In 2010, DOE expanded existing wind power technology test centers in an ongoing effort to improve wind energy technology reliability and performance. DOE continued work on additional facilities around the country, such as a blade test facility, a large drivetrain testing facility, university-led research centers, and regional test centers for small wind technologies. DOE also launched a project to develop midsize wind turbines (100-kW to 1,000-kW).
DOE analyses resulted in strategies for offshore wind farm technology development, workforce development, and gearbox reliability improvement. The Wind Program studies provide utilities and regulators detailed analyses of the integration of high penetrations of wind power generation (between 20% and 30%) on a large scale in the synchronous electricity grids covering the contiguous 48 states. The Department of the Interior, the Department of Commerce, and DOE are working together to mitigate administrative and technical barriers to both land-based and offshore wind energy development.
Culminating a year of in-depth analysis, President Obama announced a goal to generate 80% of the nation’s electricity from clean energy sources by 2035. Wind energy will make critical contributions toward this long-term goal and to the shorter-term goal of doubling the nation’s electricity generation capacity from renewable sources by 2012.
DOE’s report 20% Wind Energy by 2030 examines the feasibility, costs, and benefits of supplying 20% of the nation’s electricity from wind power by the year 2030. This report, developed in collaboration with a broad range of wind industry and energy sector experts, identifies priority needs for accelerating wind energy expansion in the United States, and provides a foundation for coordinated action between the DOE Wind Program, industry, utilities, government, and other stakeholders.
In 2010, the U.S. wind turbines industry installed 5,115 MW of generating capacity, increasing the country’s installed wind farm capacity by 15%, according to the American Wind Energy Association’s (AWEA) U.S. Wind Industry Year-End 2010 Market Report . This was about half of the capacity that was added in 2009. While 3,195 MW came on line in the last quarter of the year, 5,600 MW were under construction as the year ended. Wind power now can contribute about 3% of the total U.S. electricity supply, and, in some states, wind contributes up to 25% of their electrical generation during peak production.
Generation from wind energy is making a difference to the nation’s energy supply. In early 2011, Texas wind power helped reduce the impact of cold and icy conditions that caused 50 fossil-fueled power plants with about 7.0 GW of generation to go offline. During the peak of the electricity shortage, wind was providing between 3.5 GW and 4.0 GW of power, demonstrating the importance of developing and maintaining a diverse energy portfolio.
Federal tax and grant incentives and state renewable portfolio standards (RPS) have played important roles in the wind capacity growth for the past four years. In February 2009, federal incentives were expanded and extended to 2012.
Because of its national importance, the energy sector receives research and development (R&D) funding and tax incentives from the U.S. government. Since its inception in 1992, the production tax credit has become one of the most important federal incentives for wind power. The production tax credit provides an income tax credit of 0.022USD/kWh (.016 euro/kWh), adjusted for inflation, for the first 10 years of the wind power project’s operation.
The Emergency Economic Stabilization Act of 2008 (P.L. 110-343) and the Recovery Act of 2009 extended and expanded the federal incentives offered for wind energy, most notably by allowing project owners to elect to receive an investment tax credit instead of a production tax credit.
The investment tax credit allows 30% of the investment in a wind power project to be refunded in the form of reduced income taxes. Both the production and investment tax credits were extended to December 31, 2012. Under Section 1603 of the Recovery Act, the production tax credit may also be taken in the form of an up-front cash grant equivalent to 30% of total project value.
Tax credits are also available to businesses and homeowners who purchase and install qualified small wind systems. Businesses and homeowners can claim 30% of the cost as a tax credit for qualified small wind systems (under 100 KW) through 2017. The Recovery Act also included a 30% credit for investment in new or reequipped facilities that manufacture wind energy equipment, added several grant programs, and extended the eligibility of DOE–issued loan guarantees to include commercial wind power technologies.
In 2010, the DOE finalized a partial loan guarantee to support the 845-MW Caithness Shepherds Flat project, the largest wind farm to receive a loan guarantee under the Financial Institution Partnership Program. According to company estimates, the project will directly employ 400 workers during construction and 35 workers during operation.
The company projects the wind farm will mitigate more than 1.2 million tons of CO2 per year, which is equivalent to the amount of CO2 from approximately 200,000 passenger vehicles.
State and local incentive programs
State-mandated RPS programs require utilities to purchase a percentage of their overall generating capacity from renewable resources. By the end of 2010, RPS programs had been adopted in 47 states. Other market stimulus programs offered by states include grant programs, loan programs, production incentives, and utility resource planning. Green pricing is an optional utility service that supports a greater level of investment in renewable energy technologies.
Participating utility customers pay a premium on their electric bills to cover the additional incremental cost of renewable energy. To date, more than 750 utilities, including investor-owned utilities, municipal utilities, and cooperatives, offer a green pricing option. Premiums vary from 0.002 to 0.116 USD/kWh (0.086 euro/kWh).
The United States faces several major challenges along the path to 20% wind energy by 2030. Investment in the electric transmission system is needed to deliver wind-generated electricity to urban centers, as well as for larger electric load balancing areas, and improved regional planning. The manufacturing supply chain must grow to provide wind turbine components, and a skilled workforce must be trained to staff these facilities.
Advancements in wind turbine technology and manufacturing should decrease capital costs and improve turbine performance. Finally, concerns about wind farm siting, including environmental impacts and social acceptance, must be addressed. DOE is targeting its investments to address these barriers.
Cooperation among federal agencies is breaking down barriers to wind development that were identified in analysis reports such as the 20% Wind Energy by 2030 report and the Large-Scale Offshore Wind Power in the United States assessment issued in 2010. For example, DOE and the U.S. Department of Commerce are collaborating on renewable energy modeling and weather forecasting to improve meteorological, oceanic, and climatological observations and forecasting.
Building on work begun in 2009, the Department of the Interior launched a “Smart from the Start” wind energy initiative in 2010. The initiative will speed offshore wind development on the Atlantic Outer Continental Shelf by facilitating project siting, leasing, and construction, and by working with coastal state governors to identify offshore locations suitable for wind energy development. The accelerated leasing process is being simplified through a regulatory change so that leases may be issued in 2011 or early 2012.
Transmission system planning and analysis is ongoing as potential contributions from wind and solar are being considered. The California Independent System Operator (CAISO) group concluded, in September 2010 , that the state’s grid can reliably accommodate the integration of the renewable energy needed to meet California’s 20% RPS. The study assumed the state grid operator will have a total installed capacity of 2,246 MW of solar and 6,686 MW of wind generation to meet the RPS by 2012. Similar studies at national, regional, and state levels also have found that wind penetrations of 20% to 40% can be reliably accommodated if cost-effective grid reforms are implemented.
