Wind Energy UpdateWind Energy Update

Larry Flowers Larry Flowers National Wind Technology Center, NRELNational Wind Technology Center, NREL

Nebraska - November, 2009Nebraska - November, 2009

As of end of Sept 2009, 31,109 MW of wind installed in 36 states

> 1 GW100 MW - 1 GW< 100 MW

Installed Wind Capacity Installed Wind Capacity through end 3Q09through end 3Q09

Wind Industry 3Q 2009Wind Industry 3Q 2009W

ind

MW

In

stal

led

Total Installation in 3Q 2009:1,649 MW

Total Installation in 2009:5,800 MW

Total U.S. Installation through 3Q 2009:

31,100 MW

Geographic Spread of Wind ProjectsGeographic Spread of Wind Projectsin the United States Is Reasonably Broadin the United States Is Reasonably Broad

Texas Easily Led Other StatesTexas Easily Led Other Statesin Both Annual and Cumulative Capacityin Both Annual and Cumulative Capacity

• 13 states had >500 MW of wind capacity at the end of 2008 (7 had >1000 MW, 3 had >2500 MW)

• 2 states (IA and MN) have in-state wind generation that exceeds 10% of total in-state generation (6 other states exceed 5%)

Annual Capacity (2008, MW)

Cumulative Capacity (end of 2008, MW)

Estimated Percentage of In-State Generation

Texas 2,671 Texas 7,118 Iowa 13.3% Iowa 1,600 Iowa 2,791 Minnesota 10.4% Minnesota 456 California 2,517 South Dakota 8.8% Kansas 450 Minnesota 1,753 North Dakota 7.1% New York 407 Washington 1,447 Kansas 6.7% Wyoming 388 Colorado 1,068 Colorado 6.6% North Dakota 370 Oregon 1,067 Oregon 5.4% Wisconsin 342 Illinois 915 Texas 5.3% Washington 284 New York 832 New Mexico 4.5% West Virginia 264 Oklahoma 831 Wyoming 4.1% Illinois 216 Kansas 815 Washington 3.9% Oregon 185 North Dakota 714 Oklahoma 3.7% Oklahoma 142 Wyoming 676 Montana 3.4% Indiana 131 New Mexico 497 California 3.1% Michigan 127 Wisconsin 395 Hawaii 2.2% Montana 125 Pennsylvania 361 Idaho 1.6% Missouri 106 West Virginia 330 New York 1.4% South Dakota 89 Montana 272 Illinois 1.4% California 89 South Dakota 187 Wisconsin 1.3% Pennsylvania 67 Missouri 163 West Virginia 0.9% Rest of U.S. 52 Rest of U.S. 622 Rest of U.S. 0.2%

TOTAL 8,558 TOTAL 25,369 TOTAL 1.8% Source: AWEA project database, EIA, Berkeley Lab estimates

Wind Now >20% of Some Utilities’ SalesWind Now >20% of Some Utilities’ Sales

See full report for the many assumptions used to generate the data in this table

Total Wind Capacity (end of 2008, MW)

Estimated Percentage of Retail Sales (for utilities with > 100 MW of wind)

Xcel Energy 2,906 Minnkota Power Cooperative 22.6% MidAmerican Energy 2,363 Empire District Electric Company 20.7% Southern California Edison 1,137 Otter Tail Power 14.9% Pacific Gas & Electric 981 Southern Minn. Muni. Power Authority 13.0% Luminant 913 Austin Energy 11.7% City Public Service of San Antonio 502 Xcel Energy 10.7% American Electric Power 468 MSR Public Power Agency 9.3% Alliant Energy 446 Great River Energy 9.1% Austin Energy 439 City Public Service of San Antonio 8.2% Puget Sound Energy 435 MidAmerican Energy 8.1% Exelon Energy 351 Public Service New Mexico 6.2% Great River Energy 319 Luminant 5.6% Empire District Electric Company 255 Alliant Energy 5.4% First Energy 244 Puget Sound Energy 5.3% San Diego Gas & Electric 239 Seattle City Light 5.3% Portland General Electric 225 Northwestern Energy 5.0% Public Service New Mexico 204 Minnesota Power 4.6% MSR Public Power Agency 200 Aquila 3.9% Reliant Energy 199 Portland General Electric 3.3% Minnkota Power Cooperative 193 Southern California Edison 3.1% Source: AWEA, EIA, Berkeley Lab estimates

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

Den

mar

k

Spa

in

Por

tuga

l

Irel

and

Ger

man

y

Gre

ece

Net

herla

nds

Indi

a

Aus

tria UK

Italy

U.S

.

