More than 100 new wind projects larger than 2 MW were installed in 25 states and resulted in nearly 5,000 turbines being commissioned in 2008. The average size of the turbines installed in 2008 was 1.67 MW, a slight increase from the 1.65 MW in 2007. More than half of the turbines were 1.5 MW and the largest turbines were 3 MW. The average project size was about 70 MW.
The world’s largest operating wind plant is the 735-MW Horse Hollow facility that covers 47,000 acres (190 km²) in Texas. More than 5,000 MW of new capacity could be commissioned in 2009, according to industry predictions. However, due to the economic climate and especially difficulties with financing, the level of activity in 2009 is uncertain. Provisions of the American Recovery and Reinvestment Act economic stimulus bill signed in early 2009 could help the industry.
The industry for small wind turbines (defined as having a capacity rating of 100 kW or less) also experienced record-breaking growth in 2008. According to AWEA, the small wind turbine industry grew by 78% in 2008, adding 17.3 MW of new capacity, which brought the total small wind capacity up to more than 80 MW. More than 10,000 units were sold. The United States claimed about 50% of the global market share and is home to about one-third of the 219 identified manufacturers worldwide.
Progress Toward National Objectives
Renewable energy in general and wind energy in particular have been an integral part of economic legislation and policy in late 2008 and early 2009. In October 2008, the Emergency Economic Stabilization Act of 2008 (P.L. 110-343) renewed the production tax credit (PTC) for wind energy. In February 2009, the American Recovery and Reinvestment Act of 2009 further extended the PTC for wind energy to 31 December 2012. The New Energy for America plan put forth by President Obama contains policies that support investment in alternative and renewable energy technologies that are intended to end U.S. dependence on foreign oil, address the global climate crisis, and create millions of new jobs in the green energy sector. One goal of the plan is to ensure that 10% of U.S. electricity comes from renewable sources by 2012 and 25% by 2025.
A report published by the U.S. Department of Energy (DOE) in 2008, examined the potential for wind energy to provide 20% of U.S. electricity by 2030. Wind energy currently provides 1.9% of U.S. electricity. Wind capacity contributing 20% would support 500,000 jobs, reduce green house gas emissions equivalent to taking 140 million vehicles off the road, and save 4 trillion gallons of water. The report concluded that reaching such capacity will require an increase from the current 25.5 GW to more than 300 GW. To achieve this increase by 2030, annual increases in wind capacity will need to exceed 16 GW after an initial 10-year ramp-up period. The 8.5-GW increase in 2008 is a significant step toward meeting this goal.
However, as the 20% Report outlined, there are many challenges to taking full advantage of this opportunity. The research activities of the DOE Wind Program are designed to meet these challenges with efforts aimed at technology, resource assessment, and social acceptance issues. In the near term, a goal of the DOE Wind Program is for 30 of the 50 states to have more than 100 MW of generating capacity by 2010. Industry records show that by the close of 2008, 22 states had 100 MW or more of wind generation operating, and 35 states had some wind plants operating within their borders. The Midwestern state of Iowa now has more installed capacity than California, and seven states have more than 1,000 MW of generating capacity:
• Texas: 7,118 MW
• Iowa: 2,791 MW
• California: 2,517 MW
• Minnesota: 1,754 MW
• Washington: 1,447 MW
• Colorado: 1,068 MW
• Oregon: 1,067 MW
Many states have renewable energy targets and made efforts in 2008 to promote wind energy development. For example, the California governor issued executive orders streamlining the state’s approval process for renewable energy projects and increased the proportion of renewable generation required of utilities to 33% by 2020. The governor of New Jersey called for 30% of the state’s electricity to come from renewable by 2020, with 3,000 MW to come from offshore wind power. He projected that this energy development would create 20,000 new jobs in the state.
Other supporters of wind energy are entering the public arena with proposals to increase installations. Oil developer T. Boone Pickens launched the Pickens Plan that proposes increases in wind-generated electricity to save natural gas, which can then be used as a transportation fuel. This, he argues, would allow the United States to cut imported oil by one-third. Another voice, Nobel Peace Prize recipient and former Vice President Al Gore, argues that it is necessary and possible to obtain 100% of U.S. electricity from renewable energy within 10 years.
