Upload
haminh
View
214
Download
1
Embed Size (px)
Citation preview
1
WIND AND WATER POWER TECHNOLOGIES OFFICE
August 20, 2014
2
2013 Wind Technologies Market Report
Purpose, Scope, and Data:
• Publicly available annual report summarizing key trends in the U.S. wind
power market, with a focus on 2013
• Scope primarily includes wind turbines over 100 kW in size
• Separate DOE-funded annual reports on distributed and offshore wind
• Data sources include AWEA, EIA, FERC, SEC, etc. (see full report)
Report Authors:
• Primary authors: Ryan Wiser and Mark Bolinger, Berkeley Lab
• Contributions from others at Berkeley Lab, Exeter Associates, NREL
Funded by: U.S. DOE Wind & Water Power Technologies Office
Available at: http://energy.gov/eere/wind/wind-program
3
Report Contents
• Installation trends
• Industry trends
• Technology trends
• Performance trends
• Cost trends
• Wind power price trends
• Policy & market drivers
• Future outlook
4
New to the Current Edition of the Report
• New chapter on technology trends, including the expanded
use of turbines originally designed for lower wind speed sites
• Comparison of wind power sales prices to projections of
future natural gas prices
• Expansion and refinement of manufacturing, supply chain,
and domestic content assessments
5
Key Findings • Annual wind additions were modest in 2013, but signals point to
more-robust growth in 2014/15
• Notwithstanding 2013, wind has been a significant source of new
generation in the U.S. since 2007
• Supply chain has been under duress, but domestic manufacturing
content for nacelle assembly, blades, and towers is strong
• Turbine scaling is boosting expected wind project performance,
while the installed cost of wind is on the decline
• Trends are enabling very aggressive wind power pricing and solid
economics in many regions despite low natural gas prices
• Growth after 2015 remains uncertain, dictated in part by future
natural gas prices, fossil plant retirements, and policy decisions,
though technological advancements and recent declines in the
price of wind energy have boosted future growth prospects
6
Installation Trends
7
• Capacity additions in 2013 were just 8% of 2012 additions
• $1.8 billion invested in wind power project additions
• Cumulative wind capacity up by less than 2%, bringing total to 61 GW
Wind Power Additions Stalled in 2013, with only 1,087 MW of New Capacity Added
0510152025303540455055606570
0123456789
1011121314
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
201
3
Annual U.S. Capacity (left scale)
Cumulative U.S. Capacity (right scale)
Cu
mu
lati
ve
Ca
pa
cit
y (
GW
)
An
nu
al
Ca
pa
cit
y (
GW
)
8
Wind Represented 7% of Electric-Generating Capacity Additions in 2013
But… from 2007-2013, wind represented 33% of capacity additions nation-wide, and a much higher proportion in some regions
Interior
GreatLakes
West
Southeast
Northeast
9
• Led by decline in U.S. market, global additions 20% lower in 2013
• U.S. remains a distant second to China in cumulative capacity
The U.S. Fell to 6th Place in Annual Wind Power Capacity Additions
Annual Capacity (2013, MW)
Cumulative Capacity (end of 2013, MW)
China 16,088 China 91,460 Germany 3,237 United States 61,110 India 1,987 Germany 34,468 United Kingdom 1,833 Spain 22,637 Canada 1,599 India 20,589 United States 1,087 United Kingdom 10,946 Brazil 948 Italy 8,448 Poland 894 France 8,128
Sweden 724 Canada 7,813 Romania 695 Denmark 4,747 Rest of World 7,045 Rest of World 51,031
TOTAL 36,137 TOTAL 321,377
Source: Navigant; AWEA project database for U.S. capacity
10
U.S. Lagging Other Countries in Wind As a Percentage of Electricity Consumption
Note: Figure only includes the countries with the most installed wind power capacity at the end of 2012
11
Geographic Spread of Wind Power Projects in the United States Is Reasonably Broad
Note: Numbers within states represent cumulative installed wind capacity and, in brackets, annual additions in 2013.
