u.s. wind industry: market & policy...
TRANSCRIPT
U.S. Wind Industry:
Market & Policy UpdateSeptember 15, 2009
Elizabeth Salerno
Director, Industry Data & Analysis
American Wind Energy Association
U.S. Wind Status in 2008
Installed 8,500 MW in 2008, over 5,000 turbines
Average Turbine size of 1.67 MW
Average project size 80 MW
Total installation of 25,400 MW
$17 billion of investment in 2008
50% Growth in 2008
30% Compounded Annual Growth Rate for 5 years
Record Breaking Installation and Growth
5,000 MW
10,000 MW
15,000 MW
20,000 MW
25,000 MW
Annual Additions
Cumulative Capacity
New Energy Capacity in the U.S.
Source: U.S. Department of Energy, 2009
U.S. Wind Project Concentrations
Installed Prior to 2008
Installed in 2008
Source: U.S. Department of Energy, 2009
Wind Industry Employment
• In 2008, US wind industry employed over 85,000 people
• Jobs grew by 35,000 in 2008.
Turbine Manufacturer Locations
NordicFuhrlander
(announced)Suzlon- Blades
Acciona,
Clipper
Siemens - Blades
Gamesa
GE
Energy
GE
Energy
Vestas
DeWind
Nordex
Global Wind
Systems
(announced)
Siemens
(announced)
Wind Manufacturing Facilities
Across the U.S.
Major facilities online prior to 2008
All new online in 2008 – 2Q 2009
Announced facilities
Source: AWEA, Sample of Manufacturing Facilities, August 2009
● 55 Facilities
Opened,
Expanded or
Announced in
2008.
2nd Quarter Market Report
• 1Q 2009: 2,818 MW
• 2Q 2009: 1,249 MW
• >5,500 MW under
construction (not
necessarily all for
this year)
Capacity Additions (1Q 2009)
Capacity Additions (2Q 2009)
Projected Installations
Cumulative Capacity
20% by 2030 Report Card
Annual Market Size
On an annual
basis:
Wind
installations
would have to
increase from
8,500 MW per
year in 2008, to
16,000 MW
per year.
Policy Status & Update
30 States & DC Have RES Policies
State Goal
PA: 18%¹ by 2020
NJ: 22.5% by 2021
CT: 23% by 2020
MA: 4% by 2009 +
1% annual increase
IA: 105 MW
MN: 25% by 2025
(Xcel: 30% by 2020)
TX: 5,880 MW by 2015
AZ: 15% by 2025
CA: 20% by 2010
NV: 20% by 2015
ME: 30% by 2000
10% by 2017 - new RE
State RPS
HI: 20% by 2020
RI: 16% by 2020
CO: 20% by 2020 (IOUs)
10% by 2020 (co-ops & large
munis)
DC: 11% by 2022
NY: 24% by 2013
MT: 15% by 2015
IL: 25% by 2025
VT: RE meets load
growth by 2012
Solar water heating eligible
WA: 15% by 2020
MD: 9.5% in 2022
NH: 23.8% in 2025
VA: 12% by 2022
MO: 15% by 2021
DE: 20% by 2019
NM: 20% by 2020 (IOUs)10% by 2020 (co-ops)
NC: 12.5% by 2021 (IOUs)
10% by 2018 (co-ops & munis)
ND: 10% by 2015
WI: requirement varies by
utility; 10% by 2015 goal
KS: 20% by 2020
OR: 25% by 2025 (large utilities)
5-10% by 2025 (smaller utilities)
SD: 10% by 2015
UT: 20% by 2025
Legislative Priorities
Near-term action – Recovery Act/Stimulus Bill
3-year production tax credit (PTC) extension
Option to choose grant instead of tax credit
Mid-Term Action
National Renewable Electricity Standard
National Transmission Legislation
Long-Term Action:
Effective Carbon Regulation
American Recovery & Reinvestment Act (ARRA)
• PTC extension through 2012
• Temporary ability to claim 30% ITC, and receive
Treasury grant in its place
• Small wind turbines now eligible for full 30% ITC
• New 30% manufacturing tax credit
• New loan guarantee program
• R&D funding
• Transmission funding
Treasury Grant Program
Recipients of First Round of Grant
Source: U.S. Department of Energy, 2009
• Bill passed February, Rules released July, Money
released early September, must start construction
by end of 2010, complete end of 2012
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
An
nu
al C
ap
ac
ity
In
sta
lle
d (
Me
ga
wa
tts
, M
W)
Our Past: The Boom and Bust Cycle
77%
Drop73%
Drop
93%
Drop
Source: AWEA
Policy Timeline for Wind – Looking Ahead
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Bonus
Depreciation
Grant in lieu of ITC-
PTC
PTC for Wind
Proposed RES
National Renewable Energy Legislation
U.S. House of Representatives • Energy & Climate Bill passed full House of
Representatives on June 26 by 219-212 vote
• Includes 20% Renewable Electricity Standard by 2020
U.S. Senate Energy Legislation• Energy bill reported out of energy committee June
17
• Potentially to be combined with climate legislation this fall.
• 15% Renewable Electricity Standard by 2020.
Wind Power in Queues (MW)
Iowa
14,569
Minnesota
20,011
New Mexico
14,136
North
Dakota
11,493
Penn.
