DOE Updates The State Of U.S. Wind Energy
According to the U.S. Department of Energy’s (DOE) annual wind market reports, the U.S. added more than 8.2 GW of wind capacity last year, representing 27% of all energy capacity additions in 2016. The DOE says its three new market reports – covering land-based utility-scale, offshore and distributed wind – demonstrate continued growth in wind power nationwide.
The reports were prepared by the DOE’s Lawrence Berkeley National Laboratory, whose contributions were funded by the DOE’s Office of Energy Efficiency and Renewable Energy.
According to the DOE, recent and projected near-term growth is supported by the industry’s primary federal incentive, the production tax credit (PTC), as well as myriad state-level policies. Wind additions have also been driven by improvements in the cost and performance of wind power technologies, yielding low power sale prices for utility, corporate and other purchasers. At the same time, the prospects for growth beyond the current PTC cycle remain uncertain, given declining federal tax support, expectations for low natural gas prices and modest electricity demand growth, the agency points out.
Utility-scale onshore wind
According to the report, utility-scale wind installations stand at more than 82 GW, enough to meet about 6.2% of U.S. end use electricity demand in an average year.
In total, 40 states and Puerto Rico operated utility-scale wind projects in 2016. Texas led the nation in capacity, with over 20 GW of wind installed. Notably, utility-scale wind came online in North Carolina in early 2017.
The report also finds that wind energy continues to be sold at attractive prices through power purchase agreements – making wind cost-competitive with traditional power sources such as natural gas in many parts of the U.S., especially when wind is sold at a fixed price over 20 years.
In the past year, Iowa and South Dakota produced more than 30% of their electricity from wind, and 12 other states exceeded 10% (Kansas, Oklahoma, North Dakota, Minnesota, Colorado, Vermont, Idaho, Maine, Texas, Oregon, New Mexico and Nebraska).
The Berkeley Lab notes that wind energy pricing for land-based utility-scale projects remains attractive to utility and commercial purchasers.
In December, Deepwater Wind completed the commissioning of the Block Island Wind Farm, marking a milestone as the first commercial offshore wind project in the U.S.
According to the report, the U.S. offshore wind project development pipeline includes over 20 projects totaling 24,135 MW of potential installed capacity. Most of the near-term activity is concentrated in the Atlantic off the Northeast coast, but projects have also been proposed in the Southeast Atlantic, the Pacific, the Gulf of Mexico and the Great Lakes.
Of the U.S. projects in deeper waters – where traditional, bottom-mounted technologies are not feasible – proposed floating offshore wind projects now total 1,993 MW of announced capacity, the report says.
Notably, the DOE adds, news of the declining costs for offshore wind projects in Europe have spurred confidence in the domestic U.S. offshore wind market over the past year. Several states, including Massachusetts, New York and Maryland, have enacted new policy or bolstered their existing policy to support the development of over 4 GW of offshore wind.
Compared with traditional, centralized power plants, which send power over transmission lines to distant end users, distributed wind energy installations supply power directly to homes, farms, businesses and communities. In total, U.S. wind turbines in distributed applications reached a cumulative installed capacity of 992 MW through 2016.
This capacity comes from roughly 77,000 turbines installed across all 50 states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands.
Turbines used in these applications can range from a few hundred watts to several megawatts; this helps power remote, off-grid homes and farms, as well as local schools and manufacturing facilities, the report explains.
Furthermore, U.S. manufacturers continued to dominate domestic sales of small wind turbines (up through 100 kW), and half of U.S. small wind turbine manufacturers also exported their products to other countries.
Between 2014 and 2016, U.S.-based small wind turbine manufacturers accounted for more than $240 million in small wind turbine export sales, the report adds.
According to the Berkeley Lab, the report also finds that bigger turbines are enhancing wind project performance: The average generating capacity of newly installed wind turbines in the U.S. in 2016 was 2.15 MW – up 11% from the average over the previous five years.
In addition, the average rotor diameter in 2016 was 108 meters, representing a 13% increase over the previous five-year average, while the average hub height in 2016 was 83 meters, which was up 1% over the previous five-year average.
Moreover, turbines originally designed for lower wind speeds are now regularly deployed in higher wind speed sites, boosting project performance, the Berkeley Lab says. Increased rotor diameters, in particular, have begun to dramatically increase wind project capacity factors. For example, the average 2016 capacity factor among projects built in 2014 and 2015 was 42.6% compared with an average of 32.1% among projects built from 2004 to 2011 and 25.4% among projects built from 1998 to 2001.
Further, low wind turbine pricing continues to push down installed project costs. Wind turbine equipment prices have fallen from their highs in 2008 to $800-$1,100/kW, and these declines are pushing down project-level costs, according to the report. The average installed cost of wind projects in 2016 was $1,590/kW, down $780/kW from the peak in 2009 and 2010.
