% Wind Vision: 20% Wind Vision: A Great Lakes OpportunityA Great Lakes Opportunity
Larry Flowers Larry Flowers National Renewable Energy Laboratory National Renewable Energy Laboratory
March 2008March 2008
People Want Renewable Energy!People Want Renewable Energy!
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United States Europe Rest of World
1. Germany: 21800 MW2. United States: 16740 MW 3. Spain: 13915 MW4. India: 7720 MW5. China: 5000 MW
Source: WindPower Monthly and AWEA
World total Jan 2008: 90,419 MW
Total Installed Wind CapacityTotal Installed Wind Capacity
Installed Wind Capacities – Dec ’07*Installed Wind Capacities – Dec ’07*
*Preliminary data
Drivers for Wind PowerDrivers for Wind Power
• Declining Wind Costs• Fuel Price Uncertainty• Federal and State
Policies• Economic Development• Public Support• Green Power• Regional Water Scarcity• Energy Security• Carbon Risk
Comparative Generation CostsComparative Generation Costs
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1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
2005$/MWh
Operating Cost of Natural Gas Combined Cycle
Operating Cost of Natural Gas Combustion Turbine
Average Price of Wind Power With PTC
Wholesale Price Range for Flat Block of Power
Average Price of Wind Power Without PTC
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$/M
Wh
Operating Cost of Natural Gas Combined Cycle
Operating Cost of Natural Gas Combustion Turbine
Average Price of Wind Power With PTC
Wholesale Price Range for Flat Block of Power
Average Price of Wind Power Without PTC
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1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
2005$/MWh
Operating Cost of Natural Gas Combined Cycle
Operating Cost of Natural Gas Combustion Turbine
Average Price of Wind Power With PTC
Wholesale Price Range for Flat Block of Power
Average Price of Wind Power Without PTC
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$/M
Wh
Operating Cost of Natural Gas Combined Cycle
Operating Cost of Natural Gas Combustion Turbine
Average Price of Wind Power With PTC
Wholesale Price Range for Flat Block of Power
Average Price of Wind Power Without PTC
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)
20
06
$/M
Wh
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
☼ Minimum solar or customer-sited RE requirement* Increased credit for solar or customer-sited RE
¹PA: 8% Tier I / 10% Tier II (includes non-renewables)
DSIRE: www.dsireusa.org March 2008
State Goal
State RPS
Solar water heating eligible
Renewables Portfolio StandardsRenewables Portfolio Standards
☼ PA: 18%¹ by 2020
☼ NJ: 22.5% by 2021
CT: 23% by 2020
MA: 4% by 2009 +1% annual increase
WI: requirement varies by utility; 10% by 2015 goal
IA: 105 MW
MN: 25% by 2025(Xcel: 30% by 2020)
TX: 5,880 MW by 2015
☼ AZ: 15% by 2025
CA: 20% by 2010
☼ *NV: 20% by 2015
ME: 30% by 200010% by 2017 - new RE
HI: 20% by 2020
RI: 16% by 2020
☼ CO: 20% by 2020 (IOUs)*10% by 2020 (co-ops & large munis)
☼ DC: 11% by 2022
☼ NY: 24% by 2013
MT: 15% by 2015
IL: 25% by 2025
VT: RE meets load growth by 2012*WA: 15% by 2020
☼ MD: 9.5% in 2022
☼ NH: 23.8% in 2025
OR: 25% by 2025 (large utilities)5% - 10% by 2025 (smaller utilities)
*VA: 12% by 2022
MO: 11% by 2020
☼ *DE: 20% by 2019
☼ NM: 20% by 2020 (IOUs)10% by 2020 (co-ops)
☼ NC: 12.5% by 2021 (IOUs)10% by 2018 (co-ops & munis)
