Many prognostications have been made about the impact of EPA’s Clean Power Plan, the rules to reduce carbon pollution from existing power plants, issued on August 3.
Despite what you may have heard, EPA doesn’t dictate any particular outcomes, instead deferring to states to develop implementation plans, and those plans aren’t due until 2018.
Still, modeling and recent trends point to one big winner: wind power.
“We think wind will be a major compliance solution for many states and utilities,” said Rob Gramlich, senior vice president for government and public affairs for the American Wind Energy Association (AWEA), speaking at the National Clean Energy Summit 8.0 in Las Vegas.
“It is well suited as a carbon solution, because of its geography,” he explained. “There is cost-competitive wind in places that emit a lot of carbon, like central states in the MISO and SPP regions.”
The Midwestern wind belt has seen an explosion of wind power in recent years, with three states getting more than 20 percent of their power from wind.
Credit trading between states and regions, if it is taken up by states in their implementation plans, would provide an additional boost to wind, expanding virtual access to the wind belt.
Modeling from EIA and EPA show huge growth in wind power as a least-cost bulk compliance option.
EIA’s analysis of the draft rule, released in May, found wind doubling or tripling by 2030, adding between 65 gigawatts and 130 gigawatts of new capacity, with a central scenario of just over 100 gigawatts. Wind supplied over half of the compliance response to the Plan, while energy efficiency, solar, and natural gas made up the other half in the central scenario. At this level, wind would make up 12 percent of total U.S. power demand by 2030, double what it would do without the Plan.
Energy Secretary Ernest Moniz, speaking at the AWEA conference in May, said, “We believe very much in the central role of wind in meeting our climate challenges, and we’re very committed in this direction.”
As if this wasn’t rosy enough, Michael Goggin of AWEA thinks that EIA overestimates wind-power capital costs.
“Because it uses a wind-cost estimate that is about 20 percent too high, last month’s EIA analysis may have actually been a conservative estimate of the role wind energy will play in Clean Power Plan compliance,” he wrote.
In its 2014 Wind Technologies Market Report, Lawrence Berkeley National Lab (LBNL) reported that the average installed capacity costs for wind turbines in 2014 was $1,710 per kilowatt, fully $500 less than EIA reckons in their modeling of the Clean Power Plan (and other forecasts).
LBNL reports that wind contract prices averaged less than 3 cents per kilowatt-hour for the last two years, dominated by super-cheap prices in the U.S. interior. Wind farms in the Midwest and Texas, accounting for 82 percent of the new megawatts, have reached prices lower than 2 cents per kilowatt-hour and capacity factors over 50 percent.
And there are indications that wind prices will continue to fall.
DOE’s huge Wind Vision report from April describes emerging technical advances that promise to further lower costs, improve output, and extend wind into low-wind-speed areas that haven’t been viable before. The biggest innovations have been the development of longer blades and taller towers.
Blades have been growing steadily longer, with rotor diameters exceeding 100 meters now common. The larger the blades, the larger the “swept area” will be, capturing more of the energy in the wind. Since 2006, GE has doubled the ratio of the swept area to the generation capacity on its turbines.
Tower height increased for many years, but has leveled off at around 80 meters, constrained by the logistical challenges of delivering such large equipment to rural sites. Towers are made of enormous steel cylinders, with three or four sections bolted together. Their tremendous weight and size make rural bridges and underpasses a real impediment.
To get around the constraint, tower-makers are trying some novel approaches. One is to cast the lower sections of the tower out of reinforced concrete at the construction site. Another is to revisit the lattice, or “Eiffel Tower” design, with bars bolted together on-site like a giant erector set. These towers were common in the early days of wind, and can still be seen in California mountain passes near Altamont and Palm Springs.
GE is offering a new variation it calls the Space Frame, where the tower is wrapped with fabric that makes it look like a five-sided cylinder. This reduces the risk of birds perching on the cross-bars, improves the appearance, and protects the tower from the elements.
These new tower designs are able to reach 140 meters, thus tapping the higher and steadier winds that can be found at that height.
And reaching higher means reaching new areas that have never had wind before. Wind is now in 39 states, with places like Ohio, Michigan, and East Texas seeing new wind farms.
DOE has high hopes that developers will be able to make projects work in the Southeast, which has weaker winds and no utility-scale wind projects. Southern utilities have been signing contracts for wind power, but all of it is imported from projects in the Midwest. There have been a few proposed projects in the South, but all have run up against low margins and siting barriers.
As LBNL points out, the same turbine improvements are also being used to increase performance in windier sites. Developers are installing “low-wind-speed” turbines at windier sites, thus capturing energy from a wider range of wind speeds. This increases total energy production and results in a higher capacity factor.
The two trends – higher capacity factors in windy areas and more deployment in less-windy areas – are balancing each other out. National average capacity factors have remained unchanged in recent years, ranging between 32 percent and 35 percent.
Policy trends also bode well for wind. The California legislature is expected to boost its state renewable portfolio standard to 50 percent, while New York, Michigan and Illinois are debating higher standards.
There are even signs of life with the production tax credit (PTC). The federal incentive for renewables since 1992 has been under unrelenting attack from fossil-fuel companies and related activist groups, like the American Energy Alliance, run by a former Koch Industries lobbyist.
Nevertheless, the PTC was endorsed by the Senate Finance Committee in July, by a bipartisan vote of 23-3. The House has not yet taken up the issue.
Because the PTC applies to projects that were “under construction” when the credit expired at the end of 2014, LBNL predicts “solid growth” in 2015 and 2016 as those projects come on-line. Various forecasts predict between 13 gigawatts and 16 gigawatts over these two years.
After 2016, though, prospects are uncertain. Most analysts predict a big drop in 2017, to perhaps 1 gigawatt to 4 gigawatts, followed by steady growth.
One final boost for wind may come from the new Clean Energy Incentive Program embedded in the final rule of the Clean Power Plan. The program gives extra creditsfor wind and solar generation in 2020 and 2021 (ahead of the Plan’s 2022 start date) for projects that start construction after a state’s compliance plan is finalized in 2018.