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Executive Summary & Overview
1.1 INTRODUCTION AND COLLABORATIVE APPROACH
Energy prices, supply uncertainties, and environmental concerns are driving the United States to rethink its energy mix and develop diverse sources of clean, renewable energy. The nation is working toward generating more energy from domestic resources—energy that can be cost-effective and replaced or "renewed" without contributing to climate change or major adverse environmental impacts.
In 2006, President Bush emphasized the nation's need for greater energy efficiency and a more diversified energy portfolio. This led to a collaborative effort to explore a modeled energy scenario in which wind provides 20% of U.S. electricity by 2030. Members of this 20% Wind collaborative (see 20% Wind Scenario sidebar) produced this report to start the discussion about issues, costs, and potential outcomes associated with the 20% Wind Scenario. A 20% Wind Scenario in 2030, while ambitious, could be feasible if the significant challenges identified in this report are overcome.
This report was prepared by DOE in a joint effort with industry, government, and the nation's national laboratories (primarily the National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory). The report considers some associated challenges, estimates the impacts, and discusses specific needs and outcomes in the areas of technology, manufacturing and employment, transmission and grid integration, markets, siting strategies, and potential environmental effects associated with a 20% Wind Scenario.
In its Annual Energy Outlook 2007, the U.S. Energy Information Administration (EIA) estimates that U.S. electricity demand will grow by 39% from 2005 to 2030, reaching 5.8 billion megawatt-hours (MWh) by 2030. To meet 20% of that demand, U.S. wind power capacity would have to reach more than 300 gigawatts (GW) or more than 300,000 megawatts (MW). This growth represents an increase of more than 290 GW within 23 years.
The data analysis and model runs for this report were concluded in mid-2007. All data and information in the report are based on wind data available through the end of 2006. At that time, the U.S. wind power fleet numbered 11.6 GW and spanned 34 states. In 2007, 5,244 MW of new wind generation were installed. With these additions, American wind plants are expected to generate an estimated 48 billion kilowatt-hours (kWh) of wind energy in 2008, more than 1% of U.S. electricity supply. This capacity addition of 5,244 MW in 2007 exceeds the more conservative growth trajectory developed for the 20% Wind Scenario of about 4,000 MW/year in 2007 and 2008. The wind industry is on track to grow to a size capable of installing 16,000 MW/year, consistent with the latter years in the 20% Wind Scenario, more quickly than the trajectory used for this analysis.
This report examines some of the costs, challenges, and key impacts of generating 20% of the nation's electricity from wind energy in 2030. Specifically, it investigates requirements and outcomes in the areas of technology, manufacturing, transmission and integration, markets, environment, and siting.
The modeling done for this report estimates that wind power installations with capacities of more than 300 gigawatts (GW) would be needed for the 20% Wind Scenario. Increasing U.S. wind power to this level from 11.6 GW in 2006 would require significant changes in transmission, manufacturing, and markets. This report presents an analysis of one specific scenario for reaching the 20% level and contrasts it to a scenario of no wind growth beyond the level reached in 2006. Major assumptions in the analysis have been highlighted throughout the document and have been summarized in the appendices. These assumptions may be considered optimistic. In this report, no sensitivity analyses have been done to estimate the impact that changes in the assumptions would have on the information presented here. As summarized at the end of this chapter, the analysis provides an overview of some potential impacts of these two scenarios by 2030. This report does not compare the Wind Scenario to other energy portfolio options, nor does it outline an action plan.
To successfully address energy security and environmental issues, the nation needs to pursue a portfolio of energy options. None of these options by itself can fully address these issues; there is no "silver bullet." This technical report examines one potential scenario in which wind power serves as a significant element in the portfolio. However, the 20% Wind Scenario is not a prediction of the future. Instead, it paints a picture of what a particular 20% Wind Scenario could mean for the nation.
Report contributors include a broad cross section of key stakeholders, including leaders from the nation's utility sector, environmental communities, wildlife advocacy groups, energy industries, the government and policy sectors, investors, and public and private businesses. In all, the report reflects input from more than 50 key energy stakeholder organizations and corporations. Appendix D contains a list of contributors. Research and modeling was conducted by experts within the electric industry, government, and other organizations.
This report is not an authoritative expression of policy perspectives or opinions held by representatives of DOE.
1.1.3 ASSUMPTIONS AND PROCESS
To establish the groundwork for this report, the engineering company Black & Veatch (Overland Park, Kansas) analyzed the market potential for significant wind energy growth, quantified the potential U.S. wind supply, and developed cost supply curves for the wind resource. In consultation with DOE, NREL, AWEA, and wind industry partners, future wind energy cost and performance projections were developed. Similar projections for conventional generation technologies were developed based on Black & Veatch experience with power plant design and construction (Black & Veatch 2007).
