U.S. Wind Industry: Market & Policy Update September 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 25,000 MW 20,000 MW Annual Additions Cumulative Capacity 15,000 MW 10,000 MW 5,000 MW
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 Nordic Fuhrlander (announced) Siemens (announced) Suzlon - Blades Acciona, Clipper Siemens - Blades Global Wind Systems (announced) Gamesa GE Energy Vestas Nordex GE Energy DeWind
Wind Manufacturing Facilities Across the U.S. 55 Facilities Opened, Expanded or Announced in 2008. Major facilities online prior to 2008 All new online in 2008 2Q 2009 Announced facilities Source: AWEA, Sample of Manufacturing Facilities, August 2009
2 nd Quarter Market Report Capacity Additions (1Q 2009) Capacity Additions (2Q 2009) Projected Installations Cumulative Capacity 1Q 2009: 2,818 MW 2Q 2009: 1,249 MW >5,500 MW under construction (not necessarily all for this year)
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 WA: 15% by 2020 OR: 25% by 2025 (large utilities) 5-10% by 2025 (smaller utilities) MT: 15% by 2015 ND: 10% by 2015 MN: 25% by 2025 (Xcel: 30% by 2020) WI: requirement varies by utility; 10% by 2015 goal VT: RE meets load growth by 2012 ME: 30% by 2000 10% by 2017 - new RE NH: 23.8% in 2025 MA: 4% by 2009 + 1% annual increase CA: 20% by 2010 NV: 20% by 2015 AZ: 15% by 2025 NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) SD: 10% by 2015 UT: 20% by 2025 CO: 20% by 2020 (IOUs) 10% by 2020 (co-ops & large munis) KS: 20% by 2020 IA: 105 MW IL: 25% by 2025 MO: 15% by 2021 NC: 12.5% by 2021 (IOUs) 10% by 2018 (co-ops & munis) RI: 16% by 2020 CT: 23% by 2020 NY: 24% by 2013 NJ: 22.5% by 2021 PA: 18%¹ by 2020 MD: 9.5% in 2022 DE: 20% by 2019 DC: 11% by 2022 VA: 12% by 2022 HI: 20% by 2020 TX: 5,880 MW by 2015 State RPS State Goal Solar water heating eligible
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 Bill passed February, Rules released July, Money released early September, must start construction by end of 2010, complete end of 2012 Source: U.S. Department of Energy, 2009
Annual Capacity Installed (Megawatts, MW) Our Past: The Boom and Bust Cycle 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 93% Drop 73% Drop 77% Drop 1,000 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: AWEA
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Policy Timeline for Wind Looking Ahead Proposed RES PTC for Wind Grant in lieu of ITC- PTC Bonus Depreciation
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) Washington 5,831 Oregon 9,361 California 18,629 Nevada 3,913 Idaho 446 Utah 1,052 Arizona 7,268 Montana 2,327 Wyoming 7,870 Colorado 16,602 New Mexico 14,136 North Dakota 11,493 South Dakota 30,112 Nebraska 3,726 Kansas 13,191 Oklahoma 14,677 Texas 63,504 Minnesota 20,011 Iowa 14,569 Wisconsin 908 Missouri 2,050 Arkansas 210 Illinois 16,284 Michigan 2,518 IN 8,426 Ohio 3,683 WV 1,045 VT 155 Penn. 3,391 New York 8,000 VA 820 Maine 1,398 NH 396 MA RI 492 347 NJ 1416 DE 450 MD 810 Under 1000 MW 1,000 MW-8,000 MW Over 8,000 MW Total 311,155 MW
Near-term Transmission Projects for Wind Transmission project name, location Voltage (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) BPA lines from Open Season (WA, OR) (DC) 320 1,000-2,000 2012 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) Total 345 500 2013 ~32,000 MW
Why Focus on Wind Energy in Comprehensive Climate Legislation? Rapidly Deployable and Cost-Effective Today A reduction path of 60 to 80% by 2050 requires at least a 15-20% reduction by 2020. Lowers the Cost of Compliance Avoids Locking-in Future Emissions Offers Time Buffer for Emerging Clean Tech Create Reductions, not Delay Reductions 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?
Power Sector CO2 Emissions (million tons) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 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. 3,000 2,500 2,000 1,500 1,000 500 0 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 alone could meet nearly half of the power sector reductions requirements under the proposed Waxman-Markey climate bill.
Wind Reduces Compliance Cost PJM (Mid-Atlantic ISO) January 2009 Study on the Cost of Climate Legislation 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. ERCOT, Electric Reliability Council of Texas, May 2009 Study on the Cost of Climate Legislation 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 $5 per month.
Does Carbon Price Adequately Deploy? Emission reduction regulations will send a market signal for cleaner energy BUT, such regulations may be too weak, too distant, and too volatile to cause the necessary paradigm shift in renewable energy deployment in the near term when most critical. Can climate legislation, in isolation, send an adequate price signal to deploy available clean technology?
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Allowance Price ($/ton CO2e) 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. 30 25 20 15 10 5 CBO EPA - IPM 0
Thank You for your time! Elizabeth Salerno esalerno@awea.org