Fra

nce

Aus

tral

ia

Sw

eden

Bra

zil

Tur

key

Can

ada

Chi

na

Japa

n

TO

TA

L

Approximate Wind Penetration, end of 2008

Approximate Wind Penetration, end of 2007

Approximate Wind Penetration, end of 2006

Pro

ject

ed W

ind

Gen

erat

ion

as a

Pro

port

ion

of

Ele

ctric

ity C

onsu

mpt

ion

U.S Lagging Other Countries in WindU.S Lagging Other Countries in WindAs a Percentage of Electricity ConsumptionAs a Percentage of Electricity Consumption

Note: Figure only includes the 20 countries with the most installed wind capacity at the end of 2008

Wind Is a Major Source of New GenerationWind Is a Major Source of New GenerationCapacity Additions: Wind Contributed 42% Capacity Additions: Wind Contributed 42%

of New Additions in the US in 2008of New Additions in the US in 2008

• Wind was the 2nd-largest resource added for the 4th-straight year

0

10

20

30

40

50

60

70

2000 2001 2002 2003 2004 2005 2006 2007 2008

Ann

ual C

apac

ity A

dditi

ons

(GW

)

Other non-renewable

Coal

Gas (non-CCGT)

Gas (CCGT)

Other renewable

Wind0% wind

42% wind

35% wind18% wind

12% wind

2% wind

3% wind

1% wind

4% wind

Nearly 300 GW of Wind inNearly 300 GW of Wind inTransmission Interconnection QueuesTransmission Interconnection Queues

• MISO (64 GW), ERCOT (52 GW), SPP (48), and PJM (43 GW) account for >70% of total wind in queues

• Not all of this capacity will be built….

0

50

100

150

200

250

300

Wind Natural Gas Coal Nuclear Solar Other

Entered Queue in 2008 Total in Queue at end of 2008

Nam

epla

te C

apac

ity (

GW

)

Twice as much wind as next-largest resource (natural gas) in queues

Wind Power in Queues (MW)Wind Power in Queues (MW)

Iowa14,569

Minnesota20,011

New Mexico14,136

North Dakota11,493

Penn.3,391

South Dakota30,112

Oklahoma14,677

Illinois16,284

Ohio3,683

Kansas13,191

Wisconsin908

Michigan2,518

WV1,045

New York8,000

VT155

Total 311,155 MW

MA492

Montana2,327

NJ1416

Under 1000 MW

1,000 MW-8,000 MW

Over 8,000 MW

Missouri2,050

IN8,426

Maine1,398

NH 396

RI347

DE450

MD810

VA820

Arkansas210

Texas63,504

Arizona7,268

California18,629

Colorado16,602

Idaho446

Nebraska3,726

Nevada3,913

Oregon9,361

Utah1,052

Washington5,831

Wyoming7,870

Source: AWEA

Drivers for Wind PowerDrivers for Wind Power

• Declining Wind Costs• Fuel Price Uncertainty• Federal and State

Policies• Economic Development• Environment/Water• Public Support• Green Power• Energy Security• Carbon Risk

As a Result of Foregoing Trends,Wind Prices Have Been Rising Since 2002-03…

• Wind power prices bottomed out with projects built in 2002-03• Projects built in 2008 are ~$15-20/MWh higher on average

2008 Wind Market Report; LBL

Wind Has Been Competitive withWind Has Been Competitive withWholesale Power Prices in Recent YearsWholesale Power Prices in Recent Years

• Wholesale price range reflects flat block of power across 23 pricing nodes

• Wind power prices include sample of projects built from 1998-2008

0

10

20

30

40

50

60

70

80

90

2003 2004 2005 2006 2007 2008

49 projects 62 projects 80 projects 98 projects 117 projects 145 projects

2,268 MW 3,069 MW 4,083 MW 5,165 MW 7,654 MW 9,873 MW

2008

$/M

Wh

Nationwide Wholesale Power Price Range (for a flat block of power)

