Facts on Energy: Wind

U.S. Wind Statistics

  • In 2007, wind represented 0.3% of all energy consumed in the US.[1]
  • In 2007, wind represented 0.8% of all electricity generated in the US.[2]
  • In 2007, wind generating capacity in the U.S. totaled 15.6 gigawatts and generated 32.1 million megawatt hours with an average capacity factor of 23.5 percent.[3] Wind turbines generated only a percentage of their theoretical maximum output due to their intermittency (the wind does not always blow). Natural gas and coal-fired units, in contrast, with flexible maintenance schedules, were both available for production an average of 88 percent of all hours in 2006.[4]
  • Due to state mandates highlighted below, the Energy Information Administration projects wind capacity to increase to 25.7 gigawatts by 2010, 29.7 gigawatts by 2015, 33.7 gigawatts by 2020, 37.4 gigawatts by 2025, and 40.4 gigawatts by 2030. Generation from wind is projected to increase to 74.2 billion kilowatt hours by 2010, 87.3 billion kilowatt hours by 2015, 101.4 billion kilowatt hours by 2020, 113.4 billion kilowatt hours by 2025, and 123.6 billion kilowatt hours by 2030. This level of projected wind generation in 2030 represents 2.4 percent of total U.S. electricity generation.[5]
  • The U.S. Department of Energy’s Energy Efficiency and Renewable Energy (EERE) report “20% Wind Energy by 2030” (2008) envisioned production that is 9 times more than the generation level that EIA is projecting.[6] This would require, according to the DOE, 293 gigawatts of new wind capacity (or over 13,000 megawatts of new wind turbines) each year. This growth level—each and every year—almost equals the total installed wind capacity in the U.S. in 2007. This growth in wind turbine capacity would require siting wind units on publicly owned lands where a large percentage of the development sites are located, continued taxpayer-funded subsidies, the building of power lines to remote areas where wind turbines are located, and the public acceptance of noise and other wind-related effects. Since wind is intermittent, the wind capacity would also need to be backed-up with reliable capacity, most likely from fossil fuels, adding additional cost and reducing the carbon dioxide benefits of introducing this level of wind energy. The DOE analysis is also predicated on the assumption of very high capacity factors for wind of more than 40 percent. The experience of wind in Texas highlighted below does not support capacity factors at that level, although such technology is improving (along with the technology of conventional energies).[7]
  • Because wind power is available a relatively small fraction of the time, typical statements about how a wind unit can produce enough electricity to serve a large number of homes are misleading.[8] Since that wind unit cannot supply power continuously or even upon customer demand due to intermittency, dispatchable generators (usually fossil-fuel) are required to provide back-up power to the system to maintain reliability.[9] Wind on average serves fewer homes than advertised, and on hot summer days wind can serve far fewer still.

U.S. Transmission Statistics

· Total spending on new transmission by all investor-owned utilities in 2006 [current dollars] was $6.9 billion.[10]

  • There is currently no available estimate of the total cost of new transmission that will be required to move power from future wind installations to consuming areas. However, figures for California and Texas alone (see below) suggest that large spending increases will be required nationally.

U.S. Wind Subsidies

  • The Energy Information Administration estimates that total Federal subsidies for electric production for fiscal year 2007 from wind power are $23.37 per megawatt hour, compared to 44 cents for traditional coal, 25 cents for natural gas and petroleum liquids, 67 cents for hydroelectric power, and $1.59 for nuclear.[11] For wind power, these subsidies include a production tax credit of 2.0 cents per kilowatt-hour.[12] However, they do not include accelerated depreciation, (a five-year write-off), a favorable accounting treatment that wind developers receive. (Figures are in 2007 dollars.)
  • According to the General Accounting Office, in fiscal year 2007, wind received 2.8 percent of all federal research subsidies to power generation but produced only 0.4 percent of U.S. electricity. Per kilowatt-hour, this was 14.7 times higher than the amount allocated to coal, most of which was spent to develop cleaner technologies. Coal produced 51.4 percent of all U.S. electricity in fiscal year 2007.[13]
  • Approximately nine percent of electricity generated is lost in its transmission and distribution from power plants to end-use consumers (also called “line losses”).[14] Given that the production tax credit for wind is based on electricity generated, not sold, the PTC is actually costing taxpayers and consumers more than its current value of 2 cents per kilowatt-hour since one-tenth of that electricity is not reaching consumers. Also, wind is an inefficient user of transmission because capacity must be available to handle the full rated output of turbines but wind turbines run at full capacity only a small portion of time.