The report also finds that manufacturing supply chains continued to adjust to swings in domestic demand for wind equipment in 2016. Wind sector employment reached a new high of more than 101,000 full-time workers at the end of 2016, and the profitability of turbine suppliers has generally rebounded over the last four years. For wind projects recently installed in the U.S., domestically manufactured content is the highest for nacelle assembly (>90%), towers (65%-80%), and blades and hubs (50%-70%). However, it is much lower (<20%) for most components internal to the turbine, the report says.
Although there have been a number of manufacturing plant closures over the last decade, each of the three major turbine manufacturers serving the U.S. market (GE, Vestas and Siemens) has one or more domestic manufacturing facilities in operation, according to the report.
“The wind industry continues to install significant amounts of new capacity and supplied about six percent of total U.S. electricity in 2016,” states Daniel Simmons, acting assistant secretary for energy efficiency and renewable energy. “As our reports explain, a combination of federal subsidies, state mandates and technological advancements continue to help drive new wind capacity additions.”
Ryan Wiser, senior scientist at the Berkeley Lab, adds, “Wind energy prices – particularly in the central United States and supported by federal tax incentives – are at all-time lows, with utilities and corporate buyers selecting wind as the low-cost option.”
“The Department of Energy’s research shows that wind power is a bright spot on the American energy landscape,” says Tom Kiernan, CEO of the American Wind Energy Association. “U.S. wind projects are already among the most productive in the world, and this new data proves we have even greater potential to deliver affordable, reliable and clean electricity to the American people.”
Developer Makes Inroads Outside Of Texas
Tri Global Energy (TGE) is developing a whole lot of wind in Texas. In fact, citing the American Wind Energy Association’s recently released U.S. Wind Industry Second Quarter 2017 Market Report, TGE says its wind farms represent more than half of all facilities under development in the state.
The company says Texas, which “easily leads all other states” in under-construction wind farms, is currently working on almost 5.34 GW of wind power.
However, in early August, the Dallas-based company announced its expansion into new territory: Nebraska. Moreover, the newly planned project will represent TGE’s first wind project developed outside of the Lone Star State.
The Sugar Loaf Wind Energy Project is a 100 MW facility whose development will begin sometime this year, TGE estimates. With Sugar Loaf, the company, which was founded in 2009, is growing its wind portfolio to more than 2.9 GW.
“We are proud to add our Nebraska project as we continue to help meet the growing energy needs of Americans with wind energy,” says John Billingsley, chairman and CEO of TGE, in a press release.
When asked why Nebraska was selected for its latest wind venture, TGE told North American Windpower in a statement that it has “received interest from communities across the U.S.” and that Sugar Loaf “represents an opportunity to work cooperatively with the community and local partners.”
“The community and partners share TGE’s core values and desire for economic development in rural communities,” the company explains.
As for any future plans to keep on expanding to other states, TGE “intends to stay true to its Texas roots.” Still, the company says, “We’ll look to replicate our success in other regions of the country.”
ALLETE Refurbishes Turbines For Safe Harbor
Duluth, Minn.-based ALLETE Clean Energy, a wholly owned subsidiary of ALLETE Inc., has announced a strategic initiative to refurbish 385 turbines at three wind farms in Minnesota and Iowa.
The project includes replacing select blades, gearboxes and generators on turbines at the Lake Benton wind site in Lincoln County, Minn., and the Storm Lake I and II wind sites in Buena Vista and Cherokee counties, Iowa.
According to ALLETE, the initiative will improve turbine performance and reliability, generate federal production tax credits (PTCs) at each site, and support the renewal of power sale agreements at the Storm Lake sites.
“As a central part of ALLETE Clean Energy’s multifaceted growth strategy, this $80 million reinvestment will contribute to future earnings growth,” states Allan S. Rudeck Jr., president of ALLETE Clean Energy. “Revenue from our existing wind sites such as Lake Benton and Storm Lake is the foundation for ALLETE Clean Energy’s momentum and growth. Neighboring communities also benefit by keeping these older sites viable and valuable, which maintains jobs and landowner lease payments.”
The refurbishment will be staged from 2017 through 2020 to minimize turbine downtime and maximize safe energy production at each site, the company notes. In total, the sites produce approximately 700,000 MWh of energy per year and represent about 50% of ALLETE Clean Energy’s current electricity sales.
In addition to the turbine refurbishments, the project includes installing new communications infrastructure at the sites to better integrate them into ALLETE Clean Energy’s corporate operations structure. This includes new fiber optic connections, servers, and data acquisition and management systems.