Cumulative Capacity-Weighted Average Wind Power Price (with 25% and 75% quartiles)

Wind project sample includes projects built from 1998-2008

Even Among More-Recent Projects, WindEven Among More-Recent Projects, WindWas Competitive in Most Regions in 2008Was Competitive in Most Regions in 2008

Note: Within a region there are a range of wholesale power prices because multiple wholesale price hubs exist in each area (see earlier map)

0

10

20

30

40

50

60

70

80

90

Texas Heartland Mountain Northwest Great Lakes California East New England Total US

2 projects 28 projects 10 projects 5 projects 6 projects 3 projects 4 projects 2 projects 60 projects

241 MW 2,133 MW 1,115 MW 831 MW 713 MW 233 MW 170 MW 29 MW 5,465 MW

Average 2008 Wholesale Power Price Range (by region)

2008 Capacity-Weighted Average Wind Power Price (by region) Individual Project 2008 Wind Power Price (by region)

Wind project sample includes projects built from 2006-2008

2008

$/M

Wh

Comparative Generation Costs

Source: LBL

Soaring Demand Spurs Expansion of U.S. Wind Turbine Manufacturing

COCO22 prices significantly prices significantly

increase the cost of coalincrease the cost of coal

Levelized Cost of Electricity (2010) vs. CO2 Price

50

60

70

80

90

100

110

120

130

140

0 10 20 30 40 50

Carbon Price ($/ton CO2)

20

06

$/M

Wh

Coal PC

Coal IGCC

Coal IGCC w/CCS

Gas CC

Nuclear

Wind Class 6

Wind Class 4

Wind Offshore Class 6

Economic Development OpportunitiesEconomic Development Opportunities

• Land Lease Payments: 3-5% of gross revenue $3000-4000/MW/year

• Local property tax revenue: 100 MW often brings in on the order of $500K-$1 million/yr

• 80-100 jobs/ 100 MW during construction• 6-8 permanent O&M jobs per 100 MW• Local construction and service industry:

Foundations, roads-- often done locally• Investment as Equity Owners: production

tax credit, accelerated depreciation, project revenues

• Manufacturing and Assembly plants expanding in U.S.-- single most significant economic development opportunity

19

On-site & Project Development Labor

Construction

Management and support

Earth moving, cement pouringTruck drivers, crane operators

20

Off-site and supply chain jobs, services, materials

Steel mill jobs, parts, servicesPhotos: E.C.Levy, Inc, Detroit, MI

Financing, banking, accountingEquipment manufacturing and sales

Property taxes

UtilitiesBlade and tower manufacturers

21

Induced jobs, services, materialsMoney spent on local area goods and services from increased

revenue: sandwich shops, child care, grocery stores, clothing, other retail, public transit, new cars, restaurants, medical services

22

Landowner Revenue:

Project Development & Onsite Labor Impacts

Local Revenue, Turbine, & Supply Chain Impacts

Induced Impacts

Local Property Taxes:

Construction Phase:

Operational Phase:

Construction Phase: Construction Phase:

Operational Phase: Operational Phase:

Jobs and Economic Impacts from the JEDI Model

Construction Phase = 1-2 yearsOperational Phase = 20+ years

JEDI Model Version W1.09.03e

Total economic benefit:New local jobs during construction:

New local long-term jobs:

1,000 MW of New Wind Power in Nebraska

• 87 new jobs

• $3.9 million/year

• 500 new jobs

• 51 new jobs

• $3 million/year• 3,551 new jobs • 1,388 new jobs

• 63 new jobs• $33.9 million to local economies

• $2.8 M/year to local economies

• $14.5 million/year to local economies

• $410.5 million to local economies

• $138.3 million to local economies

• $6.3 million/year to local economies

22

$1.05 billion

5,439

201

Renewable Portfolio Standards

State renewable portfolio standard

State renewable portfolio goal

www.dsireusa.org / August 2009

Solar water heating eligible *† Extra credit for solar or customer-sited renewables

Includes separate tier of non-renewable alternative resources

WA: 15% by 2020*

CA: 20% by 2010

☼ NV: 25% by 2025*

☼ AZ: 15% by 2025

☼ NM: 20% by 2020 (IOUs)

10% by 2020 (co-ops)