12
California Installed the Most Capacity in 2013; 9 States Exceed 12% Wind Energy
• Texas has more than twice as much wind capacity as any other state
• 23 states had >500 MW of capacity at end of 2013 (16 > 1 GW, 10 > 2 GW)
• 2 states have >25% of total in-state generation from wind (9 states > 12%)
Installed Capacity (MW) Percentage of
In-State Generation
Annual (2013) Cumulative (end of 2013) Actual (2013)*
California 269 Texas 12,354 Iowa 27.4%
Kansas 254 California 5,829 South Dakota 26.0%
Michigan 175 Iowa 5,177 Kansas 19.4%
Texas 141 Illinois 3,568 Idaho 16.2%
New York 84 Oregon 3,153 Minnesota 15.7%
Nebraska 75 Oklahoma 3,134 North Dakota 15.6%
Iowa 45 Minnesota 2,987 Oklahoma 14.8%
Colorado 32 Kansas 2,967 Colorado 13.8%
Ohio 3 Washington 2,808 Oregon 12.4%
Massachusetts 3 Colorado 2,332 Wyoming 8.4%
Alaska 3 New York 1,722 Texas 8.3%
North Dakota 2 North Dakota 1,681 Maine 7.4%
Indiana 1 Indiana 1,544 California 6.6%
Puerto Rico 1 Wyoming 1,410 Washington 6.2%
Pennsylvania 1,340 New Mexico 6.1%
Michigan 1,163 Montana 6.0%
Idaho 973 Hawaii 5.1%
South Dakota 783 Nebraska 4.8%
New Mexico 778 Illinois 4.7%
Montana 645 Vermont 3.4%
Rest of U.S. 0 Rest of U.S. 4,762 Rest of U.S. 0.8%
TOTAL 1,087 TOTAL 61,110 TOTAL 4.1% * Based on 2013 wind and total generation by state from EIA’s Electric Power Monthly.
Source: AWEA project database, EIA
13
No Commercial Offshore Turbines Commissioned in the U.S., but 15 Projects Totaling 5.1 GW Are Somewhat More Advanced in Development
• Two projects have power
purchase agreements (PPAs):
• Cape Wind (MA)
• Deepwater Wind (RI)
• Three demonstration projects
selected for deployment by DOE
• Scale model of floating turbine
deployed in ME in June 2013
• MD established offshore wind
set-aside within state’s RPS
• Fishermen (NJ), Baryonyx (TX)
Statoil (ME) faced set-backs
14
Interconnection Queues Demonstrate that a Substantial Amount of Wind Is Under Consideration
Wind represented ~36% of capacity in sampled 37 queues
But… absolute amount of wind (and coal & nuclear) in
sampled queues has declined in recent years whereas
natural gas and solar capacity has increased
Not all of this capacity will be built….
• AWEA reports >13 GW of capacity under construction after 1Q2014
15
95% of Wind Capacity Planned for Texas, Midwest, Southwest Power Pool, PJM, Northwest, Mountain Region, and California
Not all of this capacity will be built….
16
Industry Trends
17
GE Captured 90% of U.S. Wind Turbine Market Share in a Slow 2013
• Siemens came in a distant second, at 8% market share
• 2013 U.S. installations by Chinese and South Korean manufacturers only included Sany Electric (8 MW)
• Globally, Vestas recaptured the mantle as top supplier, with GE falling to 5th
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013
Other
Suzlon
Acciona
Clipper
Nordex
Mitsubishi
REpower
Gamesa
Vestas
Siemens
GE Wind
Tu
rbin
e M
an
ufa
ctu
rer
U.S
. M
ark
et
Sh
are
18
Manufacturing Supply Chain Experienced Substantial Growing Pains
Note: map is not intended to be exhaustive
• Over last decade, foreign and domestic
manufacturers have localized and
expanded U.S. manufacturing presence
• 5 of 10 turbine OEMs with largest share
of U.S. market through 2013 had
manufacturing facilities in the U.S. at the
end of 2013, compared to one in 2004
• Uncertain demand and growing global
competition have created strain: general
trend in 2013 was towards reduced
workforce or closed facilities
• Only one facility opened in 2013, with a
larger number closed or dormant
• Wind related jobs declined from 80,700
in 2012 to 50,500 in 2013
19
Domestic Manufacturing Capability for Nacelle Assembly, Towers and Blades Is Reasonably Well Balanced Against Near-Term Demand Forecasts
20
After a Number of Years in Decline, Turbine OEM Profitability Rebounded in 2013
21 21
Sharp Decline in Wind-Related Imports and Stable Exports in 2013
• Figure only includes selected, tracked trade categories; misses other wind-
related imports
• See full report for the many assumptions used to generate this figure
* estimated imports
U.S. is a net importer
of wind equipment
Exports of wind-
powered generating
sets increased
modestly in 2013 to
$421 billion; no ability
to track other wind-
specific exports, but
total tower exports
equalled $129 million
22
Tracked Wind Equipment Imports in 2013 Mostly from Asia, the Americas, and Europe
Note: Tracked wind-specific equipment includes: wind-powered generating sets,
towers, hubs and blades, wind generators and parts.