ND: 10% by 2015
Peetz Table Wind Energy Center, COPeetz Table Wind Energy Center, CO
• 400.5 MW (1.5-MW turbines)• Landowner payments: $2
million/year, $65 million over 30-year period
• 300 – 350 workers during peak construction (80% local)
• 16 – 18 O&M positions• Total annual tax payments:
$2.3 million/year (10% of total county budget); $70 million over 30 years
• Located near Peetz, CO• Owned by FPL Energy• Constructed in 2007
Weatherford Wind Energy Center, OKWeatherford Wind Energy Center, OK
• 147 MW (1.5-MW turbines)
• Landowner payments: $300,000 in annual lease payments
• 150 workers during peak construction
• 6 fulltime O&M positions• Property taxes: $17
million over 20 years• Sawartzky Construction
received $300,000 in revenue from the project
• Owned by FPL Energy• Constructed in 2005
• 144 MW (1800-kW turbines)• Landowner payments: $18
million over the life of the project
• 175 workers during peak construction (25% local)
• 8 fulltime O&M positions• Property taxes: $1 million
(2006/7)• 50 Wyoming companies
subcontracted during the construction period
• Located in Uinta County, WY (population 20,213)
• Owned by FPL Energy• Constructed in 2003
Wyoming Wind Energy CenterWyoming Wind Energy Center
Total Econom ic Im pacts to Ohio from energy equivalent new w ind and new coal
$0
$500
$1,000
$1,500
$2,000
$2,500
Wind (1478 MW) Coal (500 MW, 26% in-state)
Dol
lars
in m
illion
s
Landowner revenue
P roperty taxes
Coal
Operations
Construction
Energy-equivalent Energy-equivalent new wind vs. new coal in Ohionew wind vs. new coal in Ohio
Ohio – Economic Impacts Ohio – Economic Impacts from 1000 MW of new wind developmentfrom 1000 MW of new wind development
Payments to Landowners: • $2.7 Million/yr Local Property Tax Revenue:• $22 Million/yrConstruction Phase:• 1,550 new jobs• $189 M to local economiesOperational Phase:• 250 new long-term jobs• $21 M/yr to local economies
Construction Phase:• 1,400 new jobs• $125 M to local
economiesOperational Phase:• 300 local jobs• $30 M/yr to local
economies
Wind energy’s economic “ripple effect”
Construction Phase = 1-2 yearsOperational Phase = 20+ years
Total economic benefit = $1.3 billion
New local jobs during construction = 2,950
New local long-term jobs = 550
Direct Impacts Indirect & Induced Impacts
Totals (construction + 20yrs)
All jobs rounded to the nearest 50 jobs; All values greater than $10 million are rounded to the nearest million
Environmental BenefitsEnvironmental Benefits
• No SOx or NOx
• No particulates
• No mercury
• No CO2
• No water
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
Increasing Attention in North AmericaIncreasing Attention in North America
• IEEE Power Engineering Society Magazine, November/December 2005
• Updated in 2007• Wind Power Coordinating
Committee Wind Super-Session, Summer 2008
• Utility Wind Integration Group (UWIG): Operating Impacts and Integration Studies User Group
• www.uwig.org
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.
“The future ain’t what it used to be.”
- Yogi Berra
- 200 400 600 800 1,0000
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Quantity Available, GW
Lev
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ost
of
En
erg
y, $
/MW
h
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
What does 20% Wind look like?What does 20% Wind look like?