Benefits to the National Economy
The new wind generating capacity installed in 2008 represents an investment of about 17 billion USD, according to the AWEA. About 85,000 people were employed in the wind industry, up from 50,000 in 2007. The share of components for wind systems made domestically has increased from less than one-third in 2005 to about half in 2008. In 2007 and 2008, manufacturers of turbines and components announced additions to or expansions of 70 facilities, which created an estimated 8,400 new jobs in 2008 alone.
1 Market characteristics
Independent power producers still owned the bulk of U.S. wind energy generation at the end of 2008, and six companies owned more than 1,000 MW of wind energy assets each: NexEra Energy Resources (formerly FPL Energy) owns 6,290 MW (approximately 25% of the total U.S. capacity); Iberdrola Renewables owns 2,063 MW; MidAmerican Energy owns 1,939 MW; Horizon-EDP Renewables owns 1,872 MW; Invenergy owns 1,276 MW; and Babcock& Brown Wind owns 1,118 MW (8).
Utilities owned approximately 15% of the wind energy projects in 2008. Ownership patterns include the tendency for dominant developers to buy projects developed by others and bring them under central operation, maintenance, and marketing structures. For example, Duke Energy purchased the holdings of wind developer Catamount Energy Corp. with projects in both the United States and the United Kingdom. With this acquisition, Duke Energy Generation Services had more than 500 MW of operating assets and 5,000 MW of wind energy under development in 12 states.
The number of community-owned projects is on the rise, according to Windustry, a nonprofit organization that supports community ownership of wind projects. By July 2008, the total capacity for community owned projects was 736 MW. These projects use turbines over 50 kW in capacity and are completely or partly owned by towns, schools, commercial customers, or farmers.
2 Industrial development
General Electric Energy supplied the majority of the turbines, 3,657 MW, purchased in the U.S. in 2008, followed by Vestas with 1,120 MW, Siemens with 791 MW, and Suzlon with 738 MW. New companies entering the U.S. market included Acciona, AWE, Fuhrlander, and REPower. The manufacture of wind turbines in the United States is increasing with the establishment of factories by major international suppliers. Seven of the ten largest suppliers of wind equipment— Acciona, Clipper, Gamesa, GE, Siemens, Suzlon, and Vestas—have manufacturing facilities in the United States. Acciona, based in Madrid, completed a wind turbine manufacturing facility in Iowa that employs more than 100 people. When the plant reaches full capacity, it will supply approximately 2,610 MW of capacity per year. While wind power development brought some foreign manufacturing to the United States, some licensing of U.S. technology also took place. American Superconductor Corporation licensed its 1.65-MW and 2-MW wind turbine designs to South Korea-based Hyundai Heavy Industries Co., Ltd. for sale in the U.S. market beginning in 2009.
More than 100 companies now produce components for wind turbines, including towers, composite blades, bearings, and gears. Reflecting industry growth, AWEA membership grew to more than 1,800 companies in 2008 from 600 in 2005. Most of the new members are companies in the wind power supply chain. Production of small wind turbines is also a significant economic activity according to AWEA’s 2008 Small Wind Turbine Global Market Report. With the increasing number of small turbines entering the market, consumers are questioning product safety and quality. Consumers buying small wind turbines have no third-party information to help them compare products or estimate performance.
To address this issue, the DOE Wind Program is funding and providing technical support for the formation of a Small Wind Certification Council (SWCC), an independent certification body for North America. The SWCC will certify small wind turbines that meet or exceed performance, durability, and safety requirements. The SWCC elected a board of directors in 2008 and will begin to certify turbines in late 2009. Some turbines submitted by manufacturers for certification will be tested in the United States at DOE’s National Renewable Energy Laboratory (NREL) National Wind Technology Center (NWTC) in Golden, Colorado; others may be tested in Canada at the Wind Energy Institute of Canada’s North Cape facility. The SWCC is currently developing protocols for certifying small wind turbine systems, including those not tested at accredited facilities.