23
Source Markets for Imports Vary Over Time, and By Type of Wind Equipment
• Considering total 2013 imports in these
selected trade categories: 45% from
Asia, 38% Americas, 16% from Europe
• Majority of wind-powered generating
sets from home countries of OEMs, but
share from Europe in recent decline
• Majority of tower imports from Asia
(less from North America), but tariff
measures largely stopped imports from
China and Vietnam in 2013
• Most imports of blades & hubs from
Brazil and China in 2013
• Globally diverse sourcing strategy for
generators & parts, with increase from
Asia in 2013
24
Despite Supply Chain Challenges, a Growing Amount of the Equipment Used in U.S. Wind Projects Has Been Sourced Domestically since 2006-07
Because imports occur in untracked trade categories, including many nacelle internals, overall import (domestic) content is higher (lower) than suggested here: in 2012, overall domestic content estimated at ~40%
When presented as a fraction of
equipment-related turbine costs, the
combined import share of tracked
wind equipment (i.e., blades, towers,
generators, gearboxes, and wind-
powered generating sets) has
declined from nearly 80% in 2006-
2007 to ~30% in 2012-2013.
See report for the assumptions used
to generate these figures
Approximate Domestic Content of Major Components in 2012-2013
Generators Towers Blades Wind-Powered Generating Sets
< 10% 50-70% 60-80% > 80% of nacelle assembly
0%
20%
40%
60%
80%
100%
2006-2007 2008-2009 2010-2011 2012-2013
Domestic Wind Equipment and Untracked Imports
Tracked Imports of Wind Equipment
25
The Project Finance Environment Held Steady in 2013
• Notable events included the launch of several renewable energy “yieldcos”
• Tax equity and term debt yields held relatively steady in 2013
• Project sponsors raised $3.1 billion of tax equity and $2.4 billion of debt
0%
2%
4%
6%
8%
10%
12%
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
Tax Equity Yield (after-tax)
15-Year Debt Interest Rate (after-tax)
15-Year Debt Interest Rate (pre-tax)
26
IPPs Own 95% of the New Wind Capacity Installed in 2013
New utility ownership continued to languish for the second year in a row,
at just 4% of the 2013 wind capacity additions
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Other
Publicly Owned Utility (POU)
Investor-Owned Utility (IOU)
Independent Power Producer (IPP)
% o
f C
um
ula
tive In
sta
lled
Cap
acit
y
Other:11 MW (1%)
IPP: 1,030 MW (95%)
IOU:45 MW (4%)
POU:2 MW (0%)
2013 Capacity byOwner Type
27
27
Long-Term Contracted Sales to Utilities Remained the Most Common Off-Take Arrangement, but Merchant Projects Have Regained some Favor, at Least in Texas
28
Technology Trends
29
Turbine Nameplate Capacity, Hub Height, and Rotor Diameter Have All Increased Significantly Over the Long Term
30
Growth in Rotor Diameter Has Outpaced Growth in Nameplate Capacity and Hub Height in Recent Years
Nameplate Capacity
Hub Height
Rotor Diameter
31
Turbines Originally Designed for Lower Wind Speed Sites Have Rapidly Gained Market Share
Specific Power
IEC Class
Specific Power by IEC Class 2 & 3
32
Turbines Originally Designed for Lower Wind Speeds Are Now Regularly Employed in Both Lower and Higher Wind Speed Sites, Whereas Taller Towers Predominate in Lower Wind Speed Sites
By Region By Wind Resource Quality
33
Performance Trends
34
Trends in Sample-Wide Capacity Factors Have Been Impacted by Curtailment and Inter-Year Wind Resource Variability
The wind resource index is compiled from NextEra Energy Resources reports. The pre-2007 portion of the index is adjusted to
approximate the conversion from wind speed to generation (this adjustment is unnecessary starting in 2007).