To identify a range of challenges, possible solutions, and key impacts of providing 20% of the nation's electricity from wind, the stakeholders in the 20% Wind Scenario effort convened expert task forces to examine specific areas critical to this endeavor: Technology and Applications, Manufacturing and Materials, Environmental and Siting Impacts, Electricity Markets, Transmission and Integration, and Supporting Analysis. These teams conducted in-depth analyses of potential impacts, using related studies and various analytic tools to examine the benefits and costs. (See Appendix D for the task force participants.)
NREL's Wind Deployment System (WinDS) model was employed to create a scenario that paints a "picture" of this level of wind energy generation and evaluates some impacts associated with wind. Assumptions about the future of the U.S. electric generation and transmission sector were developed in consultation with the task forces and other parties. Some assumptions in this analysis could be considered optimistic. Examples of assumptions used in this analysis are listed in the "Wind Energy Deployment System Model Assumptions" text box and are presented in detail in Appendices A and B. For comparison, the modeling team contrasted the 20% Wind Scenario impacts to a reference case characterized by no growth in U.S. wind capacity or other renewable energy sources after 2006.
In the course of the 20% Wind Scenario process, two workshops were held to define and refine the work plan, present and discuss preliminary results, and obtain relevant input from key stakeholders external to the report preparation effort.
1.1.4 REPORT STRUCTURE
The 20% Wind Scenario in 2030 would require improved turbine technology to generate wind power, significant changes in transmission systems to deliver it through the electric grid, and large expanded markets to purchase and use it. In turn, these essential changes in the power generation and delivery process would involve supporting changes and capabilities in manufacturing, policy development, and environmental regulation. As shown in Figure 1-1, the chapters of this report address some of the requirements and impacts in each of these areas. Detailed discussions of the modeling process, assumptions, and results can be found in Appendices A through C.
1.1.5 SETTING THE CONTEXT: TODAY'S U.S. WIND INDUSTRY
After experiencing strong growth in the mid-1980s, the U.S. wind industry hit a plateau during the electricity restructuring period in the 1990s and then regained momentum in 1999. Industry growth has since responded positively to policy incentives when they are in effect (see Figure 1-2). Today, the U.S. wind industry is growing rapidly, driven by sustained production tax credits (PTCs), rising concerns about climate change, and renewable portfolio standards (RPS) or goals in roughly 50% of the states.
U.S. turbine technology has advanced steadily to offer improved performance, and these efforts are expected to continue (see "Initiatives to Improve Wind Turbine Performance" sidebar). In 2006 alone, average turbine size increased by more than 11% over the 2005 level to an average size of 1.6 MW. In addition, average capacity factors have improved 11 % over the past two years. To meet the growing demand for wind energy, U.S. manufacturers have expanded their capacity to produce and assemble the essential components. Despite this growth, U.S. components continue to represent a relatively small share of total turbine and tower materials, and U.S. manufacturers are struggling to keep pace with rising demand (Wiser & Bolinger 2007).
In 2005 and 2006, the United States led the world in new wind installations. By early 2007, global wind power capacity exceeded 74 GW, and U.S. wind power capacity totaled 11.6 GW. This domestic wind power has been installed across 35 states and delivers roughly 0.8% of the electricity consumed in the nation (Wiser and Bolinger 2007).
1.2 SCENARIO DESCRIPTION
The 20% Wind Scenario presented here would require U.S. wind power capacity to grow from 11.6 GW in 2006 to more than 300 GW over the next 23 years (see Figure 1-3). This ambitious growth could be achieved in many different ways, with varying challenges, impacts, and levels of success. The 20% Wind Scenario would require an installation rate of 16 GW per year after 2018 (see Figure 1-4). This report examines one particular scenario for achieving this dramatic growth and contrasts it to another scenario that—for analytic simplicity—assumes no wind growth after 2006. The authors recognize that U.S. wind capacity is currently growing rapidly (although from a very small base) and that wind energy technology will be a part of any future electricity generation scenario for the United States. At the same time, a great deal of uncertainty remains about the level of contribution that wind could or is likely to make. In the 2007 Annual Energy Outlook (EIA 2007), an additional 7 GW beyond the 2006 installed capacity of 11.6 GW is forecast by 2030. Other organizations are projecting higher capacity additions, and it would be difficult to develop a "most likely" forecast given today's uncertainties. The analysis presented here sidesteps these uncertainties and contrasts some of the challenges and impacts of producing 20% of the nation's electricity from wind with a scenario in which no additional wind is added after 2006. This results in an estimate, expressed in terms of parameters, of the impacts associated with increased reliance on wind energy generation under given assumptions. The analysis was also simplified by assuming that the contributions to U.S. electricity supplies from other renewable sources of energy would remain at 2006 levels in both scenarios (see Figure A-6 for resource mix).
