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Dept. of Energy Report Shows How Far U.S. Wind Energy Has Come and the Challenges Ahead

This blog post first appeared, under a different title, on LiveScience.

For U.S. wind power, last year was both the best of times and the worst of times. That’s the conclusion from the new Wind Technologies Market Report released last week by the U.S. Department of Energy (DOE) and prepared by DOE’s Lawrence Berkeley National Laboratory (LBNL). 

Wind power does a number of things very well: It produces electricity without the carbon pollution that causes global warming (or the local air pollution that sends kids to hospital emergency rooms with asthma attacks), and it creates jobs in fields like manufacturing, construction and engineering. 

US Wind

Here’s where things are going well:

• The share of the nation’s electricity supplied by wind power is higher than ever — 4.5 percent. That number might seem small in comparison some countries’—in Denmark, onshore and offshore wind power supply 34 percent, and in Spain, Portugal and Ireland, the percentage hits about 20 percent. These are numbers the U.S. could easily achieve and should definitely pursue. In fact, many states are on their way. Iowa and South Dakota currently get more than 25 percent of their electricity from wind power. Another seven states get at least 12 percent. For an economy as large as ours, though, 4.5 percent is an impressive milestone as we pursue numbers that are bigger still. 

• Thanks to government policies, the price of wind power bought under long-term contracts has now reached all-time lows. In fact, wind power is now cost-competitive with low-cost natural gas in some regions. Indeed, the LBNL researchers wrote in research-ese, “The sample of [wind-power power purchase agreements] executed in 2013 has an average price stream that begins below the range of natural gas fuel cost projections, and that remains below even the low-end of gas price forecasts for two decades.” Translation: Over the next 20 years, wind power may well be cheaper than even low-cost natural gas.

• New wind turbines have the capacity to produce more power than ever, thanks to government and corporate investment in research and development. The average capacity of a newly installed wind turbine in the United States is 1.87 megawatts, an increase of 162 percent from 15 years ago. Total installed wind capacity in the U.S is now over 61 gigawatts, a 140 percent increase in just five years. Today’s wind turbines are more productive than ever, due  improvements in technology. As a result, the amount of electricity generated by wind power has doubled over the last five years and wind power in the United States now provides enough electricity to power 15.5 million American homes.

• Demand for wind power creates American manufacturing jobs. In the fiscal year 2012-2013, about 70 percent of wind power components used in the United States were manufactured here, compared to only 20 percent in the 2006-2007 year. That’s an admirable increase. Moreover, exports of U.S. wind-power technology components are climbing, from only $16 million in 2007 to $421 million in 2013.

• New financial vehicles, called “yieldcos,” are helping to finance more wind power projects. Yieldcos are publicly traded companies—spun off by more traditional parent companies—which own operating assets like wind or other renewable energy projects that generate predictable cash-flow. This allows a broader range of investors and can reduce the cost of financing for renewable energy projects. Though yieldcos are new to the renewable energy industry, similar vehicles, such as the master limited partnership, have long been used in other energy industries. 

• More transmission infrastructure came online in 2013. In fact, 3,500 miles of it. Much more is planned, too. It will help get wind power from the remote locations where it’s produced to the population centers where it’s needed.

• More than a dozen proposed offshore wind projects are advancing in the United States. Despite decades of growth in the offshore wind sector in Europe, the United States has yet to build its first full-scale offshore wind turbine. That’s likely about to change. The LBNL report estimates that some 15 proposed offshore wind projects are now advancing in the United States. Two of them—Cape Wind and the Deepwater Block Island project—are close to putting steel in the water for the construction of the first U.S. offshore wind projects. 

Despite all that good news, the Wind Technologies Market Report contains some bad news as well. The LBNL researchers found federal and state policies that support wind power have a huge impact on the technology’s continued expansion. That’s why it’s imperative for the U.S. Congress to extend the now-expired Production Tax Credit (PTC) for land-based wind power and the Investment Tax Credit (ITC) for offshore wind power when it returns for the lame-duck session in November. The expiration of the PTC and the ITC has put a pall over this otherwise promising industry. Congress has the power to change that.