0.00
0.15
0.30
0.45
0.60
0.75
0.90
1.05
1.20
0%
5%
10%
15%
20%
25%
30%
35%
40%
200010
591
200130
943
200273
2,682
200384
3,128
2004106
4,500
2005129
5,142
2006153
7,967
2007196
9,951
2008240
14,926
2009339
23,617
2010452
33,381
2011516
38,562
2012601
44,599
2013582
57,157
Lon
g-T
erm
Win
d R
eso
urce
Ind
ex
Sa
mp
le-W
ide
Ca
pa
city
Fa
cto
r
Capacity Factor Based on Estimated Generation (if no curtailment in subset of regions)
Capacity Factor Based on Actual Generation (with curtailment)
Wind Resource Index (right scale)
# MW:# Projects:
Year:
35
Wind Curtailment Is Substantial, but Has Generally Declined in Recent Years
In areas where curtailment has been particularly
problematic in the past – principally in Texas –
steps taken to address the issue have born fruit
Estimated Wind Curtailment (GWh and % of potential wind generation)
MISO, ERCOT, NYISO, and PJM track both forced and economic curtailment, while BPA, NSP, PSCo, and SPS likely only capture forced curtailment
2007 2008 2009 2010 2011 2012 2013
Electric Reliability Council of Texas
(ERCOT)
109
(1.2%)
1,417
(8.4%)
3,872
(17.1%)
2,067
(7.7%)
2,622
(8.5%)
1,175
(3.8%)
363
(1.2%)
Southwestern Public Service Company
(SPS) N/A
0
(0.0%)
0
(0.0%)
0.9
(0.0%)
0.5
(0.0%) N/A** N/A**
Public Service Company of Colorado
(PSCo) N/A
2
(0.1%)
19
(0.6%)
82
(2.2%)
64
(1.4%)
115(e)
(2.0%)
112(e)
(1.7%)
Northern States Power Company
(NSP) N/A
25
(0.9%)
42
(1.7%)
44
(1.7%)
59
(1.6%)
125
(3.0%)
284
(5.9%)
Midwest Independent System Operator
(MISO), less NSP N/A N/A
250
(2.0%)
780
(4.2%)
792
(3.4%)
724
(2.5%)
1,470
(4.6%)
Bonneville Power Administration
(BPA) N/A N/A N/A
5*
(0.1%)
129*
(1.4%)
71*
(0.7%)
6*
(0.1%)
New York Independent System
Operator (NYISO) N/A N/A N/A N/A N/A
9
(0.3%)
50
(1.4%)
PJM N/A N/A N/A N/A N/A 125
#
(2.0%)#
284
(1.9%)
Total Across These Eight Areas: 109
(1.2%)
1,444
(5.7%)
4,183
(9.7%)
2,978
(4.9%)
3,665
(5.0%)
2,345
(2.6%)
2,569
(2.5%)
36
Even Controlling for These Factors, Average Capacity Factors for Projects Built After 2005 Have Been Stagnant
0%
10%
20%
30%
40%
50%
60%
1998-9925
921
2000-0127
1,765
2002-0338
1,988
2004-0528
3,651
200622
1,739
200738
5,284
200880
8,522
200995
9,426
201048
4,733
201166
5,760
2012115
13,368
Weighted Average (by project vintage)
Individual Project (by project vintage)
20
13
Cap
acit
y Fa
cto
r (b
y p
roje
ct v
inta
ge)
Sample includes 582 projects totaling 57.2 GW
Vintage:# projects:
# MW:
37
Trends Explained by Competing Influence of Lower Specific Power and Build-Out of Lower Quality Wind Resource Sites
All else equal:
• Drop in average specific power will boost capacity factors
• Building projects in lower wind resource sites will hurt capacity factors
200
250
300
350
400
80
85
90
95
100
1998-99 2000-01 2002-03 2004-05 2006 2007 2008 2009 2010 2011 2012 2013
Commercial Operation Date
Average 80m Wind Resource Quality Among Built Projects (left scale)
Average Specific Power Among Built Projects (right scale)
Ind
ex
of
Win
d R
eso
urc
e Q
ua
lity
at
80
m (
19
98-
99
=1
00
)
Ave
rag
e S
pe
cifi
c P
ow
er
(W/m
^2
)
38
Controlling for Wind Resource Quality and Specific Power Demonstrates Impact of Turbine Evolution
Notwithstanding build-out of lower-quality wind resource sites, turbine design changes
are driving capacity factors higher for projects located in given wind resource regimes
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Lower124 projects, 9.1 GW
Medium146 projects, 16.5 GW
Higher196 projects, 23.4 GW
Highest75 projects, 7.3 GW
Wind Resource Quality
Specific Power ≥ 400 (31 projects, 3.0 GW)
Specific Power range of 300-400 (377 projects, 40.0 GW)
Specific Power range of 220-300 (121 projects, 11.6 GW)
Specific Power < 220 (12 projects, 1.7 GW)
Sample includes 541 projects totaling 56.3 GW with a commercial operation date of 1998-2012
We
igh
ted
Ave
rage
Ca
pa
city
Fa
cto
r in
20
13
39
Controlling for Wind Resource Quality and Commercial Operation Date Demonstrates Impact of Turbine Evolution
Notwithstanding build-out of lower-quality wind resource sites, turbine design changes
are driving capacity factors higher for projects located in given wind resource regimes
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1998-99 2000-01 2002-03 2004-05 2006 2007 2008 2009 2010 2011 2012
We
igh
ted
Av
era
ge
20
13
Ca
pa
city
Fa
cto
r
Project Vintage
Highest Higher Medium Lower
40
Regional Variations in Capacity Factors Reflect the Strength of the Wind Resource and Adoption of New Turbine Technology
0%
10%
20%
30%
40%
50%
60%
West29 projects3,665 MW
Northeast14 projects1,053 MW
Great Lakes15 projects1,823 MW
Interior55 projects6,703 MW
Weighted Average (by region)
Weighted Average (total U.S.)