3,391
South
Dakota
30,112
Oklahoma
14,677
Illinois
16,284
Ohio
3,683
Kansas
13,191
Wisconsin
908Michigan
2,518
WV
1,045
New York
8,000
VT
155
Total 311,155 MW
MA
492
Montana
2,327
NJ
1416
Under 1000 MW
1,000 MW-8,000
MW
Over 8,000 MW
Missouri
2,050
IN
8,426
Maine
1,398
NH
396
RI
347
DE
450
MD
810
VA
820
Arkansas
210
Texas
63,504
Arizona
7,268
California
18,629
Colorado
16,602
Idaho
446
Nebraska
3,726
Nevada
3,913
Oregon
9,361
Utah
1,052
Washington
5,831
Wyoming
7,870
Near-term Transmission Projects for WindTransmission project
name, locationVoltage (kV) MW of wind expected Year online
Populus-Terminal (ID, UT) Double 345 1,600 2010
Walla Walla-McNary (OR,
WA)235 400 2010
Southwest Intertie (ID, NV) 500 1,850 2011
Northeast Energy Link (ME,
NH, MA)(DC) 320 1,000-2,000 2012
BPA lines from Open Season
(WA, OR)500 2,800 2012
CREZ (TX) 345 9,859 2012-2013
CO-WY intertie (WY) 345 900 2012-2013
CapX (MN, SD, ND) 345 2,275 2012-2014
Tallgrass/Prairie Wind (KS,
OK)765 5,800 2013
Tehachapi (CA) 500 4,500 2013
Pawnee-Smoky Hill upgrade
(CO)345 500 2013
Total ~32,000 MW
Why Focus on Wind Energy in
Comprehensive Climate Legislation?
Rapidly Deployable and
Cost-Effective Today
Create Reductions,
not Delay Reductions
Lowers the Cost of
Compliance
Avoids Locking-in
Future Emissions
Offers Time Buffer for
Emerging Clean Tech
A reduction path of 60 to 80% by 2050
requires at least a 15-20% reduction by 2020.
There is no silver bullet, but using available
renewable technology can reduce marginal
abatement cost.
Reduces the Nation’s future liability of “locking-in”
additional emissions from new emitting generation
and reduces cost/risk of increased carbon liability.
Using available renewable technology allows time
for new low-emitting technologies to develop
and become commercialized.
Renewable energy can create significant emission
reductions today; delaying reductions would have
both environmental and costs consequences.
U.S. Climate Change Activity
H.R. 2454
• 17% Reductions below 1990 levels by 2020,
• 42% Reductions below 1990 levels by 2030,
• 83% Reductions below 1990 levels by 2050
States receive approx 9.5% of allowances to use toward EE/RE
• 20% of Allowances for EE only
• 20% of Allowances for RE only
(deployment & manufacturing)
• 47.5% of Allowances for RE/EE
• 12.5% of Allowance to Localities.
Wind Deployment:
Interplay of Wind, Climate Policy, & RES
● Can we reach emission reduction targets with currently available technology?
● Does deployment of wind reduce the cost of compliance with cap & trade?
● Does carbon price alone adequately deploy currently available clean technology in the power sector?
● If carbon price alone is insufficient, how does the U.S. or any market deploy available clean technology?
Meeting Early Reduction Goals
● American Clean Energy and Security Act of 2009, ACES (Waxman-
Markey Climate Bill) includes a 17% reduction below 1990 levels by
2020, or roughly a reduction of 475 million tons of CO2e by 2020.
Wind alone could meet nearly half
of the power sector reductions
requirements under the proposed
Waxman-Markey climate bill.0
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Reference Case: CO2 Emissions; Power Sector (AEO 2009)
20% Wind Energy by 2030: CO2 Emission Reductions (DOE)
Reduction Path: CO2 Emissions; Power Sector (Waxman-Markey)
Wind Reduces Compliance Cost
15,000 MW of wind (50% of wind
in queue) under cap & trade policy
would:
• Avoid 35 million tons of CO2
• Reduce locational marginal
prices by $5.00 to $5.50 per
MWh, saving up to $4.7 billion.
• Reduce average household
bills by $3.50 to $4.00 per
month.
9,400 MW of wind (additional
wind facilitated by the CREZ)
under cap & trade policy would:
• Avoid 17.6 million tons of
CO2
• Reduce average annual
locational marginal prices,
saving up to $3 billion.
• Reduce average household
bills by roughly $5 per month.
PJM (Mid-Atlantic ISO) January
2009 Study on the Cost of
Climate Legislation
ERCOT, Electric Reliability
Council of Texas, May 2009
Study on the Cost of
Climate Legislation
Does Carbon Price Adequately Deploy?
● Emission reduction regulations will send a market
signal for cleaner energy…
● BUT, such regulations may be too weak, too distant,
and too volatile to cause the necessary paradigm
shift in renewable energy deployment in the near
term when most critical.
Can climate legislation, in isolation,
send an adequate price signal to deploy
available clean technology?
Cap & Trade Legislation, H.R. 2454
Waxman-Markey Bill
● 17% Reductions below 1990 levels by 2020,
● 42% Reductions below 1990 levels by 2030,
● 83% Reductions below 1990 levels by 2050.
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CBO
EPA - IPM
