Wind power is becoming a mainstream energy source that U.S. utilities are tapping into nationwide as a means of adding clean, domestically sourced energy to balance their generating portfolios. To identify where wind will take us, POWER’s senior editor talked to experts from diverse industry stakeholders about current and future developments.
From trends in regulations to technical innovations, wind energy is blowing in some new directions in the U.S. In order to assess the complexity of those changes, in October, POWER interviewed folks with a variety of viewpoints: representatives from the leading wind energy trade association, a U.S. wind energy technology manufacturer, a large consulting firm, and two national law firms.
Current wind speed
As of mid-August 2008, the U.S. had 20,152 MW of wind power generating capacity operating, Jeff Anthony, the American Wind Energy Association’s (AWEA) manager of utility programs and policy, told POWER. That accounts for about 1.5% of U.S. supply on an energy basis, but wind projects made up more than one-third of all the new generation capacity added in the U.S. in 2007, second only to natural gas.
According to Anthony, a good source for information on other generating technologies is the Electricity InfoCard kept by the U.S. Department of Energy’s (DOE’s) Energy Information Administration. It shows that about 50% of U.S. electricity is generated from coal, 20% from nuclear, about 20% from natural gas, 6% from hydropower, 3% from petroleum, and the remainder from renewables (Figure 1).
1. Turn, turn, turn. This 1.5-MW wind turbine is one of more than 9,000 GE Energy wind turbines in use around the world. Courtesy: GE Energy
"Wind power is already positioned as a mainstream energy resource in the U.S., with the industry experiencing 45% growth in 2007 and on track for a similar growth rate this year," he said. "At the end of the second quarter of 2008, 2,725 MW of new wind capacity had been installed. AWEA expects a total of about 7,500 MW to be installed before the end of the year."
Factors in the industry’s history-making growth, according to Anthony, include the following:
Wind technology has matured and steadily improved the performance and productivity of individual turbines.
Fuel prices have risen sharply over the past five years, making wind energy even more attractive as a resource.
Consumer demand for clean energy resources is growing, along with concerns about climate change, and utilities are looking to wind and other renewables as part of the energy solution in our carbon-constrained economy.
The domestic supply chain for wind is expanding, with new manufacturing capability and new manufacturing jobs adding value to the U.S. economy, while reducing transportation costs associated with wind components.
Edward C. Lowe, GE Energy’s general manager of renewable energy and gasification market development, shared his company’s views concerning wind energy’s ability to compete economically with other forms of energy that generate electricity.
"At approximately $0.08 per kilowatt-hour, wind is currently in the range of being cost competitive with traditional fuel sources — such as coal and natural gas," he said. "Due to technology advancements, the cost of electricity generated by wind power has decreased by about 80% over the last 20 years. Advancing wind technology will be the key to keeping this moving in the right direction."
When interviewed by POWER about this topic, Todd Bartholf, director of renewable energy at the U.S. engineering firm CH2M HILL, pointed to the many studies that have looked at costs. "We are using a conservative figure of $0.05 to $0.06 per kWh, given commodity price increases across the board over the past couple of years," he said. "Given the likelihood of some form of carbon tax within the next couple of years, we think that natural gas at a similar price point is the real benchmark going forward."
Anthony said that wind energy is already competitive on a cost basis with all forms of generation. And it is by far the lowest-cost zero-emissions power technology available today. Although older power plants, such as fully depreciated coal or nuclear power plants may produce electricity at cheaper prices than new wind energy projects, wind energy is already cost-competitive and provides a low-cost electricity source for many utilities that have already embraced this clean form of electricity generation.
"Costs for all sources of new generation are on the rise due to a number of factors," he said. "The cost of raw materials like copper and steel has risen dramatically, the cost of transporting materials and large equipment has increased (primarily due to the rise in oil prices), and labor costs have increased as demand for skilled workers is straining the labor force."
According to Anthony, a recent cost comparison published in June 2008 by the U.S. Federal Energy Regulatory Commission’s (FERC) Office of Enforcement shows the following estimates of current capital costs for various energy resources:
Wind: $1,500 to $2,500/kW
Nuclear: $4,500 to $7,500/kW
Conventional coal: $1,800 to $4,000/kW
Integrated gasification combined-cycle (IGCC) coal: $2,800 to $5,800/kW
Gas combined cycle: $800 to $1,500/kW
Gas combustion turbine: $500 to $1,000/kW