Individual Project (by region)
20
13
Ca
pa
city
Fa
cto
r
Sample includes 113 projects built in 2012 and totaling 13.2 GW
41
Cost Trends
42
Wind Turbine Prices Remained Well Below the Levels Seen Several Years Ago
• Recent turbine orders reportedly in the range of $900-1,300/kW, with more-favorable terms for buyers and improved technology
Figure depicts reported transaction prices from 112 U.S. wind turbine orders totaling 29 GW
43
Reported Installed Project Costs Continued to Trend Lower in 2013
• The limited sample of 2013 projects had an average cost of $1,630/kW,
down substantially from previous years
• Larger sample of under-construction projects average $1,750/kW
0
1,000
2,000
3,000
4,000
5,000
6,000
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
Inst
all
ed
Pro
ject
Co
st (
20
13
$/k
W)
Commercial Operation Date
Individual Project Cost (708 projects totaling 50,210 MW)
Capacity-Weighted Average Project Cost
44
Economies of Scale Evident, Especially at Lower End of Project & Turbine Size Range
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
≤5 MW87 MW
41 projects
5-20 MW155 MW
13 projects
20-50 MW721 MW
20 projects
50-100 MW1,411 MW18 projects
100-200 MW3,860 MW29 projects
>200 MW3,973 MW15 projects
Inst
alle
d Pr
ojec
t Co
st (2
013
$/kW
) Capacity-Weighted Average Project Cost
Individual Project Cost
Sample includes projects built in 2012-2013
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
>0.1 & <1 MW11 MW
10 projects
≥1 & <2 MW4,720 MW62 projects
≥2 & <3 MW4,656 MW53 projects
≥3 MW819 MW
11 projects
Inst
alle
d P
roje
ct C
ost
(20
13 $
/kW
)
Capacity-Weighted Average Project Cost
Individual Project Cost
Sample includes projects built in 2012-2013
Project Size
Turbine Size
45
Some Regional Differences in Average Wind Power Project Costs Are Apparent
Different permitting/development costs may play a role at both ends of spectrum: it’s easier/cheaper to build in the US interior and harder/more expensive along the coasts
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Interior53 projects4,480 MW
Northeast33 projects1,191 MW
Great Lakes23 projects1,534 MW
West26 projects2,982 MW
Southeast1 project19 MW
Inst
alle
d P
roje
ct C
ost
(2
01
3 $
/kW
)
Capacity-Weighted Average Project Cost
Individual Project Cost
Capacity-Weighted Average Cost, Total U.S.