For example: 

• Wind power jobs dropped from 80,700 to 50,500 in 2013. Quite simply, by failing to extend the PTC and the ITC last year, and by providing only short-term extensions in recent years, Congress served the wind power industry a blow. Some wind-power employment has picked up in recent months, thanks to the 2013 PTC extension. (It covers projects that began construction by the end of 2013.) But the LBNL researchers noted, “with the PTC now expired and its renewal uncertain…wind deployment beyond 2015 is also uncertain.”

• 2013 saw a precipitous drop in wind power installation. Only about one gigawatt of new capacity was added last year, compared to more than 13 gigawatts in 2012. (The failure to extend the PTC in 2012 put on hold many promising projects that would have been developed in 2013.) Moreover, wind power “represented only 7 percent” of new U.S. electric capacity in 2013, compared to an average of 33 percent between 2007 and 2012, the report added.

• After leading the world in new installed capacity in 2012, the United States dropped to 6th in the world in 2013. That’s behind China, Germany, India, the United Kingdom and Canada. This drop leaves our wind-power businesses and their employees vulnerable to international competition. 

The LBNL researchers in their report emphasized how important strong public policies are to wind power’s continued success. State renewable-energy standards are an example. They’ve helped drive almost 70 percent of wind-power capacity between 1999 and 2013. “In 2013, this proportion was 93 percent,” the LBNL researchers wrote. 

But the most important of the policies has been the PTC. We need Congress to extend it, and the ITC, as soon as the summer recess ends. These policies can help ensure next year’s Wind Technologies Market Report will contain more good news, and continued success for the U.S. wind industry.

U.S. wind / shutterstock
Kit Kennedy's picture

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Robert Bernal's picture
Robert Bernal on September 4, 2014

Subsidy would be best utilized for sources with the highest EROEI and the highest CF (then they could be less per unit of energy).

Wind has a rather high EROEI but a low CF, meaning that in a world free of fossil fuels (for backup) much of that wind energy would have to be lost to conversion into making batteries and storage into such batteries, or (at even more loss) into clean liquid fuels such as ammonia.

PV has an even lower CF and a lower EROEI. Therefore, subsidy should go into developing the machinery necessary to make all the parts for collection and storage, very much cheaper and for advanced molten salt based nuclear.

Guy Ventner's picture
Guy Ventner on September 4, 2014

Funny pieces like this never show things like the vast amount of ruined Open Space are wasted with Wind and Solar. Or the billions in research, study, and various and sundry that are wasted on Solar and Wind that aren’t accounted for! Anyone I know ivolved in this goes to at least half a dozen conferences where the FEDs are pedaling this. What of the millions of bats and birds killed…yet many places never can get around to producing public information on this. The state of Mass has spent billions on wind energy, yet not one study on the animals killed. Sadly the trail of lies make it hard to believe anything the government says about wind energy. US FWS said that wind turbines would kill 1 to 2 birds a year. Studies in NJ and DE confirmed 80 plus kills(endangered as well as common) per turbine per year(it depends on location). The State of Penn saw 25 bat deaths per turbine…. The government always claim the newest technolgy is proven harmless…a couple years down the road…repeat the same once it is exposed that the previous set of statement were fraudlent lies. In Spain they were paying billions to solar energy producers producing power at night….they were using deisel generators at night.  I would like to see an accounting of all the government departments turning out “free” stuff for these political boondoggles…as it seems the people receiving the most money are like Obama recently named Irish Ambassador who was kicking back federal subsidize and was a major Obama donor!!! Can you tell me how many times crooked investment banks can write down a solar or wind farm to produce a zero tax bill on billions of income??? I know the answer…do you?

Clifford Goudey's picture
Clifford Goudey on September 4, 2014

Robert, I think you’re over emphasizing the significance of capacity factor.  If the EROEI is respectable, then CF is already included.

Economical storage will improve the functioning of many sources of power, thermal plants in particular, that drop in efficiency when run at off-design power levels.  Presently pumped hydro, with a round-trip efficiency of ~70% is doing the lion’s share of storage.  More large-scale and cost-effective technologies are needed.

Clifford Goudey's picture
Clifford Goudey on September 4, 2014

Yes, Roger.  2.2 cents per kWh for 10 years.  It doesn’t seem like much of a subsidy but fossil fuel advocates have been hammering on the program with stunning success.  The simple fact is, the subsidy we grant fossil fuel plants by allowing them to freely dump their emissions into our atmosphere is far more costly to us. 

