Wind Energy Technology:

A Global Opportunity for our Environment, Economic

Development and Energy Security

Randall SwisherExecutive Director (Retired)

American Wind Energy Association

Presentation Overview

● Electric Industry Basics

● Wind Technology Basics

● A Brief History

● Wind’s Current Market Status

● What is Wind’s Potential?

● What are the Challenges?

Electric Electric Industry Industry BasicsBasics

Sources of U.S. Electricity2008 Share of Net Generation by Energy Source*

● Coal: 48.5%● Natural Gas: 21.3%● Nuclear: 19.7%● Hydropower: 6.1%● Wind: 1.4%● Petroleum: 1.1%● Other: 1.9%

*Source: U.S. Energy Information Administration

What is the common characteristic of these generating sources?

What role does each play?Regional differences?Operational characteristics?

Power System Operations

• Supply and demand must match at all times• Demand and supply are both variable and uncertain. • Grid operators hold generation in reserve:

• Regulation reserves • Load-following reserves • Contingency reserves

• Reserves are shared for all sources of variability

Wind Wind Technology Technology BasicsBasics

What’s Inside a Nacelle?

Advances in Power Electronics

● Modern wind turbines are equipped with power electronics.

● They process over 200 types of data, from wind speeds and oil temperature to voltage dips on the grid.

● An entire wind farm can be monitored from a laptop.

Bottom Line: 1981-2000 = 124x the energy, 20x the cost;

1981 1985 1990 1996 1999 2000 Rotor (Meter) 10 17 27 40 50 71 KW 25 100 225 550 750 1,650 Total Cost $65 $165 $300 $580 $730 $1,300 Cost/kW $2,600 $1,650 $1,333 $1,050 $950 $790 MWh 45 220 550 1,480 2,200 5,600

20 Years of Wind Technology Development

Economies of Scale Drive Down Wind Cost

Today’s Turbines are Big!

● Hub Height:

60-100 meters

(197-328 feet)● Rotor Diameter:

70-100 meters

(230-328 feet)● Total Weight of

Turbine:

230 - 340 tons

59.6

80

How big is a V80 2.0 MW

This picture shows how big a V80 2.0 MW is compared with a Boeing 747 JUMBO JET

How much Electricity does a 1.5 MW Wind Turbine Produce?

● A 1.5 Megawatt (MW) wind turbine should generate about 5 million kWh annually.*

● Using national averages, that is equivalent to the electric needs of about 500 homes.

*35% capacity factor

Power in the Wind (W/m2)

Density = P/(RxT) P - pressure (Pa) R - specific gas constant (287 J/kgK) T - air temperature (K)

= 1/2 x air density x swept rotor area x (wind speed)3

A V3

Area = r2Instantaneous Speed

(not mean speed)

kg/m3 m2 m/s

Bottom Line: 12 mph wind has 70% more power than 10 mph wind

The Wind Industry: The Wind Industry: A Brief HistoryA Brief History

In the 1980s, the U.S. led the World in Wind Technology

● The first successful windfarms were established in 1981 in California

● Many U.S. turbine manufacturers were established in the early 80s

● By 1989, the U.S. was home to 90% of the world’s installed wind capacity – almost all in California

But We Turned our Backs on the Opportunity

● The DOE Wind R&D budget was cut 90% through the 1980s

● The wind investment tax credit was abruptly ended in 1986• Most U.S. turbine

manufacturers went out of business

• No new U.S. wind market emerged until 1997 – Iowa and Minnesota

Europe Took the Lead in the 1990s

● Strong market incentives in Denmark, Germany and Spain led to a thriving turbine manufacturing industry• Germany was the largest single market until

2008• This European leadership made possible

wind’s current competitiveness

Today, the Global Industry has Three Key Markets

● Europe – 66,000 MW (end of 2008)• Most manufacturers based in Europe

● North America – 27,500 MW• The U.S. is now the largest single market, and

all major global companies want to participate● Asia – 25,000 MW

• Chinese market growing most quickly, and establishing a strong manufacturing base

