Wind Tech Advances Quicker Than Fossil Energy Tech

Many fossil energy advocates who ignore the harmful global warming effects of burning oil and natural gas pretend like technological change will allow us to increase our use of these fuels forever. But the reality is that US oil reserves and production have fallen more than 15% and 20%, respectively, since the early 1990s. And at some point within the next decade or so a similar trend will likely constrain the natural gas market even though EIA estimates of its reserves have climbed ~50% since 1993. Over the same time period, the estimate of wind power potential has climbed more than 3.5 times what the Pacific Northwest Laboratory estimated in 1993. This shows that wind technology during the period has advanced much quicker than exploration and production technology for oil and natural gas. A major improvement comes from taller wind turbines today, since wind is stronger at 80 meters than at 50 meters above the ground.

The Biggest Changes

The main sources of growth for US wind power potential came in the Great Plains, which was already known to be the heart of our resource. Texas, long the largest wind power producing state, is now estimated to be the top state for wind potential after passing the Dakotas and Kansas. In fact, it is estimated that Texas can produce from wind 15X the amount of power it consumes from all electric sources today. Another twenty states can also produce so much wind power that they could become major exporters of this electricity to other states around the country. The estimate excluded wind potential in parks, urban areas and over water — so this is a major underestimate once you consider the offshore wind potential we have off the Atlantic and Pacific coasts. Even so, the 37,000 TWh per year (~365 quadrillion Btus) listed in their onshore wind power estimate is more energy than that contained in our oil and natural gas reserves combined.

Solar Energy Potential Even Larger

The estimate of solar energy potential is more than 100X that of wind power, at over 2,000 TW. So, the issue for renewable energy isn’t any lack of supply. The challenge is for us is to continue cost reductions for wind and solar to make them cheaper than their fossil energy competitors. The year 2010 could be a breakthrough period in that regard as prices for wind turbines and solar modules fall toward grid parity.

Renewables Dominance Will Take Over a Decade

Even when wind and solar are more economical, it will take some time for them to grow from their current base of ~2% of US electricity. Manufacturers of solar modules and wind turbines will have to ramp up global production capacity from current levels of ~10 GW and ~40 GW, respectively, to at least 50 GW each before these sources of electricity can take significant market share from natural gas, oil, and coal. And we will need to continue to improve energy storage capabilities and economics along with our development of a smart grid that can adjust to the intermittency of wind and sunshine for this transition to renewables to take place smoothly over the next 10-25 years.

Now we know there is plenty of renewable energy available to keep us warm, lighted, and wired throughout the 21st century once we have moved on from our dependence on fossil fuels. Let’s make 2010 a huge step in this monumental project!

Onwards in the Sustainable Energy Transition-

Dennis Markatos-Soriano

4 GW in First Half of Year a Record

While the second quarter’s growth rate was less than half that of the record first quarter, the two quarters add up to another record — for installed wind capacity in the first half of the year (~4 GW vs. 2.7 GW in H1 2008). And even though we are near the bottom of a deep recession, the second quarter growth of 1.2 GW was equal to Q2 2008. It brings total US wind capacity to a world-leading 29.4 GW.

Major growth occurred in 10 different states across the country. In percentage growth, Missouri led the pack by almost doubling its wind capacity last quarter to over .3 GW (too bad MO Senator Claire McCaskill (D) is slowing the current climate bill that would help the state take further advantage of their wind resources). Pennsylvania and South Dakota also had double digit growth rates at 28% and 21%, respectively. Texas extended its leadership in wind by passing 8 GW, while #2 Iowa passed 3 GW.