Sample includes projects built in 2012-2013
46
Operations and Maintenance Costs Varied By Project Age and Commercial Operations Date
Capacity-weighted average 2000-13 O&M costs for projects built in the 1980s equal $34/MWh, dropping to $23/MWh for projects built in 1990s, to $10/MWh for projects built in the 2000s, and to $9/MWh for projects built since 2010 Note: Sample is limited, and consists of 152 wind projects totaling 10,679 MW; few projects in sample have complete records of O&M costs from 2000-13; O&M costs reported here DO NOT include all operating costs
0
10
20
30
40
50
60
70
80
90
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Commercial Operation Date
Projects with no 2013 O&M data
Projects with 2013 O&M data
Ave
rage
An
nu
al O
&M
Co
st 2
00
0-2
01
3
(20
13
$/M
Wh
)
47
Operations and Maintenance Costs Varied By Project Age and Commercial Operations Date
Note: Sample size is extremely limited
O&M reported in figure does not include all operating costs: Statements
from public companies with large U.S. wind asset bases report total operating
costs in 2013 for projects built in the 2000s of ~$24/MWh
0
5
10
15
20
25
30
35
40
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Project Age (Number of Years Since Commercial Operation Date)
1998-2004
2005-2008
2009-2012
Commercial Operation Date:
n=
18
Me
dia
n A
nn
ua
l O
&M
Co
st
(20
13
$/M
Wh
)
n=
23
n=
20
n=
9
n=
25
n=
11
n=
5
n=
31
n=
25
n=
23
n=
25
n=
25
n=
8
n=
2n
=4
n=
5
n=
3
n=
29
n=
17
n=
12
n=
5
n=
3
n=
4
n=
4
n=
4
n=
4
48
Wind Power Price Trends
49
Sample of Wind Power Prices
• Berkeley Lab collects data on historical wind power sales prices, and long-term PPA prices
• PPA sample includes 343 contracts totaling 29,632 MW from projects built from 1998-2013, or planned for installation in 2014 or 2015
• Prices reflect the bundled price of electricity and RECs as sold by the project owner under a power purchase agreement
– Dataset excludes merchant plants and projects that sell renewable energy certificates (RECs) separately
– Prices reflect receipt of state and federal incentives (e.g., the PTC or Treasury grant), as well as various local policy and market influences; as a result, prices do not reflect wind energy generation costs
50
Wind PPA Prices Have Reached All-Time Lows
$0
$20
$40
$60
$80
$100
$120
Jan
-96
Jan
-97
Jan
-98
Jan
-99
Jan
-00
Jan
-01
Jan
-02
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Jan
-14
PPA Execution Date
Interior (18,178 MW, 192 contracts)
West (7,124 MW, 72 contracts)
Great Lakes (3,044 MW, 42 contracts)
Northeast (1,018 MW, 25 contracts)
Southeast (268 MW, 6 contracts)
Lev
eli
zed
PP
A P
rice
(2
01
3 $
/MW
h)
75 MW
150 MW 50 MW
51
A Smoother Look at the Time Trend Shows Steep Recent Decline in Pricing; Especially Low Pricing in Interior Region
52
Relative Competitiveness of Wind Improved in 2013: Comparison to Wholesale Prices
• Wholesale price range reflects flat block of power across 23 pricing nodes across the U.S.
• Recent wholesale prices reflect low natural gas prices, driven by weak economy and shale gas
• Price comparison shown here is far from perfect – see full report for caveats
0
10
20
30
40
50
60
70
80
90
100
20039
570
200413
547
200517
1,643
200630
2,311
200726
1,781
200839
3,465
200949
4,048
201048
4,642
201138
3,980
201213
970
201318
2,761
20
13
$/M
Wh
Nationwide Wholesale Power Price Range (by calendar year)
Generation-Weighted Average Levelized Wind PPA Price (by year of PPA execution)
Wind project sample includes projects with PPAs signed from 2003-2013
PPA year:
Contracts:
MW:
53
Comparison Between Wholesale Prices and Wind PPA Prices Varies by Region
Notes: Wind PPAs
included are those
signed from 2011-
2013. Within a
region there are a
range of wholesale
prices because
multiple price hubs
exist in each area;
price comparison
shown here is far
from perfect – see
full report for
caveats Wind PPA prices most competitive with wholesale prices in the
Interior region
0
10
20
30
40
50
60
70
80
90
100
Interior44 projects5,648 MW
Great Lakes11 projects
809 MW
Northeast3 projects210 MW
West11 projects1,044 MW
Total US69 projects7,711 MW
Average 2013 Wholesale Power Price Range
Individual Project Levelized Wind PPA Price