William Hughes-Games's picture
William Hughes-Games on September 4, 2014

Assuming your figures are correct (they are not) have you taken into account the wild lives lost by stripping off the top of a mountain, dumping the gangue into a river valley and stripping off the first layer of coal.  this is then repeated layer by layer untill all the coal has been burnt.  Have you taken into account the pollution from burning this coal.  More radioactivity released than a nuclear plant. lots of mercury and other heavy metals plus othe pollutants.  And finally, are you one of the folks that doesn’t think the oft predicted climate crisis will happen if we continue to raise atmospheric and oceanic carbon levels.  It wouldn’t be so bad if climate change only effected you but if your attitude prevails, you are going to take the rest of us with you.

Robert Bernal's picture
Robert Bernal on September 4, 2014

I forgot to add that pumped hydro storage has a very good energy stored on investment. Batteries are best for cars.

Peter Lang's picture
Peter Lang on September 6, 2014

This article begins with a presumption that wind power is good and the rest of the article is built on that premise.  

in Denmark, onshore and offshore wind power supply 34 percent, and in Spain, Portugal and Ireland, the percentage hits about 20 percent. These are numbers the U.S. could easily achieve and should definitely pursue.”

But the premise is not supported.  Why should the US get to 20% of its electricity supplied by wind power?

What is the projected overall cost-benefit of achieving 20% wind penetration?.  What is the probability it will make any measureable improvement to the climate?

Clifford Goudey's picture
Clifford Goudey on September 5, 2014

Howard, speaking of research at Caltech you wrote, “an order of magnitude more wind power than standard wind farms.”  Sure, because current wind farm practice is to maximize the ROI not the energy per square meter.  The spacing between individual turbines is an optimization process where minimizing the interference between neighboring units based on the prevailing winds in balanced against land and installation costs. 

Prof. Dabiri’s close packing of VAWTs may maximize w/m^2 but the costs would be prohibitive and the peak performance he reports is very dependent on the wind direction being properly aligned with his careful layout.

On an individual basis and taken as a collection, VAWTs are constrained by the same Betz limit as more standard HAWTs.  Today’s wind turbine technology is highly refined and the two ways economic performance is being meaningfully improved is through increasing their size and/or reducing material and installation costs.  It’s an energy technology whose time has come and if we care at all about our energy future, we should be rolling them out feverishly.

 

Robert Bernal's picture
Robert Bernal on September 6, 2014

We should be building wind power on an exponential level IF we build the non fossils (and non biofuels) backup at the same level. The reason I say non biofuels is because at that (exponential) level, the poor energy density of biofuels is not capable of powering the planetary (and space faring) civilization that I want without devoting entire continents worth of land. Therefore, we need to put pumped hydro on “every hill” to back millions of turbines and solar.

Or simply re-develop and globally deploy meltdown proof reactors for the bulk of power and mobility generation.

Clifford Goudey's picture
Clifford Goudey on September 6, 2014

Robert, so you’re keen on being a spacefarer.  Good luck and bring lots to read.  I’m actially OK with the interplanetary stuff.  It’s the energy involved in getting you to escape velocity that bothers me, not to mention the energy, goods, and services needed to keep you alive during your adventure.  I suggest you instead focus on making planet Earth more sustainable and I’m not sure meltdown-proof reactors will do the trick.

Nathan Wilson's picture
Nathan Wilson on September 7, 2014

Thermal energy storage at high temperature nuclear plants is also a very promising technology.  Several of the Gen IV reactor concepts will be in the right temperature range (sodium-cooled IFR, salt fueled LFTR, salt cooled FHR).

But I think fuel synthesis which is used as dispatchable load will eliminate the need for most storage in wind or nuclear-rich grids (solar-rich non-fossil grids will likely need storage).

Nathan Wilson's picture
Nathan Wilson on September 7, 2014

Interesting.  Horizontal axis wind turbines beat out verticle turbines back in the 1980s; FloWind was an early pioneer in the technology.  Maybe Dabiri knows something that modern turbine companies don’t, or more likely he is just optimizing one parameter and ignoring cost.

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