My top 10 states list in rough percentage of electricity from wind shifted a little:

1. Iowa (~19% of its electricity from wind)
2. North Dakota (just below 18%)
3. Wyoming (over 15%)
4. Oregon (over 8%)
5. South Dakota (almost 8%, up from a tie for #7)
6. Minnesota (~7.5%, down from #5)
7. Kansas (~7%, down from #6)
8. Texas (almost 7%, up from #9)
9. New Mexico (~6.5%, down from a tie for #7)
10. Colorado (~6%)

Wind capacity can now generate ~1.9% of US electricity demand. Wind may pass 2% by year’s end, further crowding out dirtier coal, oil, and natural gas consumption.

Fewer Wind Farms Under Construction Though

The difference between 2009 and 2008 is the second half of the year. Last July, there were ~9 GW under construction. But this July, the queue is a lower ~5 GW (even though it’s a vast improvement from the smaller 3.4 GW under construction at the end of Q1). As I wrote last week, wind farm construction is expected to pick up tremendously in 2010 to a new record above 10 GW.

Could 2009 Rival 2008?

The second half of 2009 is expected to witness a significantly slower pace of installation than last year (almost 5 GW) on more difficult financing and reduced US electricity demand. But the lower turbine prices and the federal stimulus support emerging in the months ahead may help 2009 get close to last year’s phenomenal growth. AWEA projects annual growth of 6-7 GW (second highest ever), with growth continuing at the second quarter’s rate over the next two quarters. They are probably right, since wind farms are such huge projects and take months to complete. But I would love to be surprised by another record year. And I will keep you abreast of progress here as it is made in the weeks ahead.

Onwards in the Sustainable Energy Transition-

Turbine Prices to Fall, White Hot Growth Rates to Return

Turbine prices have increased since 2001 as demand growth has been through the roof. Turbine prices have actually doubled since 2001 from a low ~75 cents per watt to ~$1.50 per watt in mid-2008. But the deep recession is inducing lower demand in 2009 (down 20-50% from the record high of 8.5 GW hit in 2008). This lower demand has allowed wind turbine supply to catch up, sending prices back toward lows of a few years ago as I mentioned a few weeks back. The grid parity I wrote may be reached by 2012 for solar was reached by wind power years ago (when the federal Production Tax Credit is included). As wind prices get more competitive and financial markets recover, the Energy Information Administration (EIA) predicts that record growth will return to the US market in 2010-12, sending demand to consecutive record highs of 10.4 GW, 11.9 GW, and 13.7 GW!

Another recent DOE report outlines a growth path to 20% of US electricity coming from wind by 2030 that has been far surpassed these past three years and by the EIA projections above. Thus, we may be able to reach 20% wind by 2025 or earlier.

Wind Farm Performance Improving

The capacity factor (percentage of time wind is producing its potential) for wind farms has improved over the years. Back before 1998, the capacity factor was in the low 20% range. Since 2005, the capacity factor has been 35-37%.

What About Solar and Other Renewables?

If wind provides 60% of new electricity demand in 2012, can solar, geothermal, and biomass provide a bulk of the remainder? My current projection is for solar to provide ~10% of EIA’s projected new demand in 2012 (over 2.5 GW). If geothermal and biomass can add a similar chunk together, we’ll only need a couple of new natural gas or coal plants that year (less than 20% of new capacity).

Bottom Line: Wind power has gone through tremendous growth in the US and worldwide. The EIA predict lower turbine prices and healthier financial markets will bring new record growth for the renewable electricity provider – making wind the leading source of new power for America. If we have similar rates of growth for other renewables, our need for new fossil fuel power plants will be miniscule by 2012. Let’s make it happen!

Onwards in the Sustainable Energy Transition-

Denmark offshore, photo by Jim Hodson of Greenpeace

SET’s home state of New York is moving to become a leader in offshore wind power. Both the New York Power Authority (NYPA) and the Long Island Power Authority (LIPA) have offshore wind farms they are pursuing. The NYPA project would be the first major freshwater wind farm in the world. And the LIPA project could end up as the biggest proposed offshore wind farm in the US.

