Hans Detweiller
Advancing Wind Power in Illinois Conference 2009
Hans Detweiller American Wind Energy Association Keynote Address July 15, 2009, 10:40 AM
7/22/2009
Advancing Wind Power in Illinois 2009
Hans Detweiler Director of State Policy American Wind Energy Association
Wind Industry Overview of 2008-2009, Nationally and in Illinois
1
7/22/2009
U.S. is World Leader in Wind Power
2008: Another Record Year of Growth • Installed 8,353 MW in 2008 • Enough to serve over 2 million homes • Channeled Ch l d $17 billi billion off economic i iinvestment iinto U.S. economy
• 50% growth in total wind power generating capacity • Over 40% average annual growth for the last four years
2
7/22/2009
Percentage of Generation Added by Year • 42% of all new generating facilities added in 2008 were wind power plants • Wind second only to natural gas for 4th year in a row
Wind Projects Waiting in Queues
Close to 300,000 MW of proposed wind projects are in interconnection queues. queues
3
7/22/2009
U.S. Small Wind Market
Percent of Electricity Generation
4
7/22/2009
Wind Power Installations by State
Windpower 2009: A Record Success • AWEA was last in Chicago for Global Windpower 2004: • 3,600 3 600 attendees in 2004 vs vs. 23 23,000 000 in 2009 • Total installed wind capacity in 2004 was ~6,300 MW • Last year, in 2008 alone, the industry installed ~8,500 MW, and we have as of today achieved a cumulative installed capacity p y of over 28,000. • Quadrupled both attendance and installed capacity in five years since 2004
5
7/22/2009
New Manufacturing • 55 manufacturing facilities opened, expanded or announced in 2008 • Over 13,000 new manufacturing jjobs created in one year; • 35,000 total new jobs
Over 500,000 Total Jobs Supported pp By y Wind In DOE report
Fact: in 2008, 35,000 new jobs added
Source: AWEA, Sample of Manufacturing Facilities, November 2008
Doubling Renewable Energy in Three Years • President Obama has called for the U.S. to double its production of renewable energy in 3 years
President Obama gives “thumbs up” to wind energy industry leaders at AWEA member Cardinal Fastener manufacturing facility
6
7/22/2009
Illinois’ Investment Climate
Illinois’ Investment Climate • Best Overall Wind Resource State in PJM Market; Potentially Competitive in MISO • Decent Transmission Access and Proximity to Load Centers • Support For Wind at State and Local Levels (with exceptions) • SB 1923 now enacted (High Impact Business)
• Lack of Long-Term Procurement Contracts • SB 2150 awaiting Governor’s signature
• High Property Taxes
7
7/22/2009
Assessing the Relative Cost of Illinois Wind ● Illinois Commerce Commission/ IPA should do a Market Conditions study to assess total consumer impacts of increasing renewables: REC prices alone are not a proxy for total price impact ● NYSERDA Study: • “Summit Blue’s analysis estimates that the reduction in wholesale electricity prices in the year 2010 are likely to be approximately $2/MWh. Each MWh of renewable energy added has the effect of lowering electricity costs by approximately $100/MWh, $100/MWh significantly more than $15 or more paid per MWh for the REC.” ● Negative Pricing incidents in NY, IL, TX, Bonneville
Federal Policy: Time for a National Renewable Energy Standard
8
7/22/2009
Global Renewable Energy Requirements (Both Percentage and MW Goals)
Global Competition • At least 66 nations, states and provinces have national renewable energy targets. (as of April 2008) • At least 37 nations have mandatory renewable energy requirements, including all countries in the EU, China, India, Rwanda and other developing countries. • Of the top 10 countries with wind development, most h have nott only l R Renewable bl E Energy St Standards d d (RES) b butt also Feed-in tariffs.