Certified turbines will be labeled for rated power, rated annual energy production, and rated sound level. Gaining local acceptance for wind energy projects is key to increasing generation capacity. A decision in Washington State affirmed a contested permit for a large wind energy project. The successful developers conducted wildlife and habitat surveys, committed to post-construction monitoring, established a conservation reserve program to mitigate unavoidable impacts to habitat, and altered project layout in response to local concerns. Such activities earned the support of local citizens and state and regional environmental organizations. Nationally, wind energy companies and environmental groups created the American Wind Wildlife Institute to facilitate timely and responsible development of wind energy while protecting wildlife and wildlife habitats.
3 Economic details
Although wind energy project costs are influenced by many factors, turbine costs are the largest contributor. According to DOE’s Annual Report on U.S. Wind Energy Markets, between 2006 and 2008, capacity-weighted average turbine prices increased by roughly 210 USD/kW—from 1,150 USD/kW to 1,360 USD/kW—and project costs have increased on average by roughly 350 USD/kW during the past several years. This cost increase is driven by increasing commodities prices, unfavorable exchange rates, and fully committed production capacities.
Despite rising turbine costs, the cost of electricity from wind energy is still competitive with that generated by conventional sources in many areas. A database of wind power sales prices maintained by DOE contains price data for 158 wind projects installed since 1998. The capacity-weighted average (projects are weighted by nameplate capacity to represent actual market prices) sales price for projects built in 2008 was roughly 51.5 USD/MWh, up from a low of 30.9 USD/MWh for projects built in 2002 to 2003. This price is what the utility pays to the wind plant operator and includes the benefit of the federal production tax credit and state incentives.
National Incentive Programs
Federal tax incentives and state renewable portfolio standards (RPS) played important roles in the record growth of 2007 and 2008. In most of 2008, uncertainty about the extension of federal tax credits prompted completion of planned projects but may also have caused delays in starting new projects. In October 2008, Congress approved a one-year extension of federal tax credits and added other provisions beneficial to wind energy development. Then in February 2009, the federal incentives were expanded and extended to 2012, providing a predictable and transparent support framework to attract investment.
The U.S. government provides research and development funding and tax incentives for energy sector development because of its importance to society. The Emergency Economic Stabilization Act of 2008 (P.L. 110-343) and the American Recovery and Reinvestment Act of 2009 included important incentives for wind energy. The production tax credit (PTC) encourages investment in new wind plant construction by providing an income tax credit based on electricity production from wind projects. The investment tax credit (ITC) allows 30% of the investment to be refunded in the form of reduced income taxes. ITC may also be taken in the form of an upfront grant equivalent to 30% of total project value. These tax incentives were extended to 31 December 2012.
With the 2009 legislation, wind facility owners can claim the 30% ITC instead of the PTC if they choose. This provision will allow facilities to be leased or subject to a sale and leaseback without a loss of the credit, treating wind projects the way solar projects have been treated in the U.S. tax code. Businesses and home owners are also allowed to claim the full 30% ITC for qualified small wind energy property with no dollar cap on the credit. To further stimulate industrial development, the law also includes a new 30% credit for investment in new or re-equipped manufacturing for wind energy equipment. Several grant programs were also included that will be funded depending on the evolving economic priorities of the government. The legislation also authorized extension of the Loan Guarantee Program for eligible “commercial” technologies such as wind.
The inflation-adjusted value of the PTC in 2008, was 0.021 USD/kWh for wind energy. To be eligible for a PTC, projects had to be in service by the close of 2008. The PTC goes to the owner(s) of the eligible renewable generating project, and is reduced if projects also receive certain types of government grants, tax-exempt bonds, subsidized energy financing, or other federal tax credits. Only projects located in the United States that sell their output to an “unrelated person” may qualify for the PTC. The record-breaking increases in capacity in 2006, 2007, and 2008 are evidence of the PTC’s effectiveness.