Generation-Weighted Average Levelized Wind PPA Price
Wind project sample includes projects with PPAs signed in 2011-2013
20
13
$/M
Wh
54
Recent Wind Prices Are Hard to Beat: Competitive with Expected Future Cost of Burning Fuel in Natural Gas Plants
0
10
20
30
40
50
60
70
80
90
100
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
20
37
20
38
20
39
20
40
Range of AEO14 gas price projections AEO14 reference case gas price projection Wind 2011 PPA execution (3,980 MW, 38 contracts) Wind 2012 PPA execution (970 MW, 13 contracts) Wind 2013 PPA execution (2,761 MW, 18 contracts)
20
13
$/M
Wh
Price comparison shown here is far from perfect – see full report for caveats
55
Renewable Energy Certificate (REC) Prices Remain High in Northeast
REC prices vary by: market type (compliance vs. voluntary);
geographic region; specific design of state RPS policies
$0
$5
$10
$15
$20
Ja
n-0
5
Ja
n-0
6
Ja
n-0
7
Ja
n-0
8
Ja
n-0
9
Ja
n-1
0
Ja
n-1
1
Ja
n-1
2
Ja
n-1
3
Ja
n-1
4
Low-Price REC Markets
DC Tier 1 MD Tier 1OH Out-of-State PA Tier 1TX Voluntary Wind (National)Voluntary Wind (West)
$0
$20
$40
$60
$80
Ja
n-0
5
Ja
n-0
6
Ja
n-0
7
Ja
n-0
8
Ja
n-0
9
Ja
n-1
0
Ja
n-1
1
Ja
n-1
2
Ja
n-1
3
Ja
n-1
4
High-Price REC Markets
CT Class I DE Class I IL Wind
MA Class I ME New NH Class I
NJ Class I OH In-State RI New
20
13
$/M
Wh
56
Policy and Market Drivers
57
Availability of Federal Incentives for Wind Projects Built in the Near Term Has Helped Restart the Domestic Market, but Policy Uncertainty Persists • Near-term availability of the PTC/ITC for those projects that reached
the “under construction” milestone by the end of 2013 has helped restart the domestic market and should enable solid growth at least through 2015
• Little action in 2013 on what are among the wind industry’s two highest priorities: a longer-term extension of federal tax incentives and passage of a federal renewable or clean energy portfolio standard
• Prospective impacts of more-stringent EPA environmental regulations, including those related to power-sector carbon emissions, may create new markets for wind energy
58
State Policies Help Direct the Location and Amount of Wind Development, but Current Policies Cannot Support Continued Growth at Recent Levels
• 29 states and D.C.
have mandatory
RPS
• State RPS’ can
support ~3-4 GW/yr
of renewable
energy additions on
average through
2025 (less for wind
specifically)
Non-Binding Goal
Source: Berkeley Lab
WI: 10% by 2015
NV: 25% by 2025
TX: 5,880 MW by 2015
PA: 8.5% by 2020
NJ: 22.5% by 2020CT: 23% by 2020
MA: 11.1% by 2009 +1%/yr
ME: 40% by 2017
NM: 20% by 2020 (IOUs)
10% by 2020 (co-ops)
CA: 33% by 2020
MN: 26.5% by 2025
Xcel: 31.5% by 2020
IA: 105 MW by 1999
MD: 20% by 2022
RI: 16% by 2019
HI: 40% by 2030
AZ: 15% by 2025
NY: 30% by 2015
CO: 30% by 2020 (IOUs)
20% by 2020 (co-ops)
10% by 2020 (munis)
MT: 15% by 2015
DE: 25% by 2025
DC: 20% by 2020
WA: 15% by 2020
NH: 24.8% by 2025
OR: 25% by 2025 (large utilities)
5-10% by 2025 (smaller utilities)
NC: 12.5% by 2021 (IOUs)
10% by 2018 (co-ops and munis)
IL: 25% by 2025
Mandatory RPS
VT: 20% by 2017ND: 10% by 2015
VA: 15% by 2025MO: 15% by 2021
OH: 12.5% by 2024
SD: 10% by 2015
UT: 20% by 2025
MI: 10% by 2015
KS: 20% of peak
demand by 2020
OK: 15% by 2015
AK: 50% by 2025
59
Solid Progress on Overcoming Transmission Barriers Continued • 3,500 circuit miles of new transmission built in 2013; completion of the
Competitive Renewable Energy Zones project in Texas
• EEI has identified over 170 transmission projects in development, 76% of which would – at least in part – support the integration of renewable energy
• AWEA has identified 15 near-term transmission projects that – if all were completed – could carry almost 60 GW of additional wind power capacity
• FERC continued to implement
Order 1000, requiring public
utility transmission providers to
improve planning processes
and determine a cost allocation
methodology for new
transmission investments
60
System Operators Are Implementing Methods to Accommodate Increased Penetrations of Wind
Notes: Because methods vary and a consistent set of operational impacts has not been included
in each study, results from the different analyses of integration costs are not fully comparable.
