Whitepaper on Wind Power.Pdf
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National Rural Electric Cooperative Association 4301 Wilson Boulevard Arlington, VA 22203-1860 April 2003 Table of Contents I. INTRODUCTION 1 II. WIND POWER FUNDAMENTALS 3 III. WHERE THE WIND BLOWS 6 IV. STATE AND FEDERAL INITIATIVES 9 V. WIND POWER TECHNOLOGY 23 VI. DISTRIBUTION UTILITY ISSUES 30 VII. TRANSMISSION AND THE WHOLESALE MARKET 53 VIII. ISSUES FROM THE CONSUMER PERSPECTIVE 59 IX. WIND ECONOMICS 64 X. RESOURCES 74 I. INTRODUCTION Consumer and public interest in the use of renewable energy resources is growing. National Rural Electric Cooperative Association (NRECA) resolution 01-D-3, Support for Fuel Diversity and a National Energy Policy, urges NRECA to “participate in the development of a national energy policy, and to encourage all cooperatives to support research and development to promote the utilization of all existing and new fuels and technologies, including those that utilize domestic resources.” As of November 2002, nearly 200 NRECA members offer “green power” programs, including power generated by such technologies as wind, solar, biomass, landfill gas, as well as green power purchased by cooperatives at wholesale for resale to their consumers. One renewable energy resource receiving a great deal of attention from rural consumers and public agencies is wind. Wind is the fastest-growing form of renewable energy in the United States. For example, from 1991 to 2002, the production of electricity from wind turbines in the United States has more than doubled, a growth rate faster than any other form of power generation. Today there are more than 25,000 MW of wind generation installed worldwide, with more than 4600 MW in the United States alone. Thirteen U.S. states have more than 20 MW installed, and the number is expected to double by 2010. This white paper will review the status of wind power today, addressing basic wind power technologies, recent federal and state initiatives, interconnection and transmission issues, potential impacts on distribution cooperatives and generation and transmission cooperatives (G&Ts), wind energy from the point of view of consumers, and wind energy economics. It is beyond the paper’s scope to evaluate predictions and proposed target goals regarding future wind 1 energy generation. But it is clear that electric cooperatives will increasingly be required to understand and address wind power from technical, consumer, utility, and regulatory points of view. 2 II. WIND POWER FUNDAMENTALS “Wind power” and “wind energy” are phrases used to describe the process by which wind is used to generate mechanical power or electricity. Wind turbines convert the kinetic energy in the wind into mechanical energy; a generator can convert this mechanical energy into electricity. Wind is a form of solar energy created by the uneven heating of the atmosphere, irregularities on the earth’s surface, and the rotation of the planet. The economic viability of any wind generation project is extremely location-sensitive: wind generators are economically efficient only in precise locations and at specific heights at those locations. Wind turbines turn in the moving air and power an electric generator, which supplies an electric current. Such turbines are available in a variety of sizes and power ratings. One federal publication defines three applications based on unit size: • Small generators (400 W-50 kW) are described as appropriate for homes, farms, water pumps, and telecommunications sites. Rotor diameter sizes range from 3 to 50 feet. • “Village power” distributed generator systems are rated at 50 to 500 kW. Rotor diameter sizes range from 30 to 164 feet. • Central station wind farms produce more than 500 kW. Rotor diameter sizes range from 140 to 295 feet. Wind energy enjoys certain features that make it an attractive resource to many observers: • Wind power is often well received by the public as well as by cooperative members and land owners. • Wind generation produces no air emissions. 3 • Wind turbines can be located on land that may also be used for grazing or farming. • Towers and turbines can be constructed in a relatively short time. • Wind turbine installations can be distributed and thus installed in relatively small increments on distribution feeders. • There are no fuel costs. • Utility scale turbines have accumulated millions of operating hours and represent a well- proven technology. • Energy source planning can take advantage of design modularity, since more turbines can be added relatively easily if the load grows. • Wind is the lowest-cost non-hydro renewable energy source • Wind is renewable, in that using it now does not decrease future supply. But wind energy is not a simple solution to the nation’s or the world’s energy problems. The following potential concerns must be considered when evaluating this technology: • Good wind sites are often remote, located far from areas of electric power demand, and in regions with inadequate transmission. • Increasingly congested transmission grids