U.S. Policies Affecting Wind

  • While no federal renewable portfolio standard (RPS) exists, 25 states and the District of Columbia have a renewable portfolio standard mandating a certain percentage of a utility’s power plant capacity or generation to come from renewable sources by a certain date.[15] However, most States are out of compliance with their own program due to issues with their RPS formulation, reporting mechanisms, monitoring, and exaction of penalties for non-compliance.[16] (Texas is the major exception.) Wind is the technology that generally benefits the most from an RPS since it has lower costs than many other renewable generating technologies, particularly when subsidies are included.
  • The federal production tax credit (PTC) for wind was first introduced as part of the Energy Policy Act of 1992. It was defined as a 1.5-cents-per-kilowatthour payment (adjusted annually for inflation), available for 10 years to investors for facilities placed in service between 1994 and June 30, 1999. The PTC for wind has expired and been reinstated several times since its origination. It is currently slated to expire on December 31, 2008 based on the Tax Relief and Health Care Act of 2006.[17]

What Does Wind Cost?

  • The Energy Information Administration assumes the total overnight capital cost of an onshore wind turbine to be $1,497 per kilowatt (in 2008 dollars) and that of an offshore wind unit to be $2,998 per kilowatt.[18] These costs are below the estimated cost made by the National Association of Manufacturers (NAM) and the American Council for Capital Formation (ACCF) of $2000 per kilowatt for onshore units and $3800 per kilowatt for offshore units (also in 2008 dollars).[19].
  • The Energy information Administration calculates the levelized cost of generating technologies, which is the present value of the total cost of building and operating a generating plant over its financial life, converted to equal annual payments and amortized over expected annual generation. In 2015, the levelized cost of onshore wind is 82.5 mills per kilowatt hour (8.25 cents per kilowatt hour) in 2006 dollars. This cost is higher than that of pulverized coal, coal-fired integrated gasification combined cycle, natural gas combined cycle, and advanced nuclear, all of which have levelized costs between 60 and 70 mills per kilowatt hour.[20] Were the production tax credit of around 2 cents per kilowatt hour (20 mills per kilowatt) included, wind would be competitive with these other technologies. As stated above, the production tax credit expires at the end of 2008. Increases in wind capacity in the EIA analysis are due to State mandates.
  • A report by the Lawrence Berkley laboratory sampled recently built wind units in the United States. Among the sample of projects built in 2007, reported installed costs ranged from $1,240/kilowatt to $2,600/kilowatt, with an average cost of $1,710/kilowatt.[21]

Climate and Land Mass

  • If ten percent of the nation’s power is produced by wind, it will reduce electricity’s carbon emissions by approximately 6 percent. Coal-burning generators that emit the most carbon will be base-loaded and operating most of the time, while production by lower-emitting gas-fired units will vary to make up for wind’s intermittency.[22]
  • For comparison purposes, and taking into account capacity (or load factors), the land area covered by a wind power station of the same energy output as a nuclear power station would be about 2,000 times as great (or an area of land 20km by 25km would be covered by wind turbines to produce the same electrical output as one nuclear power station occupying an area of land 500m square).[23]