HI: 40% by 2030

☼ Minimum solar or customer-sited requirement

TX: 5,880 MW by 2015

UT: 20% by 2025*

☼ CO: 20% by 2020 (IOUs)

10% by 2020 (co-ops & large munis)*

MT: 15% by 2015

ND: 10% by 2015

SD: 10% by 2015

IA: 105 MW

MN: 25% by 2025(Xcel: 30% by 2020)

☼ MO: 15% by 2021

IL: 25% by 2025

WI: Varies by utility;

10% by 2015 goal

MI: 10% + 1,100 MW by 2015*

☼ OH: 25% by 2025†

ME: 30% by 2000New RE: 10% by 2017

☼ NH: 23.8% by 2025☼ MA: 15% by

2020+ 1% annual increase(Class I Renewables)RI: 16% by 2020

CT: 23% by 2020

☼ NY: 24% by 2013

☼ NJ: 22.5% by 2021

☼ PA: 18% by 2020†

☼ MD: 20% by 2022

☼ DE: 20% by 2019*

☼ DC: 20% by 2020

VA: 15% by 2025*

☼ NC: 12.5% by 2021 (IOUs)

10% by 2018 (co-ops & munis)

VT: (1) RE meets any increase in retail sales by

2012; (2) 20% RE & CHP by 2017

29 states & DC

have an RPS5 states have goals

KS: 20% by 2020

☼ OR: 25% by 2025 (large utilities)*

5% - 10% by 2025 (smaller utilities)

Policy Is Now More Favorable to WindPolicy Is Now More Favorable to WindThan At Any Other Time in the Past DecadeThan At Any Other Time in the Past Decade

• ARRA 2009 established a number of federal policies to support wind

• Federal PTC currently in place through 2012 (longest extension in history)

• Wind projects can elect a 30% ITC or a 30% cash grant in lieu of the PTC

• Subsidized financing double-dipping penalty removed for ITC / cash grant

• New allocations of Clean Renewable Energy Bonds

• Expansion and enhancement of Federal loan guarantee program

• Increased R&D funding

• Four new state RPS policies (MI, MO, OH, KS), and many revisions to existing state RPS policies (total is now 29 states plus Washington, D.C.)

• State renewable funds, tax incentives, utility planning, green power, and growing interest in carbon regulation all also played a role in 2008

• Efforts to pass an RPS and carbon regulation at the Federal level continue

Environmental BenefitsEnvironmental Benefits

• No SOx or NOx

• No particulates

• No mercury

• No CO2

• No water

Key Issues for Wind Power Key Issues for Wind Power

• Financial markets • Policy Uncertainty• Supply chain/workforce• Siting and Permitting: avian,

noise, visual, federal land

* Transmission: FERC rules, tariffs, new lines, PMA’s

• Operational impacts: variability, ancillary services, forecasting, cost allocation

• Accounting for non-monetary value: green power, no fuel price risk, reduced emissions and water use

Nebraska Wind Resources

“The future ain’t what it used to be.”

- Yogi Berra

- 200 400 600 800 1,0000

20

40

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100

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140

Quantity Available, GW

Lev

eliz

ed C

ost

of

En

erg

y, $

/MW

h

Onshore

Class 6

Class 4

Class 7

Class 5

Class 3

Offshore

Class 6

Class 4

Class 7

Class 5

Class 3

10% Available 10% Available

TransmissionTransmission

2010 Costs w/ PTC, $1,600/MW-mile, w/o Integration costs

The black open square in the center of a state representsthe land area needed for a sing le wind farm to produce thepro jected installed capacity in that state. The brown squarerepresents the actual land area that would be dedicatedto the wind turbines (2% of the b lack open square).

W ind CapacityTotal Installed (2030)

(G W )0.0 - 0.1

0.1 - 1

1 - 5

5 - 10

> 10

Includes offshore wind.