State incentive programs
The voluntary purchase of wind-generated electricity through green power or green pricing programs has significantly influenced wind industry growth. According to an analysis conducted by the U.S. Department of Energy, more than 850 utilities across the United States now offer green power programs. Green power sales in 2008 increased by about 20% over 2007, and they represent more than 5% of total electricity sales for some of the most popular programs. By the end of 2008, more than 600,000 utility customers participated in green power programs, which supported approximately 5,000 MW of new renewable power capacity. Wind is the primary source of electricity generated for green energy programs nationwide.
State-mandated RPS programs that require utilities to purchase a percentage of their overall generating capacity from renewable resources also have a significant effect on the wind industry. By the end of 2008, 28 states had adopted RPS approaches. In Missouri, voters approved a renewable electricity standard that requires 15% of the state’s electricity to come from renewables by 2021. Hawaii increased its renewable electricity standard from 20% to 40% by 2030. Wind energy is expected to contribute significantly to achieving these goals. In 2008, state RPS policies collectively called for utilities to procure about 23 billion kWh of new renewable energy generation. By 2010, RPS policies call for utilities to obtain around 58 billion kWh of new renewables, rising to 99 billion kWh in 2012.
Green pricing above the standard electricity rate is one way utilities support their purchases of electricity from wind and solar. The end-user price of green power for residential customers in utility programs in 2008 ranged from 0.0101 USD/kWh to 0.055 USD/kWh above standard electricity rates, with an average premium of 0.014 USD/kWh and a median of 0.015 USD/kWh. Generally, consumers spend about 5.10 USD per month above standard electricity rates for green power through utility programs. Other state programs that provide stimulus for market growth include: grant programs, loan programs, production incentives, and utility resource planning.
The need for increased grid access has been proposed in a study by the investor owned utility American Electric Power and AWEA. The study, which was referenced in the DOE report 20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply, concluded that a transmission superhighway will be needed for the United States to obtain 20% of its electricity from wind. More than 19,000 miles of new 765-kV (high efficiency) transmission lines are proposed, costing 60 billion USD.
To improve grid access, planning and construction of multi-state, extra-high voltage transmission lines is underway. One of these is the Wyoming-Colorado Intertie Project, which will connect the Front Range of Colorado with the windy areas of eastern Wyoming starting in 2013. Project sponsors auctioned 850 MW of capacity, and wind developers subscribed for nearly 70% of the transmission. In another effort, two utilities announced plans to construct a 150-mile, 345-kV transmission line to connect central Maine with future wind projects estimated to be worth 1.6 billion USD. Another project approved by the Texas Public Utility Commission will use 4.9 billion USD to build 2,300 miles of new 345-kV lines to link potential wind development areas with load centers. This line will make it possible to add 11,550 MW of wind to the more than 5,500 MW already operating in Texas.
Incentives for small wind
Many states also have policies and incentives for small wind electric systems. These incentives include rebates and buy-downs, production incentives, tax incentives, and net metering. Several states have adopted buy-down programs that levy a small charge on every kilowatt-hour of electricity sold. The money raised is used to buy down or subsidize the purchase of small renewable energy systems. The subsidy or rebate may be as much as 50% of the cost of a small wind turbine. The rebates become even more effective when combined with low interest loans and net metering programs.
Under net metering policies, electricity customers who install their own grid connected wind turbines are allowed to interconnect their turbines on a reverse-the meter basis with a periodic load offset. The customer is billed only for the net electricity consumed over the entire billing period. In most states, generation beyond what the customer uses during the billing period is sold to the utility at avoided cost or granted back to the utility without payment to the customer. In 2008, 40 states and the District of Columbia offered some form of net metering policy.
R, D&D Activities
Although some states support research activities, most public research and development on wind energy in the United States is sponsored by the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Wind and Hydropower Technologies Program (Wind Program). The mission of the Wind 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. The total budget for the DOE Wind Program was close to 50 million USD for fiscal year (FY) 2008 (1 October 2007 through 1 October 2008). The budget approved for FY 2009 was 55 million USD. And the administration has requessted 75 million USD for FY 2010.