There has been some recent literature questioning the methods used to estimate wind integration
costs and the ability to disentangle those costs explicitly, while also highlighting the fact that other
generating options also impose integration challenges and costs to electricity systems
Integrating wind
energy into
power systems
is manageable,
but not free of
additional costs
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0% 10% 20% 30% 40% 50% 60% 70%
Inte
gra
tion
Co
st ($
/MW
h)
Wind Penetration (Capacity Basis)
APS (2007)
Avista (2007)
BPA (2009) [a]
BPA (2011) [a]
BPA (2013)
CA RPS (2006) [b]
ERCOT (2012)
EWITS (2010)
Idaho Power (2007)
Idaho Power (2012)
MN-MISO (2006) [c]
Nebraska (2010)
NorthWestern (2012)
Pacificorp (2005)
Pacificorp (2007)
PacifiCorp (2010)
PacifiCorp (2012)
Portland GE (2011)
Portland GE (2013)
Puget Sound Energy (2007)
SPP-SERC (2011)
We Energies (2003)
Xcel-MNDOC (2004)
Xcel-PSCo (2006)
Xcel-PSCo (2008)
Xcel-PSCo (2011) [d]
Xcel-UWIG (2003)
61
Future Outlook
62 62
Relatively Strong Wind Power Capacity Additions Anticipated for 2014 and 2015, then Uncertainty in 2016 and Beyond
Forecasts for Annual U.S. Wind Additions (MW)
Source 2014 2015 2016 Notes
Bloomberg NEF (2014c) 6,000 9,000 3,600 Assumes no PTC extension beyond current law
IHS EER (2014) 4,800 7,300 8,400 Assumes one PTC extension for 2016
Navigant (2014) 6,300 6,000 2,800 Presumably assumes no PTC in 2016
MAKE Consulting (2014) 6,400 6,600 5,100 Assumes one PTC extension for 2016
EIA (2014b) 4,400 9,100 na Assumes no PTC extension beyond current law
The upper end of the forecast range for 2014 and for 2015 does not
approach the record build level achieved in 2012
63 63
Current Low Prices for Wind Energy, Future Technological Advancement and New EPA Regulations May Support Higher Growth in Future, but Headwinds Include… • Lack of clarity about fate of federal tax incentives
• Continued low natural gas and wholesale electricity prices
• Modest electricity demand growth
• Limited near-term demand from state RPS policies
• Inadequate transmission infrastructure in some areas
• Growing competition from solar in some regions
64
64
U.S. Is on Early Trajectory that May Lead to 20% Wind; Projections for 2014-2016, However, Fall Short of Annual Growth Envisioned in 2008 20% Wind Report
0
35
70
105
140
175
210
245
280
315
0
2
4
6
8
10
12
14
16
18
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
Deployment Path in 20% Wind Report (annual)
Actual Wind Installations (annual)
Deployment Path in 20% Wind Report (cumulative)
Actual Wind Installations (cumulative)
An
nu
al C
ap
aci
ty (
GW
)
range of annual projections
Cu
mu
lati
ve C
ap
aci
ty (
GW
)
65 65
Conclusions • Annual wind additions were modest in 2013, but signals point to more-
robust growth in 2014/15
• Notwithstanding 2013, wind has been a significant source of new
generation in the U.S. since 2007
• Supply chain has been under duress, but domestic manufacturing
content for nacelle assembly, blades, and towers is strong
• Turbine scaling is boosting expected wind project performance, while
the installed cost of wind is on the decline
• Trends are enabling very aggressive wind power pricing and solid
economics in many regions despite low natural gas prices
• Growth after 2015 remains uncertain, dictated in part by future natural
gas prices, fossil plant retirements, and policy decisions, though
technological advancements and recent declines in the price of wind
energy have boosted future growth prospects
66
For More Information... See full report for additional findings, a discussion of the sources of data used, etc.
• http://energy.gov/eere/wind/wind-program
To contact the primary authors • Ryan Wiser, Lawrence Berkeley National Laboratory
510-486-5474, [email protected]
• Mark Bolinger, Lawrence Berkeley National Laboratory 603-795-4937, [email protected]
Berkeley Lab’s contributions to this report were funded by the Wind & Water Power Technologies Office, Office of Energy Efficiency and Renewable Energy of the U.S. Department of Energy under Contract No. DE-AC02-05CH11231. The authors are solely responsible for any omissions or errors contained herein.