New York Needs to Accelerate its Renewable Deployment

New York has one of the highest renewable shares of electricity at ~21.5%, largely due to the hydroelectric plant at Niagara Falls (only Washington and Oregon currently have higher renewable shares, also mainly due to hydro). New York aims to get 45% of its electricity from renewables by 2015, a goal that will take tremendous deployment to achieve. In fact, renewable capacity of ~10 GW is necessary to reach 45% at current generation levels. Achieving such a high capacity by 2015 would translate into average annual deployment of 1.5 GW.

As I wrote a few weeks ago, NY recently became one of only eight states with over 1 GW of wind power capacity. All of the existing wind capacity in NY and the rest of the country is land-based. Now, state leaders have their sites on offshore wind helping NY reach several GW capacity by 2015.

First Freshwater Wind Farm

NYPA aims to build the first freshwater wind farm in the world. On Earth Day, they announced a Request For Expressions of Interest (RFEI) which will be followed by a Request For Proposals (RFP) from wind developers. Siting and construction will take time, but it’s great the process is in motion. I will share the MW capacity proposed as progress is revealed.

First US Offshore Wind Farm

Europe has had offshore wind farms since the 1990s. LIPA seeks to finally commission the first American one a few miles into the Atlantic Ocean. Initial capacity proposed is 350 MW with potential for a second phase to achieve 700 MW.

Sustainable Energy Transition Takes Time and Effort

Freeing NY from the need to burn coal (~12.5%) and oil (~10%) for electricity is not a quick and easy process. It will take solar and wind deployments more than double recent growth. Its nice to see NYPA and LIPA taking concrete steps to take advantage of the steady, powerful winds offshore.

Here’s to more progress in the months ahead-

Grid Parity by 2011?

Such cost reduction puts them on track to more than achieve their goal of 65 cents per watt by 2012. In fact, if their costs fall 5% per quarter through the rest of 2009 and in 2010, they would reach 65 cents per watt by January 2011. Such a price would probably translate into grid parity in 2011 as long as solar installers can reduce their costs as well.

Profits More Than Triple 1st Quarter 2008

First Solar reported profits of $165 million ($1.99 per share), versus 2008′s $47 million (57 cents per share). First Solar’s stock price has so far shot up 25% on the news to almost $190.

As a low-cost leader, First Solar is doing much better than many of its peers who have falling profits due to the recession.

Bottom Line: First Solar is showing the world that solar can compete even in a low energy price future. A few more quarters like the last one for them, and grid parity will become a reality for solar in many of the world’s electricity markets.

I don’t own any First Solar stock, though I wish I did

Onwards to a climate-friendly energy future-

Extending the US Lead in Wind

The US now has a total wind power capacity of 28.2 GW, enough to provide ~2% of our electricity demand. The growth widens our lead over Germany as the world’s top wind power producer. Another 3.4 GW are under construction for later in the year, so it looks likely 2009 will witness at least the second largest growth after 2008′s record 8.5 GW.

TX Advances and Smaller States Emerge

Texas installed the most new wind, increasing its huge cumulative total to almost 8 GW (more than double 2nd place Iowa). As I wrote over the last several weeks, New York and Kansas joined the 1 GW club as aggregate deployers #7 and #8, with Illinois poised to join this quarter.

The quickest percentage growth was Indiana’s 75% to .531 GW, Maine’s 55% to .104 GW, Nebraska’s 53% to .153 GW, Idaho’s 49% to .147 GW, and New York’s 34% to 1.261 GW.

Top Wind States by Percentage Shift

The states with the top wind share capability in their electricity mix shuffled a bit as their percentages grew [these data was revised Thursday, April 30th to be conservative].

1. Iowa (over 18% of its electricity from wind)
2. North Dakota (just below 18%)
3. Wyoming (~15%)
4. Oregon (~8%, up from #6)
5. Minnesota (~7.5%, down from #4)
6. Kansas (~7%, up from #9)
7. South Dakota & New Mexico (~6.5%, up from # 11 & down from #5)

9.   Texas (just under 6.5%, down from #8)

10. Colorado (~6%, down from #7)

The national average was pulled up to ~1.8% by my calculations. We’ll see if that pans out in the EIA electricity reports during the months ahead.