Large wind turbine technology
The DOE Wind Program works to reduce the cost of electricity from large wind systems through in-house research at national laboratories and research contracts to universities and industry. Technology development partnerships make program staff and testing facilities available to help improve the reliability and performance of utility scale wind energy technology.
A new advanced manufacturing initiative by DOE’s Sandia National Laboratories (Sandia), TPI Composites, Iowa State University, and the Iowa Power Fund will work to expand U.S.-based manufacturing and domestic suppliers to the wind industry. The work will target components that are difficult or expensive to inventory, result in downtime when waiting for replacements, or have high transportation costs, such as gearboxes, generators, blades, and towers. For blades, the partnership with the Iowa Power Fund will work to speed up wind turbine blade manufacturing by exploring technology innovation, such as automation.
The industry has identified improving gearbox reliability as an important way to reduce costs of large wind turbines. Gearbox replacement and lubrication account for 30% of the parts cost for the entire turbine system. The DOE Wind Program initiated the wind turbine Gearbox Reliability Collaborative (GRC) in 2006 to validate the design process, including everything from calculating system loads, to rating bearings, to testing full-size gearboxes. Instrumented gearboxes will undergo dynamometer tests and full-scale field tests with support from facilities and expertise at NREL, Sandia, universities, and industry. In 2007, experts shared information on gearbox design and performance at an international workshop sponsored by DOE. In 2008, an international team of analysts compared their predictions of gear tooth loads and bearing loads. Next they will compare these predictions with test data, improve design codes, and improve gearbox designs. The GRC drivetrain and gearbox will be tested by Wind Program researchers in NREL’s 2.5-MW dynamometer test facility.
In 2008, a new positioning system for the dynamometer table was installed to allow quick alignment of the drive shaft with the drivetrain being tested, and researchers successfully tested several drivetrains. Tests conducted on the DeWind 2.2-MW drivetrain for Composite Technology Corporation’s D8.2 wind turbine demonstrated stable and satisfactory operation at power levels ranging from 250 kW to 2 MW. The company worked with the Wind Program to test the machine before it was installed on the company’s prototype turbine in Sweetwater, Texas. Another prototype drive train was tested for Global Energy Concepts. The 1.5-MW single-stage permanent-magnet drive train was developed under the DOE Wind PACT project and is available for new utility-scale wind turbine system designs.
Research on wind turbine blades aims to improve their efficiency and durability while reducing manufacturing costs. Work supported by the Wind Program is demonstrating the advantages of advanced materials (carbon and carbon/glass hybrids) and is exploring resin transfer molding (RTM) and vacuum-assisted RTM manufacturing processes for utility-scale wind turbine blades. This work also includes designing and fabricating advanced blades that incorporate innovations such as carbon/e-glass hybrid materials and aeroelastic tailoring methodologies. To validate process developments and design modeling tools, the Wind Program is working with the U.S. Department of Agriculture to test substructures and small blades in Bushland, Texas.
To verify the performance of new blade designs and materials, the Wind Program worked with several industry and academic partners in 2008 to conduct structural tests on a variety of blades. Knight & Carver’s 27-m STAR blade developed with Sandia and a 46.2-m blade developed by TPI composites were among those tested. The NREL structural testing group also worked with Sandia researchers to test the 9-m TX-100 wind turbine blade developed by Sandia.
In response to increased industrial activity across North America and larger blades being deployed on wind turbines, the Wind Program is working with consortiums in Massachusetts and Texas to develop two new blade test facilities. The new facilities will give industry an unbiased, technical environment in which to ensure that the new larger blades, up to 80-m long, meet design and certification standards. The DOE Wind Program is also working with Spain’s Centro Nacional de Energías Renovables (CENER) to test blades manufactured in Spain. Information obtained from CENER will be used to accelerate the development of the program’s new blade test facilities in the United States.
To increase public understanding of wind technology, the Wind Program provides objective information to regional organizations, federal agencies, state and local energy offices, Native American agencies, rural agencies, electrical co-operatives, and utilities. An important activity in 2008 was the publication of a series of reports on the economic benefits, reduction of carbon dioxide, and water conservation benefits of developing 1,000 MW of wind energy in each of 10 states. For example, the economic benefits from 1,000 MW of wind energy development in Indiana were calculated to be 1.3 billion USD, annual CO2 reductions were estimated at 3.1 million tons, and annual water savings were estimated to be 1,684 million gallons.