make it difficult for any generation to interconnect to the grid without requiring a significant expenditure to upgrade the system to absorb the added generation. • Improperly sited, wind turbines may create visual issues, noise issues and may be hazardous to birds. • Wind turbines may involve safety hazards, such as ice chunks being thrown by rotor blades 4 • Wind is intermittent and does not always blow when electricity is needed. • Current storage options (usually batteries) are expensive. Wind can be used in conjunction with hydro resources that can act as storage. • The newest and presumably most efficient wind turbine technology is about three years old, providing a meager record from which to draw conclusions regarding reliability, durability, longevity, and maintenance costs. • Wind energy in general has not yet demonstrated its ability to compete in cost- effectiveness with fossil fuels. • Wind energy construction projects are not without risk. • The lower capacity factor of wind generation results in higher transmission costs per kWh transmitted. 5 III. WHERE THE WIND BLOWS The National Renewable Energy Laboratory (NREL) of the Department of Energy has produced estimates of the electricity that potentially could be generated by wind power and of the land area available for wind energy. Currently, less than 1% of total electricity consumed in the United States is generated by wind, but vast areas of the country could be used to harvest wind. Geographic areas are characterized on a wind power scale from class 1 to class 7, with each class representing a range of mean wind power density at specified heights above the ground (see Exhibit 1). Areas designated class 4 or greater are said to be potentially viable locations for advanced wind turbine technology. The amount of windy land available in power class 4 and above is approximately 460,000 square kilometers, or about 6% of the total land area in the contiguous United States (see Exhibit 2). For example, according to some estimates, North Dakota alone has enough areas ranked class 4 and higher to potentially supply 36% of the total 1990 electricity consumption of the lower 48 states. Furthermore, to provide 20% of the nation’s electricity, only about 0.6% of the land of the lower 48 states would have to be developed with 1 wind turbines. 1 http://www.nrel.gov/wind/potential.html 6 Exhibit 1. Wind Power Classification Exhibit 2. U.S. Wind Power Classification Map 7 This considerable wind energy potential has not yet been tapped for a variety of reasons, including limited transmission capacity, lack of utility experience, lack of effective state policies, institutional bias, and state of current technology. But during the past decade, improved materials and increased knowledge of wind turbine behavior have led to the development of better equipment. As will be discussed below, the price of electricity produced from wind by these advanced turbines is becoming competitive with conventional sources of power in some applications, particularly where federal or state support is available. However, the economics of wind energy are specific-site dependent, as is true with all energy resources. Saying that only 0.6% of the land mass would be required to generate 20% of U.S. electricity needs may gloss over the fact that the land in question must be located in a windy enough region to warrant development. Placing a wind turbine even a short distance from its ideal location will typically mean reduced energy production from the site. 8 IV. STATE AND FEDERAL INITIATIVES Both the states and the federal government have expressed significant interest in wind and other alternative forms of generation and have developed a broad range of programs to encourage exploration of renewable energy resources. A. Research, Development, and Education Funds The Department of Energy’s Wind Powering America program supports a national goal of increasing wind energy’s contribution to the amount of electricity used in the United States to 5% by the year 2020. This represents about 60,000 MW of new, domestically produced power, the majority of which will be developed in rural parts of the United States. The department also leads the nation’s investment in wind technology through its research and development (R&D) program. Since 1978, the program has worked with industry to reduce the cost of wind energy from 40 cents per kWh to the 4 to 6 cent range today, with a goal of 3 cents per kWh by 2012 in lower class wind areas. Success in achieving these goals would make wind competitive with traditional generation in almost every moderate- to high-wind speed area, while mitigating transmission constraints. The FY 03 budget request for the wind program was approximately $44 million out of a total FY03 renewable energy R&D budget request of $407 million. B. Direct Support for Investment Costs On October 23, 2002, Rural Utilities Service (RUS) Administrator Hilda Legg announced that the RUS Electric Program will make available $200 million in loan guarantees for renewable electric generation projects.