Texas

  • In 2007, wind capacity in Texas was 4006 megawatts.[24]
  • In 2006, Texas led the nation in wind capacity (2738 megawatts) or 24% of the total wind capacity in the US. Total US wind capacity in 2006 was 11,329 megawatts.[25]
  • Texas law requires that 5,880 MW of new renewable generation be built in the state by 2015, which will meet about 5 percent of the state’s projected electricity demand. The legislation also sets a cumulative target of installing 10,000 MW of renewable generation capacity by 2025. The measure also includes a requirement that the state must meet 500 MW of the 2025 target with non-wind renewable generation.[26]
  • In 2006 (the most recent year available), wind represented 2.7 percent of the state’s total capacity of 100,754 megawatts, yet wind produced 1.7 percent of the state’s electricity that year.[27]
  • The average output of wind turbines during Electric Reliability Council of Texas (ERCOT) system peaks (from 4 pm to 6 pm in July and August) was 16.8 percent of capacity. However, for any hour during these months, the output of the wind turbines could range from zero to 49 percent of installed capacity.[28] Because the use of an average number would be too optimistic due to the intermittency of wind, ERCOT assigns 8.7 percent of the installed capacity of wind turbines to its calculation of the ERCOT peak capacity reserve margin, based on a study of the effective load serving capability of wind.[29]
  • The estimated cost for building transmission capacity in ERCOT to support new wind farms in the Competitive Renewable Energy Zones is $2.95 billion for the lowest cost plan (for 12 gigawatts) and from $3.78 billion to $6.38 billion for expandable plans, supporting 12 gigawatts of new wind capacity at the low cost end and 25 gigawatts at the high cost end of the range. Figures are as of 4/15/08.[30]
  • Most recently, Texas State officials approved a $4.9 billion wind power project that will add more than 2,000 miles of heavy duty transmission lines from wind centers in West Texas to major population hubs in Austin, Dallas-Fort Worth, and Houston, among others. This will result in a $4 a month increase in the electricity bills of Texas consumers.[31]

California

  • The California Energy Commission has estimated that its requirement of 33 percent renewables in 2020 will entail $5.7 billion in new 500 and 230 kV transmission lines alone, in addition to lower-voltage lines, substations, and reactive power supplies. The figure does not include lines associated with new or upgraded conventional generation.[32]
  • In 2007, wind capacity in California was 2320 megawatts.[33]
  • In 2006 (the most recent year available), California’s wind capacity represented 3.6 percent of its total generating capacity of 63,213 megawatts. It produced 2.3 percent of the state’s electricity that year.[34]
  • In 2006, California’s wind capacity was second in the nation with 2255 megawatts or 20 percent of the total wind capacity in the US. Total US wind capacity in 2006 was 11,329 megawatts.[35]

International

  • World installed capacity for wind was 59,051 megawatts (mostly data for 2005) with a capacity factor of 19.6 percent.[36]
  • Denmark, a country with over 6,000 wind turbines, many offshore, finds that it needs to import electricity due to the intermittency of its wind generating units and export the wind power. In 2003, 84 percent of western Denmark’s wind-generated electricity was exported at a revenue loss. Denmark’s conventional power plants are generally run at full capacity backing-up their wind units. When the wind does blow, the wind power is usually surplus and exported to other countries at a discounted price.[37]
[1] Energy Information Administration (EIA), Monthly Energy Review (MER), Table 1.2, http://www.eia.doe.gov/emeu/mer/pdf/pages/sec1_5.pdf .

[2] Energy Information Administration, Monthly Energy Review, Table 7.2a, http://www.eia.doe.gov/emeu/mer/pdf/pages/sec7_5.pdf

[3] Energy Information Administration, Annual Energy Review, http://www.eia.doe.gov/emeu/aer/pdf/pages/sec8_8.pdf and http://www.eia.doe.gov/emeu/aer/pdf/pages/sec8_42.pdf .

[4]North American Electric Reliability Council, http://www.nerc.com/page.php?cid=4|43|47.

[5] Energy Information Administration, Annual Energy Outlook 2008, Tables A8 and A16, pages 131 and 142, http://www.eia.doe.gov/oiaf/aeo/index.html .

[6] DOE, EERE, “20% Wind Energy by 2030”, May 2008, http://www1.eere.energy.gov/windandhydro/pdfs/41869.pdf

[7] “U.S. DOE Report “20% Wind Energy by 2030” Presents Implausible Scenario,” http://www.windaction.org/releases/16239 .

[8] http://www.statesman.com/news/content/news/stories/local/07/18/0718wind.html

[9]Electricity Reliability Council of Texas, http://www.ercot.com/news/presentations/2006/RenewablesTransmissi.pdf

[10] Edison Electric Institute, Actual and Planned Transmission Investment by Shareholder-Owned Utilities, 2000-2009. http://www.eei.org/common/images/industry_issues/Energy_Data_Alert/bar_Transmission_Invest ment.jpg.