The Wind Program also provided support for six new wind application centers that opened in 2008. The centers, located at universities, provide training for engineers in wind applications and also support the Wind for Schools Project. The objectives of the Wind for Schools Project are to engage rural school teachers and students in wind energy education, equip college students with the skills and knowledge they need to become wind energy professionals, and introduce distributed wind energy systems to rural communities. To accomplish these objectives, project members assist schools with the installation of a small wind turbine through a coordinated community effort. Five small wind turbines have been installed so far. The university students analyze the wind resources, energy usage, siting, permitting, land use, and financials, and they oversee installation of the power and data acquisition systems.
The Wind Program is working to develop Regional Wind Energy Institutes (RWEIs) because many of the most challenging wind energy issues are regional in nature. The goal of the RWEIs is to provide accurate and current information to members of state wind outreach teams that are actively engaged in furthering wind power development by educating key constituents in their respective states.
Members of the Bats and Wind Energy Cooperative (BWEC) include the Wind Program, Bat Conservation International, AWEA, and the U.S. Fish and Wildlife Service. In January 2008, 50 experts attended a workshop in Texas to find solutions that support the continued growth of wind energy production while preserving bats and their habitats. As a result, BWEC began a project to validate and refine methods to predict wind plant impacts on bats based on preconstruction assessments. An acoustic system to discourage bats from entering wind facilities will also be field-tested. In another development, changes to operations during low wind conditions at a plant in rural Pennsylvania, owned and operated by Iberdrola Renewables, demonstrated nightly reductions in bat fatality ranging from 53–87% with marginal annual power loss.
The American Wind Energy Association provided support for the formation of the American Wind Wildlife Institute (AWWI). AWWI focuses its efforts on facilitating timely and responsible development of wind energy while protecting wildlife and wildlife habitat. The institute will do this through research, mapping, mitigation, and public education on best practices in wind plant siting and wildlife habitat protection.
In another study, Wind Program researchers are investigating whether artificial intelligence can be used to detect the presence of birds using Next-Generation Radar (NEXRAD) data. NEXRAD is a network of 158 high-resolution Doppler weather radars operated by the National Weather Service. The program is working with the U.S. Geological Survey and Montana State University to develop algorithms to differentiate biological (bird) echoes in the NEXRAD data to help identify migratory flyways.
Wind power-radar interaction issues gained national attention when wind projects were delayed over fears that radar operations would be affected by wind turbines. The National Wind Coordinating Collaborative convened a forum of more than 100 experts, including representatives from AWEA, DOE, the Department of Defense, and the Federal Aviation Administration to discuss the influence of wind energy on aviation radar and possible mitigation strategies. In 2008, a study funded by the Office of Homeland Security concluded that wind farms can interfere with radar tracking of aircraft and weather but that no fundamental physical constraint prohibits the accurate detection of aircraft and weather patterns around wind farms. Interference occurs when radar signals are reflected back by wind turbines, causing clutter on the radar screens. The report also concluded that it is difficult to distinguish wind farm signatures from airplanes and weather, and that quantitative evaluation tools and metrics are needed to determine when a wind farm poses a sufficient threat to a radar installation.
The Next Term
Thanks to the extension and expansion of federal and state incentives, utilities and developers are expected to move forward with many wind energy projects in 2009. However, the contraction of the global economy has cast uncertainty on the effect of the ITC and other incentives in a time of tight lending and limited tax equity. The President’s New Energy for America plan aims to ensure that 10% of U.S. electricity comes from renewable sources by 2012, and 25% by 2025. Although achieving 20% wind energy by 2030 is technically feasible, it will require comprehensive R&D to address a broad spectrum of challenges facing industry today. The nation’s transmission infrastructure needs to be expanded and upgraded, and manufacturing facilities need to increase and improve their production processes to keep pace with demand.
Author: NREL, United States.