Source: AWEA 20% Vision
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Cumulative Capacity (left scale)
Annual Capacity (right scale)
• National and state policy uncertainty• Mixed stakeholder perspectives and knowledge• Electricity supply planning based on capacity• Variable wind output viewed as unreliable• Incomplete comparative generation assessments• Mismatch of wind and transmission development
timeframes• Federal lending all source requirements for G&T’s• Lack of interstate approach to transmission development• Lack of utility financial incentives to own wind facilities• High cost and low turbine availability for community projects• High cost and permitting challenges of <1 MW turbines • Uncertainty in emerging emissions REC markets
Market ChallengesMarket Challenges
Great Lakes Region – Economic ImpactsGreat Lakes Region – Economic ImpactsFrom the 20% Vision From the 20% Vision
(61.5 GW new development from Onshore and Offshore)(61.5 GW new development from Onshore and Offshore)
Direct Impacts
Payments to Landowners: • $156 Million/year Local Property Tax Revenue:• $640 Million/yearConstruction Phase:• 91.3 thousand new jobs• $12.0 Billion to local economiesOperational Phase:• 14.9 thousand new long-term jobs• $1.4 Billion/yr to local economies
Construction Phase:• 91.3 thousand new jobs• $9.3 Billion to local
economiesOperational Phase:• 14.2 thousand local jobs• $1.5 Billion/yr to local
economies
Wind energy’s economic “ripple effect”
Construction Phase = 1-2 yearsOperational Phase = 20+ years
Indirect & Induced Impacts
Totals (construction + 20yrs)
Total economic benefit = $79 Billion
New local jobs during construction = 182,600
New local long-term jobs = 29,100
20% Wind Vision Employment20% Wind Vision Employment
-
20,000
40,000
60,000
80,000
100,000
120,000
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160,000
180,000
200,000
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
Job
s
Operations
Construction
Manufacturing
49
Fuel Savings From WindFuel Savings From Wind
0.0E+00
5.0E+09
1.0E+10
1.5E+10
2.0E+10
2.5E+10
3.0E+10
3.5E+10
4.0E+10
4.5E+10
2000
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2010
2012
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2020
2022
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MM
Btu
Gas Fuel Savings
Coal Fuel Savings
Gas Fuel Usage(20%wind)Coal Fuel Usage(20%wind)
Reduction in National GasConsumption in 2030 (%)
Natural Gas Price Reduction in 2030 (2006$/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
Electric Sector COElectric Sector CO22 Emissions Emissions
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
12 Key Messages 12 Key Messages
1. Wind energy provides multiple benefits at the national, regional, state, and local levels
2. Targeted messages and education are needed for the diverse set of stakeholder interests and perspectives, including regional variations in same.
3. Convergence of energy security, carbon liability and fuel uncertainty concerns is likely to transform the market for US electricity supply.
4. Federal and state policies are needed for a diversified and robust wind energy portfolio
5. Community and distributed wind are important building blocks for public acceptance of a 20% wind future.
6. Resource planning and procurement should maximize use of low marginal cost, zero-emissions energy resources, which displace more expensive fossil fuel
12 Key Messages con’t.12 Key Messages con’t.
7. All environmental (including water savings) and economic impacts and risks should be included in comparative resource economics.
8. Wind is the crop of the 21st Century for rural America, and the resulting economic benefits need to be included in comparative assessments of generation options.
9. Wind deployment can ramp up rapidly and incrementally to meet local and regional load growth.
10.The federal sector (both facilities and transmission) represents significant opportunities for leadership in use and transmission of wind.
11.Meeting most load growth with wind power buys time for the development and commercialization of advanced coal technologies able to sequester carbon.
12. In air quality markets, policies need to be crafted carefully to account for non-emitting technologies.
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: Spring 2008
Source: AWEA 20% Vision
MISO-PJM Wind Integration StudyMISO-PJM Wind Integration StudyNote: Nebraska and most of South Dakota are not in MISO, but are within the study footprint.
HighMediumLow
Wind Powering America Priority StatesWind Powering America Priority States
Regional Wind Energy Institutes (RWEI)Regional Wind Energy Institutes (RWEI)
Why is there no wind development in AZ, NV, UT, MI, IN, OH, MD, VA, NC?
Co-op/Local Utility
WTG Manufacturer
XYZ Company Sponsor
School Administration
State Energy Office
State Facilitator
WAC
DOE
Science Teacher
& Students
NREL/WPA
Community
Wind for Schools
Green Tags Marketer
RE Grant Funds
D – Data
$ – Funds Flow
– Knowledge
C – Coordination
G.T. – Green Tags
WTG – Wind Turbine
T/A – Technical Assistance
$
$
$
$
$
$
T/A
T/A
T/A
T/A
C
C
C
$
D
WTG
$
WPA State SummitWPA State Summit
“I think your annual states summit has evolved into one of the best – maybe even the best – wind-information-transfer events of the year. My guess is that it raises the productive energy level of all who participate.”
Ed DeMeo – June 12, 2007
“With public sentiment nothing can fail; without it, nothing can succeed.”
- A. Lincoln
Carpe Ventem
www.windpoweringamerica.gov