The percentage top 10 will remain mostly intact during the rest of 2009, with the possibility of Texas climbing up even though its electricity demand base is so high. Wyoming may hit 18% and North Dakota may pass Iowa for the top spot. I’ll let you know as the news happens here at SETenergy.org

Onwards in the Sustainable Energy Transition-

These profits show renewable energy is ready to drive a green economic recovery — providing jobs, profits, and secure, affordable energy for communities nationwide.

Onwards in the Sustainable Energy Transition!

Kansas has huge wind potential, equal to 12 times the state’s current demand of ~10 GW. This past quarter, the state surpassed its 2015 goal to have 1 GW of wind turbines built, despite not having an RPS. With such progress achieved, elected leadership of Kansas recently asked ACORE to help guide their future goals for wind deployment and the results were announced in a webinar I was fortunate to attend this afternoon.

The webinar began with an introduction by industry professional and former FERC commissioner Pat Woods, III. He laid out an overview of Kansas’s position in the US electrical grid – a member of the Southwest Power Pool which is part of the Eastern interconnection. Then Lieutenant Governor of Kansas, Mark Parkinson, described how Kansas has rich wind resources in the western part of the state – a rural area that would benefit greatly from the economic development of more wind power generation. After Lt. Governor Parkinson spoke, Rob Church laid out ACORE’s proposal for Kansas to deploy 20 GW of renewable energy by 2030.

Liberty from Coal Dependence

Kansas currently gets more than 70% of its electricity from coal. Nuclear power provides ~18%, followed by natural gas and wind generating ~5% each. Since Kansas produces only a negligible amount of coal and such electricity will get more expensive when its global warming costs are finally internalized, the ability of wind and other renewables to free the state from coal dependence is significant.

Wind Power Can Create Jobs and Economic Prosperity

After showing a more business as usual growth to 7 GW by 2030, Mr. Church described the many benefits to Kansas if the state chose a bigger goal of 20 GW. ACORE used studies by the Southwest Power Pool and the Joint Coordinated System Plan to guide their estimate of useful wind power, ensuring that their was a market for renewable energy exports. Their research led ACORE to a recommendation for 18 more GW of wind, 1.4 GW of solar, and ~1 GW of bio-power (converted coal plants).

The addition of 20 GW over the next 20 years is estimated to generate 12,000 jobs and over $20 billion for the state’s economy. Many of the jobs are in construction of turbines and four large Concentrating Solar Power (CSP) plants. But a significant share of the jobs are also in the potential for Kansas to attract wind turbine manufacturers to the eastern part of the state. This combination of construction jobs in western KS and manufacturing jobs in eastern KS enhances the proposal as a benefit for the whole state.

Benefits to Neighbor States as well

And the benefits don’t stop in Kansas. The people of Arkansas and Tennessee and other neighbors eastward who have less wind potential can get access to the economical power source of strong Kansas wind. Transmission investment and developments toward a smart grid that can store and deploy energy as-needed will be crucial in this 20 GW plan. But with  Kansas leadership and federal leadership working together with nonprofits like SET and ACORE and innovative renewable businesses, such inspiring energy progress is attainable.

Congratulations to ACORE on the best webinar I have yet attended! And here’s to continued progress in every state of our union maximizing their renewable resources to create jobs and drive a robust economic recovery. Onwards in the Sustainable Energy Transition-

The rapid wind growth of 2008-09 is truly remarkable amidst the backdrop of a difficult recession. And it strengthens my argument that the EIA is underestimating wind power deployment over the next two decades. The report points to 300 GW of wind projects in the current pipeline. Some may not come to fruition. But if just half of them become reality by 2030, it will more than double the EIA’s forecast. And many new proposals will come about in the years ahead as our wind resource becomes better understood and wind turbine technology improves its efficiency and costs.