2009 Market OutlookThe U.S. Wind Market TodayThe U.S. Wind Market Today

U.S. is World Leader in Wind Power

With over 31,OOO MW, the U.S. is now the #1

wind energy producer in the world

U.S. Leads World in Installed Wind Capacity

• The U.S. overtook Germany in 2008 with the most installed wind power capacity

Source: AWEA

5,000 MW

10,000 MW

15,000 MW

20,000 MW

25,000 MW

Annual Additions

Cumulative Capacity

2008 Installed: 8,545 MW2008 Total: 25,400 MW

Record Breaking Installation and Growth

Source: AWEA

Ten yearannualaveragegrowth rate of29%

Percentage of Generation Added by YearWind is #2 source for past four years

• 8,558 MW added in 2008

• 42% of all new generating facilities added in 2008 were wind power plants

U.S. Wind Power Capacity (MW)

Alaska3

California2,517

Colorado1,068

Iowa2,790

Minnesota1,752

New Mexico497

North Dakota

714Oregon1,067

Penn.361

Texas7,116

Wyoming676

Washington1,375

South Dakota

187

Oklahoma708

Illinois915

Ohio7

Kansas815

Wisconsin395

Michigan129

Hawaii63

WV330

New York832

VT 6

Tennessee29

Total 25,170 MW

Nebraska73

MA5

Montana272

Idaho75

NJ8Utah

20

Under 100 MW

100 MW-500 MW

Over 1,000 MW

Missouri163

Indiana131

Maine47

NH 25

RI1

Source: AWEA, January 2009

Market Drivers Contributing to Wind’s Growth

● Economics - Wind competes well in many regions● Federal and State Policies● Wind’s Environmental Benefits● The New Energy Economy - Jobs● Public Support● Other major generation sources constrained

• Coal’s carbon risk• Gas price volatility• Nuclear capital costs/perceived risk

Source: FERC, Increasing Costs in Electric Markets, 2008

Wind Power is Cost-Competitive

Estimated Capital Cost of New Generation

Cost of Energy: Standard & Poor’s, 2007

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

Coal (PC) Coal (PC)w/CCS

Coal(IGCC)

Coal(IGCC)w/CCS

NaturalGas (CC)

NaturalGas (CC)w/ CCS

Nuclear Wind

Co

st o

f E

ne

rgy

($/M

Wh

)

Interconnection Queues Are Cloggedwith Wind Projects: Nearly 300 GW!

0

50

100

150

200

250

300

350

Wind Natural Gas Coal Nuclear Solar Other

Na

me

pla

te C

ap

aci

ty (

GW

) Entered Queue in 2008 Total in Queue at end of 2008

2008 Wind Market Report; LBL

Growing the Growing the Wind Industry:Wind Industry:

What’s the Potential?What’s the Potential?

20% Wind Energy by 2030

The U.S. possesses sufficient and affordable wind resources to obtain at least 20% of its electricity from wind by the year 2030.

U.S. Department of Energy, May 2008

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

Job Projections Under 20% Report

• Over 500,000 total jobs would be supported by the wind industry

Source: U.S. DOE, 20% Wind Energy by 2030

CO2 Reductions From Electricity Sector

Source: U.S. DOE, 20% Wind Energy by 2030

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

Challenges to Challenges to Achieving Achieving

Wind’s Wind’s PotentialPotential

Key Barriers to Achieving 20% Wind

1. Immediate Need to fix the financial system

2. Need for long-term stable federal policy

3. Need for transmission infrastructure

● Need a stable long-term federal policy

• Long-term federal production tax credit (PTC)

• Federal renewable energy standard (RES)

• Climate policy

Lack of Stable Policy Inhibits Investment

Transmission Infrastructure

● The lack of transmission infrastructure is the single greatest long-term strategic constraint facing the wind industry.

● There is a growing recognition of this barrier by policymakers

• Link areas with vast supplies of renewables to areas of high electricity demand green power superhighways

• Improve grid operations

Green Power Superhighways

● Wind is an energy resource, not a capacity resource ● Take the wind when it blows, rely on the utility’s hundreds

of other power plants when it doesn’t● As wind takes a larger role, the electric system will add

more flexible resources . . . • Demand-response• Efficient gas-fired turbines• Incremental hydro• Energy storage

● And it will consolidate control areas and use generating resources more efficiently

● Storage is not necessary to reach 20% wind

What do you do when the wind doesn’t blow?

Strong Winds are on the Horizon

The Future Looks Bright for Wind Power

● For additional information:

www.awea.org

rswisher@awea.org