46 States Would Have Substantial Wind Development by 2030

20% Wind Scenario 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

U.S. electrical energy mix

0%

20%

40%

60%

80%

100%

No New Wind 20% Wind

Natural GasCoalNuclear

Hydro

WindSource *: Hand et al., 2008

32

Landowner Revenue:

Project Development & Onsite Labor Impacts

Local Revenue, Turbine, & Supply Chain Impacts

Induced Impacts

Local Property Taxes:

Construction Phase:

Operational Phase:

Construction Phase: Construction Phase:

Operational Phase: Operational Phase:

National (U.S.) Economic Impacts

Construction Phase = 1-2 yearsOperational Phase = 20+ years

JEDI Model Version W1.09.03e

Total economic benefit:New local jobs during construction:

New local long-term jobs:

Cumulative Impacts from 2007-2030

• 1.3 M FTE jobs

• $1,877 million

• 834,072 FTE jobs

• 366,441 FTE jobs

• $783 million• 2.63 M FTE jobs • 2.75 M FTE jobs

• 1.64 M FTE jobs• $65 billion to the US economy

• $17 B to the US economy

• $207 billion to the US economy

• $526 billion to the US economy

• $353 billion to the US economy

• $192 billion to the US economy

32

$1.36 trillion

6.2 M FTE

3.3 M FTE

From the 20% Scenario – 300 GW new Onshore and Offshore Development

Construction Phase:• 13,100 new jobs• $1.2 B to local

economiesOperational Phase:• 1,500 local jobs• $145 M/yr to local

economies

Wind energy’s economic “ripple effect”

Construction Phase = 1-2 yearsOperational Phase = 20+ years

Total economic benefit = $8.9 B

New local jobs during construction = 26,000

New local long-term jobs = 3,600

Indirect & Induced Impacts

Totals (construction + 20yrs)

Nebraska – Economic Impacts From the 20% Scenario

7,880 MW new development

Direct Impacts

Payments to Landowners: • $20 Million/yr Local Property Tax Revenue:• $30 Million/yrConstruction Phase:• 12,900 new jobs• $1.5 B to local economiesOperational Phase:• 2,000 new long-term jobs• $165 M/yr to local economies

All jobs rounded to the nearest hundred jobs; Millions of dollars greater than 10 million are rounded to the nearest five million

CO2 Emissions from the Electricity SectorCO2 Emissions from the Electricity Sector

02006 2010 2014 2018 2022 2026 2030

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

No New Wind Scenario CO2 emissions 20% Wind Scenario CO2 emissionsUSCAP path to 80% below today’s levels by 2050

CO

2E

mis

sion

s in

the

Ele

ctri

c S

ecto

r

(mill

ion

met

ric to

ns)

02006 2010 2014 2018 2022 2026 2030

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

No New Wind Scenario CO2 emissions 20% Wind Scenario CO2 emissionsUSCAP path to 80% below today’s levels by 2050

02006 2010 2014 2018 2022 2026 2030

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

No New Wind Scenario CO2 emissions 20% Wind Scenario CO2 emissionsUSCAP path to 80% below today’s levels by 2050

CO

2E

mis

sion

s in

the

Ele

ctri

c S

ecto

r

(mill

ion

met

ric to

ns)

Cumulative Water Savings from 20% Scenario

Reduces water consumption of 4 trillion gallons through 2030 (represents a reduction in electric sector water consumption by

17% in 2030)

U.S. Remains on Early Track To Meet 20%U.S. Remains on Early Track To Meet 20%of Nation’s Electricity with Wind by 2030 of Nation’s Electricity with Wind by 2030

But ramping up to ~16 GW/year and maintaining that pace for a decade is an enormous challenge, requiring proactive policy, substantial transmission expansion, mitigation of output variability, and eased siting and permitting processes

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4

6

8

10

12

14

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18

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2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

0

35

70

105

140

175

210

245

280

315

Deployment Path in 20% Wind Report (annual)

Actual Wind Installations (annual)

Deployment Path in 20% Wind Report (cumulative)

Ann

ual C

apac

ity (

GW

)

annual projections (EER)

Cum

ulat

ive

Cap

acity

(G

W)

Big Twelve StandingsBig Twelve Standings

Football

TX 10 - 6

OK 7 - 3

KS 5 - 6

IA 2 - 4

NE 3 - 2

CO 2 - 3

MO 1 - 4

WindResourcesGW (NR)

1360 (1)

401 (9)

914 (2)

482 (7)

889 (3)

267 (12)

79 (14)

2009MW(NR)

8797 (1)

865 (12)

1,014(10

3,063 (2)

153 (22)

1,242 (9)

309 (19)

15,433

20%GW

(NR)

20.5

38.5

7.2

19.9

7.9

2.5

0.1

96.6

38

Carpe Ventem

www.windpoweringamerica.gov