9
7/22/2009
RES: Best Policy to Grow Green Jobs An RES sends a signal to manufacturers that the US is invested in the wind industry and provides the long-term policy necessary to ensure investment. ●“The U.S. needs to establish a strong Renewable Electricity Standard to provide a robust manufacturing base in this country.” - Roby Roberts, Senior Vice President of External Relations, Vestas Americas p over 300 jobs j lost when Maytag y g left ●“In Newton,, Iowa,, TPI replaced town. We are looking to create more Newton type stories. A significant Renewable Electricity Standard would provide that needed signal." - Steve Lockard, President and CEO, TPI Composites
RES: Best Policy to Grow Green Jobs ● “We are aware of 10 to 12 foreign suppliers who have expressed a strong interest in opening [manufacturing] facilities in the U.S., but are awaiting a long term policy signal.” - Edward Lowe, GE
● “REpower believes passage of long-term policy supportive of wind energy, such as a national RES, provides a strong signal to companies such as REpower that are ready to make [a U.S.] investment in wind industry jobs and economic growth.” - Steve Dayney, CEO, REpower USA
10
7/22/2009
National Renewable Electricity Standard: Centerpiece of US Energy Policy • Creates jobs and economic development • Saves consumers money and protects against fuel price spikes • National RES would save American consumers as much as $100 billion in lower electricity and natural gas bills (Wood Mackenzie)
• Reduces green house gas pollution • 25% renewable electricity by 2025 could meet over 40% of the emission reductions needed to reach 1990 CO2 levels by 2020 in the electric sector
• Critical importance of aggressive near-term target, such as 10% by 2012
Federal Policy: Building a Green Power Superhighway
11
7/22/2009
U.S. Wind Resource Map (onshore)
Copyright © 2008 3TIER, Inc. All Rights Reserved. For permission to reproduce or distribute: [email protected]
Balkanized Grid Hurts Consumers • For example, average retail electricity prices in New York and New England are almost 15 cents per kilowatt kilowatt-hour hour (kWh) (kWh), 67% higher than national average of 8.9 cents per kWh • Price premium amounts to a $1.6 billion annual cost to consumers in region (EIA)
12
7/22/2009
Land Use and Cost Benefits of High Voltage Transmission Lines
JCSP Generation Location, 5% Wind Case (wind is green, on-shore only)
13
7/22/2009
JCSP Generation Location, 20% Wind Case (wind is green, on-shore only)
Key JCSP Findings: Bigger is Cheaper ● The 5% Wind Scenario would add 10,000 miles of new EHV transmission at a cost of approximately $50 billion. ● In contrast contrast, the 20% Wind Scenario would add 15 15,000 000 miles of new EHV transmission at a cost of approximately $80 billion—spending 50% more allows 4x as much development. ● Total consumer savings from the 20% scenario (capital and operating costs) would be about $12 billion per year ● Transmission T i i would ld accountt ffor about b t 2 percentt off total t t l electric sector capital and operating costs between now and 2024 (similar finding to DOE)
14
7/22/2009
Texas: Savings From Transmission Results from Texas Study Show that Benefits of Transmission for Wind Exceed Costs
Reforms Needed for Green Power Superhighways • Interconnection-Wide Transmission Planning • Western & Eastern Interconnections must identify where new or expanded transmission capacity is necessary to connect renewable energy resources to grid and, ultimately, load centers.
• Interconnection-Wide Transmission Cost Allocation and Certainty for Cost Recovery • Facilities identified in interconnection-wide plan as necessary for development of green power superhighways need to be eligible for broad, regional cost allocation.
• Federal Siting S • Transmission siting process must be reformed, ideally to follow model of FERC siting authority over interstate natural gas pipelines.
15
7/22/2009
Transmission White Paper www.awea.org/GreenPowerSuperhighways.pdf • Highlights barriers that hinder investment in transmission infrastructure • Identifies potential policy solutions
C Conclusions: l i 1. Need Federal RES 2. Need Transmission Green Superhighway 3. Illinois is well-positioned but needs to implement
16
7/22/2009
Thank you! www.awea.org Hans Detweiler [email protected]
See you in Dallas Dallas, 2010: www.windpowerexpo.org
Joint Coordinated System Plan Study: ● Released January 2009 ● Conducted by grid operators in the Eastern US: MISO, SPP, PJM, TVA, MAPP and several key members of SERC; also modeled in NY and New England ● Study models 20% wind penetration and 5% wind penetration in the Eastern US, and examines the transmission that would be needed for either scenario • 5% scenario assumes on-shore wind and use of wind resources closest to load to meet existing state RESs • 20% scenario assumes on-shore and use of best wind resources to meet 20% federal RES ● Highly detailed model of power system physics physics, economics economics, and wind output (movies at JCSPstudy.org) ● Results show it is cost-effective to build major wind in the Midwest and move that energy to demand centers in the East
17
7/22/2009
Conceptual Vision: Green Power Superhighways
New U.S. Manufacturing Capacity Between 1Q 2007 and 4Q 2008 (24 months), there was significant growth in the industry’s manufacturing capacity. capacity • 19 new facilities online • 31 announced facilities • 21 announced facility expansions A total of 71 facilities have come on-line, been announced, or have expanded.
3
18
7/22/2009
Current Manufacturing Capacity • There are well over 120 manufacturing facilities for turbines and large components currently online in the U.S. • U.S. manufacturers are producing all the turbine’s components. • In 2005, about 30% of turbine & major components were made in the U.S., but in 2008 domestically manufactured components in turbines accounted for about 50% by value.