Energy from the Lake Benton site is fully contracted through 2028, and approximately 8 MW of Storm Lake I production is contracted through 2032. ALLETE Clean Energy is working to re-contract the balance of the Storm Lake I and II power sale agreements, which expire in 2019.
The turbine refurbishment project follows the company’s December $100 million investment in wind turbine components that meet the standards for the PTC’s “safe harbor” provision. The investment in safe harbor turbines allows ALLETE Clean Energy to pursue a three-pronged PTC strategy before the 2020 federal PTC phaseout. The strategy includes building and operating new wind farms based on long-term power purchase agreements, building wind farms for other companies for a development fee, and refurbishing its existing wind farms while extending power sale agreements.
Al Hodnik, president and CEO of ALLETE, says, “Maintaining and enhancing the Lake Benton and Storm Lake sites, along with extending power sales agreements, provide a cost-effective platform for the strategy that is already bearing fruit as the safe harbor turbines connect ALLETE Clean Energy with new industry partners nationwide.”
ALLETE Clean Energy was established in 2011 to acquire or develop capital projects to create energy solutions by way of wind, solar, biomass, hydro, natural gas, shale resources, clean coal technology and other emerging innovations.
NYSERDA Wraps Up Initial Offshore Wildlife Surveys
As part of the state’s initiative to pursue responsible offshore wind development, the New York State Energy Research and Development Authority (NYSERDA) has completed its first year of aerial wildlife data collection over an offshore wind area.
Over three years, NYSERDA is acquiring regional-scale baseline information on seasonal wildlife distribution, abundance and movement over a 16,000-square-mile area. The potential effects of individual offshore wind projects, as well as any possible cumulative effects of multiple projects, will be better understood with this data, says NYSERDA. The authority and other state agencies are in the middle of developing the New York Offshore Wind Master Plan, due by the end of the year.
“This survey underscores the importance of our commitment to the preservation of the wildlife in our coastal areas and our commitment to environmental stewardship as we develop offshore wind,” comments Alicia Barton, president and CEO of NYSERDA. “The state is undertaking a series of studies to ensure that offshore wind is a win for New York’s environment from both a carbon-reduction standpoint and a resource-preservation standpoint.”
With each pixel corresponding to 1.5 centimeters on the ocean surface, the gathered images provide details to allow taxonomists to identify the species for an extremely high percentage of the birds and marine animals, according to NYSERDA. Bird species identified include shearwaters, double-crested cormorant, petrels, gulls and terns. Remarkable as these images are, however, it is important to note that the vast majority of the images (more than 90%) show no birds or marine animals at or near the water surface, the authority points out.
As the survey progresses, distribution of organisms will be evaluated for patterns to aid in identifying areas of lower biological activity where offshore wind development may be feasible.
NYSERDA has developed a website that allows the public to see some of the different animals that have been recorded. The aerial surveys are being conducted in coordination with other research, including visual surveys from the New York State Department of Environmental Conservation and federal entities.
NYSERDA’s study is being carried out by Normandeau Associates Inc. and APEM Ltd. It is one of more than 20 studies NYSERDA is undertaking to provide current information about potential environmental and social sensitivities, economic and practical considerations, and regulatory requirements associated with offshore wind energy development. These studies cover topics such as fish and fisheries, marine wildlife, sediments, port infrastructure, and permitting.
APEM has begun surveying for the project using a newly developed camera system, Shearwater III, which was developed to push image resolutions to as low as a 0.5-centimeter resolution. APEM carries out the surveys, and the images are then analyzed by experts at Normandeau and APEM to identify birds and other marine species.
LEEDCo Advances Offshore Demo Project
Representing a major step forward for the proposed offshore demonstration project, the Ohio Power Siting Board (OPSB) has found that Icebreaker Windpower Inc.’s application for a permit to construct North America’s first freshwater offshore wind project is now in compliance and is ready to be processed.
According to Icebreaker Wind, the OPSB will issue a public notice, and review of the application will continue. The six-turbine, 20.7 MW demonstration project is proposed eight to 10 miles off the shore of Cleveland. Icebreaker says the project would create nearly 500 jobs and provide power for approximately 7,000 homes.
Icebreaker says OPSB’s completeness determination followed the developer’s submission of two memoranda of understanding with the Ohio Department of Natural Resources regarding monitoring protocols to determine any project impacts on fisheries, aquatic resources, and birds and bats.
“The OPSB’s determination that our application is now complete is a major step forward in the state permitting process,” states Dr. Lorry Wagner, president of project developer Lake Erie Energy Development Corp. (LEEDCo). “We are confident that our application demonstrates conclusively that our offshore wind demonstration project will not only have minimal adverse impact on fish and wildlife, but will also create jobs, boost the local and regional economy, and provide a local source of clean energy.”