[11] Energy Information Administration, Federal Financial Interventions and Subsidies in Energy Markets 2007, http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/chap5.pdf, Table 35

[12] Energy Information Administration, Assumptions to the Annual Energy Outlook 2008, page 155, http://www.eia.doe.gov/oiaf/aeo/assumption/pdf/renewable.pdf

[13] General Accounting Office, Federal Electricity Subsidies, Oct. 2007, page 21, http://www.gao.gov/new.items/d08102.pdf

[14] Energy Information Administration, Annual Energy Review 2007, page 62, http://www.eia.doe.gov/emeu/aer/pdf/pages/secnote2.pdf .

[15] Energy Information Administration, Annual Energy Outlook 2008, page 27, http://www.eia.doe.gov/oiaf/aeo/index.html.

[16] “A National Renewable Portfolio Standard: Politically Correct, Economically Suspect,” Robert J. Michaels, April 2008 Electricity Journal.

[17] Energy Information Administration, Federal Financial Interventions and Subsidies in Energy Markets 2007, http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/index.html .

[18] Energy Information Administration, Assumptions to the Annual Energy Outlook 2008, Table 38, page 79, http://www.eia.doe.gov/oiaf/aeo/assumption/index.html.

[19] American Council for Capital Formation/National Association of Manufacturers Study of the Economic Impact of the Lieberman-Warner Climate Security Act, http://www.accf.org/nam.html .

[20] Email from J. Beamon, Energy Information Administration, to M. Hutzler, Institute for Energy Research, August 8, 2008.

[21] U.S. Department of Energy, Energy Efficiency and Renewable Energy, Annual Report on U.S. Wind Power Installation, Cost, and Performance Trends: 2007, http://www.eere.energy.gov/windandhydro/windpoweringamerica/pdfs/2007_annual_wind_market_r eport.pdf.

[22] Karen Palmer and Dallas Burtraw,”Cost-effectiveness of Renewable Energy Policies,” Energy Economics 27 (2005), 882.

[23] “Evidence to the House of Lords Economic Affairs Committee Inquiry into ‘The Economics of Renewable Energy’,” Memorandum by Dr. Phillip Bratby, May 15, 2008, http://www.parliament.uk/parliamentary_committees/lords_economic_affairs/eaffwrevid.cfm.

[24] Email from R. Schnapp, Energy Information Administration (EIA), to M. Hutzler, Institute for Energy Research (IER), July 10, 2008, based on EIA capacity forms.

[25] EIA, Renewable Energy Annual, Table 1.24, http://www.eia.doe.gov/cneaf/solar.renewables/page/rea_data/table1_24.pdf

[26] http://www.pewclimate.org/node/1303

[27] Energy Information Administration, Texas Renewable Electricity Profile: http://www.eia.doe.gov/cneaf/solar.renewables/page/state_profiles/texas.html

[28] Issues Associated with Renewable Energy in Texas, Informal White Paper for the Texas Legislature, Mar. 28, 2005, page 7, at http://www.ercot.com/news/presentations/2006/RenewablesTransmissi.pdf

[29] Electric Reliability Council of Texas (ERCOT) press release (May 16, 2008), “ERCOT Expects Adequate Power Supplies for Summer,”  http://www.ercot.com/news/press_releases/2008/nr-5-16-08 .

[30] Electric Reliability Council of Texas (ERCOT), http://www.ercot.com/meetings/board/keydocs/2008/B0415/Item_6_-_CREZ_Transmission_Report_to_PUC_-_Woodfin_Bojorquez.pdf

[31] http://www.statesman.com/news/content/news/stories/local/07/18/0718wind.html

[32] California Energy Commission, Intermittency Analysis Project: Summary of Final Results, CEC 500-2007-081 (2007) at 26. http://www.energy.ca.gov/2007publications/CEC-500-2007-081/CEC-500-2007-081.PDF.

[33] Email from G. McGrath , Energy Information Administration (EIA), to M. Hutzler, Institute for Energy Research, July 11, 2008, based on EIA capacity forms.

[34] Energy Information Administration, California Renewable Electricity Profile: http://www.eia.doe.gov/cneaf/solar.renewables/page/state_profiles/california.html

[35]Energy Information Administration, Renewable Energy Annual, Table 1.24, http://www.eia.doe.gov/cneaf/solar.renewables/page/rea_data/table1_24.pdf

[36] http://lightbucket.wordpress.com/2008/03/13/the-capacity-factor-of-wind-power/. Data are tabulated from a number of sources.

[37] http://www.aweo.org/ProblemWithWind.html