The Variable Nature of Wind Energy • Wind is an energy resource, not a capacity resource • ‘Reliability’ concerns often founded on serious misunderstandings of how grid operates, how wind projects fit into system operations
• Wind power output is ‘variable,’ not ‘intermittent’ • Wind forecasting plays key role today, will play increasingly important role in future
• There is a cost to managing wind’s variability - depends upon system’s characteristics, but is generally low • Many wind integration studies have been performed in US, EU
19
7/22/2009
Current European Wind Energy Penetration UK
1.82%
Austria
3.28%
Netherlands
3.40%
G Greece
3 67% 3.67%
EU-27
3.78%
EU-25
3.89%
EU-15
4.28%
Germany
7.00%
Ireland
8.42%
Portugal
9 26% 9.26%
Spain
11.76%
Denmark 0.00%
21.22% 5.00%
10.00%
15.00%
20.00%
25.00%
Source: EWEA 2007 and Eurelectic 2006
Wind Energy Variability Because wind energy output adds almost no variability on the minute-to-minute time scale, very large amounts of wind energy can be added to the grid with virtually no impact on the use of spinning reserves.
Study
Wind Amount
1 minute
5 minute
1 hour
Texas 2008
15,000 MW
6.5 MW
30 MW
328 MW
California 2007
12,500 MW (plus 2 600 MW 2,600 of Solar)
3.3 MW
14.2 MW
129 MW
New York 2005
3,300 MW
---
1.8 MW
152 MW
20
7/22/2009
Wind Integration Lessons Learned • A robust transmission grid can significantly reduce integration costs • Integrating wind is a cost issue issue, not a reliability issue • 2008 Xcel Energy analysis, wind integration costs are: • $3.51 per MWh in the 10% wind penetration scenario • $4.77 $4 77 per MWh in i the th 15% scenario i • $5.13 per MWh in the 20% wind scenario
Wind Integration Lessons Learned • Wind forecasting can significantly reduce integration costs by reducing uncertainty • Wind resources spread over larger areas are less variable • Diverse wind has very little variability on the minute-tominute time scale • Wind is easier to integrate on more flexible power systems • Market/system operation reforms reforms, such as control area consolidation, can significantly reduce wind integration costs, as can coordinated regional operations
21
7/22/2009
Wind Integration Costs
Domestically Manufactured Components There has been a dramatic shift towards domestic manufacturing for wind turbine components 2008 2005
Domestically Mfg Components
2008
Domestically Mfg Components
Inported Components
Inported Components
~25% domestic components ~2,500 MW installed ~1,500 turbines installed
~50% domestic components ~8,500 MW installed ~5,300 turbines installed
22
7/22/2009
Wind Energy Industry Seeks To Provide at least 20% Wind Energy by 2030 Wind capacity has already doubled in the past three years
8,300 MW -- 42% of new U.S. capacity -- added in 2008
Wind Power Emits No Pollution CO2 Reductions From Electricity Sector
4,500 4,000 3,500 3,000 2,500 2,000 1,500
No New Wind Scenario CO2 emissions 20% Wind Scenario CO2 emissions USCAP path to 80% below today’s levels by 2050
1,00 0 500 0
2006
2010
2014
2018
2022
2026
2030
Source: U.S. DOE, 20% Wind Energy by 2030
23
7/22/2009
Wind Power Uses No Water • Avoids the consumption of 4 trillion gallons of water cumulatively through 2030 • Cuts electric sector water consumption by 17% in 2030
Source: U.S. DOE, 20% Wind Energy by 2030
20% Wind Vision Impact on Generation Mix in 2030 • Reduces electric utility natural gas consumption by 50% • Reduces total natural gas consumption by 11% • Natural gas consumer benefits: $86-214 billion* • Reduces electric utility coal consumption by 18% • Avoids construction of 80 GW of new coal power plants
100% 80% 60% 40% 20% 0%
No New Wind Natural Gas Coal Nuclear
20% Wind Hydro Wind
Source: U.S. DOE, 20% Wind Energy by 2030
24
7/22/2009
Economic Costs of 20% Vision • 2% investment diff difference between 20% Wind and No New Wind
Billions of 2006 Dollars
$3000 $2500 $ $2000 $1500 $1000 $500 $0 No New Wind Wind O&M Costs Wind Capital Costs Transmission Costs
20% Wind Fuel Costs Conventional O&M Costs Conventional Capital Costs Source: U.S. DOE, 20% Wind Energy by 2030
20% Wind Energy by 2030 • U.S. Department of Energy: The U.S. possesses s fficient and affordable sufficient wind resources to obtain at least 20% of its electricity from wind by the year 2030. • 20% report drives the wind industry’s industry s agenda for the new President and Congress
25