The 20% Wind Scenario has been carefully defined to provide a base of common assumptions for detailed analysis of all impact areas. Broadly stated, this 20% scenario is designed to consider incremental costs while recognizing realistic constraints and considerations (see the "Considerations in the 20% Wind Scenario" sidebar in Appendix A). Specifically, the scenario describes the mix of wind resources that would need to be captured, the geographic distribution of wind power installations, estimated land needs, the required utility and transmission infrastructure, manufacturing requirements, and the pace of growth that would be necessary.
1.2.1 WIND GEOGRAPHY
The United States possesses abundant wind resources. As shown in Figure 15, current "bus-bar" energy costs for wind (based on costs of the wind plant only, excluding transmission and integration costs and the PTC) vary by type of location (land-based or offshore) and by class of wind power density (higher classes offer greater productivity). Transmission and integration will add additional costs, which are discussed in Chapter 4. The nation has more than 8,000 GW of available land-based wind resources (Black & Veatch 2007) that industry estimates can be captured economically. NREL periodically classifies wind resources by wind speed, which forms the basis of the Black & Veatch study. See Appendix B for further details.
Electricity must be transmitted from where it is generated to areas of high electricity demand, using the existing transmission system or new transmission lines where necessary. As shown in Figure 1-6, the delivered cost of wind power increases when costs associated with connecting to the existing electric grid are included. The assumptions used in this report are different than EIA's assumptions and are documented in Appendices A and B. The cost and performance assumptions of the 20% Wind Scenario are based on real market data from 2007. Cost and performance for all technologies either decrease or remain flat over time. The data suggest that as much as 600 GW of wind resources could be available for $60 to $100 per megawatt-hour (MWh), including the cost of connecting to the existing transmission system. Including the PTC reduces the cost by about $20/MWh, and costs are further reduced if technology improvements in cost and performance are projected. In some cases, new transmission lines connecting high-wind resource areas to load centers could be cost-effective, and in other cases, high transmission costs could offset the advantage of land-based generation, as in the case of large demand centers along wind-rich coastlines.
NREL's WinDS model estimated the overall U.S. generation capacity expansion that is required to meet projected electricity demand growth through 2030. Both wind technology and conventional generation technology (i.e., coal, nuclear) were included in the modeling, but other renewables were not included. Readers should refer to Appendices A and B to see a more complete list of the modeling assumptions. Wind energy development for the 20% Wind Scenario optimized the total delivered costs, including future reductions in cost per kilowatt-hour for wind sites both near to and remote from demand sites from 2000 through 2030. Chapter 2 presents additional discussion of wind technology potential. Of the 293 GW that would be added, the model specifies more than 50 GW of offshore wind energy (see Figure 1-7), mostly along the northeastern and southeastern seaboards.
Based on this least-cost optimization algorithm (which incorporates future cost per kilowatt-hour of wind and cost of transmission), the WinDS model estimated the wind capacity needed by state by 2030. As shown in Figure 1-8, most states would have the opportunity to develop their wind resources. Total land requirements are extensive, but only about 2% to 5% of the total would be dedicated entirely to the wind installation. In addition, the visual impacts and other siting concerns of wind energy projects must be taken into account in assessing land requirements. Chapter 5 contains additional discussion of land use and visual impacts. Again, the 20% Wind Scenario presented here is not a prediction. Figure 1-8 simply shows one way in which a 20% wind future could evolve.
1.2.2 WIND POWER TRANSMISSION AND INTEGRATION
Development of 293 GW of new wind capacity would require expanding the U.S. transmission grid in a manner that not only accesses the best wind resource regions of the country but also relieves current congestion on the grid, including new transmission lines to deliver wind power to electricity consumers. Figure 1-9 conceptually illustrates the optimized use of wind resources within the local areas as well as the transmission of wind-generated electricity from high-resource areas to high-demand centers. This data was generated by the WinDS model (given prescribed constraints). The figure does not represent proposals for specific transmission lines.
Until recently, concerns had been prevalent in the electric utility sector about the difficulty and cost of dealing with the variability and uncertainty of energy production from wind plants and other weather-driven renewable technologies. But utility engineers in some parts of the United States now have extensive experience with wind plant impacts, and their analyses of these impacts have helped to reduce these concerns. As discussed in detail in Chapter 4, wind's variability is being accommodated, and given optimistic assumptions, studies suggest the cost impact could be as little as the current level—10% or less of the value of the wind energy generated.
1.2.3 ELECTRICAL ENERGY MIX
The U.S. Energy Information Administration (EIA) estimates that U.S. electricity demand will grow by 39% from 2005 to 2030, reaching 5.8 billion MWh by 2030. The 20% Wind Scenario would require delivery of nearly 1.16 billion MWh of wind energy in 2030, altering U.S. electricity generation as shown in Figure 1-11. In this scenario, wind would supply enough energy to displace about 50% of electric utility natural gas consumption and 18% of coal consumption by 2030. This amounts to an 11 % reduction in natural gas across all industries. (Gas-fired generation would probably be displaced first, because it typically has a higher cost.)
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