Wind power in the US will probably pass 1.5% of US electricity in 2009 and then 2% in 2010 as it marches toward our potential to at least equal Denmark’s 20%.

I’ll keep you updated as this clean energy market continues to develop!

Onwards in the Sustainable Energy Transition-

Wind power capacity has been growing faster than 30% per year these last several years, with last year’s growth rate a huge 50%. While this year’s growth will slow dramatically from the 8+ GW of 2008 due to the financial crisis and recession, it will be much faster than the ~5% growth predicted by the EIA through 2030. And the economic recovery in 2010+ will allow wind power additions to grow to new records above 10 GW per year.

Let’s say the US wind market stagnates at 8 GW per year through 2030. In that case, wind power capacity would be approximately 200 GW (versus the 44-75 GW the EIA predicts). I think even 200 GW may be pessimistic, as I share below. But what rationale could the EIA have for such a low number? Do they think the US is running up against the wall of maximum US wind potential ~50-75 GW?

If so, they’d be wrong. The most often cited wind study on US potential was done by the Pacific Northwest Laboratory in 1991 whose results are posted at the American Wind Energy Association (AWEA) state by state projects listing. The study estimates US onshore wind potential at a staggering 1,200 GW (a more recent Stanford study raises the estimate higher due to the increased height of wind turbines since 1991). And just yesterday, Interior Secretary Salazar cited the National Renewable Energy Laboratory (NREL) estimate of 1,900 GW of potential offshore (1,000 Atlantic and 900 Pacific). Yes, you read that right: our country has 3,100 GW of wind power potential, thus today’s 25 GW capacity is less than 1% of our potential.

What if 2030 US = 2009 California

To develop a reasonable wind deployment number for 2030, I explore how much wind capacity we would have if our country deployed turbines by 2030 similar to California today. California was the original leader in wind power during the 1980s and 1990s. Over the past few years, two states with much larger potential, Texas and Iowa, passed California’s 2.5 GW. Within a few months, California will add .275 GW under construction to a grand total of ~2.8 GW. This represents ~40% of the 1991 wind potential study’s 6.8 GW estimate. To make up for the fact that California has higher electricity prices, I lower the percentage by half the price difference (since California has ~40% higher electricity prices than the nationwide average, I shave 20% off of 40%, getting 32%). Now let’s use the 32% number in relation to the rest of the country:

An equal portion of US onshore potential of 1,200 GW would translate into 384 GW. Since offshore wind is a less mature industry, we can leave it at just 1% of its potential by 2030: 19 GW.

By these estimates, wind power could reasonably grow to ~400 GW in 2030 (five times the EIA estimate and enough to provide more than 20% of our nation’s electricity).

Since a lot of this wind power will be harvested in less populated areas such as the Great Plains, building transmission lines to surrounding cities will be an important aspect of the effort. Thus there are green collar jobs from turbine manufacturing, installation, maintenance, and construction of efficient electricity transmission poised to help drive a sustainable economic recovery in 2010+.

EIA Disses Offshore

The EIA report estimates just .2 GW of offshore wind installed by 2030 even though 2 GW are already proposed here in 2009. European nations have already deployed ~1.5 GW of offshore wind, so there is little excuse for us not to build quite a few GW offshore (where the wind is steady and close to the large population centers along the coast).

Bottom Line:

The EIA has underestimated wind growth these past few years. And I believe they are repeating their mistake in their Annual Energy Outlook. Rather than a wind capacity of 44-75 GW in 2030, I see the potential for ~400 GW by just catching up with California over the next 21 years. While this exercise was somewhat arbitrary, it provides a reasonable estimate based on current technology that takes into account lower electricity prices outside of California.

Please let me know your thoughts on the matter, and we’ll see how much clean wind energy we are able to deploy in the years ahead!