JouleBlog

The wind energy industry in the U.S. had a record-breaking year in 2009, installing 10,000 megawatts of new generating power, enough to serve 2.4 million homes, according to the American Wind Energy Association in its fourth quarter report released today. Yet the industry is still plagued by a lack of manufacturing investment, and job creation still lags. Here is a PDF of the report.

The AWEA credits the American Reinvestment and Recovery Act as the impetus for the growth. During the last quarter the wind added 4000 megawatts of new capacity, together with new construction, operations and management jobs. Texas, the top wind-producing state, added 2292 megawatts in new wind capacity, more than twice that of Indiana, which ranked No. 2, with 905 megawatts added. Arizona opened its first utility scale wind project in 2009.

Yet wind power’s prospects for long-term growth are far from a sure bet. Total investment in manufacturing actually dropped compared to 2008; there were one-third fewer wind power manufacturing facilities in 2009 compared to the year before. This resulted in a net loss of manufacturing jobs, which was compounded by low orders and high inventory.

The weak manufacturing outlook caused AWEA CEO Denise Bode to sound a warning: “U.S. wind turbine manufacturing – the canary in the mine — is down compared to last year’s levels, and needs long-term policy certainty and market pull in order to grow.  We need to set hard targets, in the form of a national Renewable Electricity Standard, in order to provide the necessary stability for manufacturers to expand their U.S. operations and to seize the historic opportunity we have today to build up a thriving renewable energy industry.”

In another development, Detroit Edison and Michigan-based Heritage Sustainable Energy have started commercial operation of a wind farm that will supply the utility’s customers with enough electricity to power about 2,000 homes. The wind farm is the first constructed and operated in Michigan under the state’s energy reform law that will have 10 percent of the utility’s power  generation come from renewable sources such as wind and solar by 2015. The wind farm was built after the utility signed a 20-year agreement to purchase wind power and renewable energy credits from Heritage.

Wind power has grwoth potential with infrastructure investments. Source: NREL

The contribution of wind power to the overall energy mix potentially could grow 10-fold over the next 15 years…but significant infrastructure improvements would be required to make that happen. That’s one of the assumptions underlying a report released by the Department of Energy’s National Renewable Research Laboratory yesterday. The Eastern Wind Integration and Transmission Study (EWITS) is the result of two-and-a-half years of technical research.

EWITS is one of the largest wind integration studies to date. Its purpose is to analyze the economic, operational and technical implications of shifting 20% or more of the Eastern Interconnection’s electrical load to wind energy by the year 2024. The Eastern Interconnection is the nation’s eastern power grid, which accounts for 70% of the electricity consumed in the U.S. A summary of the report is here. A PDF of the full report can be downloaded here (it’s a big file).

The report’s authors acknowledge that the goal of integrating 20% wind seems optimistic. But they maintain that it is possible. Just a few years ago, 5% wind energy penetration was a lofty goal, they note. And some countries in Europe already have achieved wind penetration rates of 10% or higher in short periods of time. So change is possible, but not without planning for that change ahead of time. One reason: building transmission capacity takes much longer than installing wind plants. The report also conveys a  sense of urgency to studying transmission, which is already starting to limit wind growth in certain areas.

“Whether we’re talking about using land-based wind in the Midwest, offshore wind in the East or any combination of wind power resources, any plausible scenario requires transmission infrastructure upgrades and we need to start planning for that immediately,” says David Corbus, NREL project manager for the study.

The EWITS project consists of three major tasks: wind plant output data development, transmission requirements analysis, and wind integration analysis. The research team constructed four high-penetration scenarios to represent different wind generation development possibilities in the Eastern Interconnection. Three delivered wind energy equivalent to 20% of the projected annual electrical energy requirements in 2024; the fourth scenario increased the amount of wind energy to 30%. The scenarios comprise a mix of land-based and offshore wind generation.

Among the key findings are:

• The integration of 20% wind energy is technically feasible, but will require significant expansion of the transmission infrastructure and system operational changes in order for it to be realized;
• Without transmission enhancements, substantial curtailment of wind generation would be required for all 20% wind scenarios studied;
• The relative cost of aggressively expanding the existing transmission grid represents only a small portion of the total annualized costs in any of the scenarios studied;
• Drawing wind energy from a larger geographic area makes it both less expensive and a more reliable energy source;
• Wind energy development is a cost-effective way to reduce carbon emissions – as more wind energy comes online, less energy from fossil-fuel burning plants is required, reducing greenhouse gas emissions;
• Carbon emissions are reduced by similar amounts in all scenarios, indicating that transmission helps to optimize the electrical system and does not result in coal power being shipped from the Midwest to New England States;
• Reduced fossil fuel expenditures more than pay for the increased costs of additional transmission in all high wind scenarios.

“Incorporating high amounts of wind power in the Eastern grid goes a long way towards clean power for the whole country,” says Corbus.  “We can bring more wind power online, but if we don’t have the proper infrastructure to move that power around, it’s like buying a hybrid car and leaving it in the garage.”

Prices of petroleum, natural gas and coal are set to increase after declines during 2009, according to the U.S. Energy Information Agency’s Short-Term Energy Outlook released yesterday. Here are some of the highlights from the report, which is the first to include monthly forecasts through December 2011. A PDF file of the complete report is here.

Global Crude: Global oil demand declined in 2009 for the second consecutive year. The world oil market demand should gradually tighten in 2010 and 2011, in line with the global economic recovery. Non-OPEC oil supply increased in 2009 due to increased production in the U.S., Brazil and the former Soviet Union. The largest source of non-OPEC growth was Brazil, the result of rising offshore and biofuels production. However, these gains were offset by declines in production in the North Sea. OPEC crude oil production will remain high, increasing to 42% of market share in 2011 from 40% last year.

U.S. Liquid Fuels: In the U.S., liquid fuels consumption declined by 4.2% in 2009, with the exception of motor gasoline, which remained the same. Petroleum consumption will rise in 2010 and 2011. Domestic production of ethanol will continue to grow to meet the volume requirements of the Renewable Fuel Standard. For consumers, pump prices for gasoline will pass $3 per gallon this spring and summer. Highway diesel fuel prices, which averaged $2.46 per gallon in 2009, will average $2.98 per gallon in 2010 and $3.14 per gallon in 2011.

Natural Gas: Natural gas usage fell by 1.5% in 2009 due to the recession. Overall natural gas use will be unchanged in 2010, and will grow in 2011 and 2011. Natural gas prices will rise in 2010.

Electricity: U.S. electricity consumption will grow by 1.9% in 2010, driven by an increase in the residential and industrial sector sales. Improving economic conditions in the industrial sector will drive electricity consumption growth in 2010 and 2011 by 2.2% and 2.5%, respectively. Wind, nuclear and coal-fired generation will supply most of this demand growth. Many utilities have made downward fuel cost adjustments recently as a result of lower fuel costs in 2009.  These adjustments have been offset somewhat by the need to increase revenues to cover the capital costs of expanding renewable energy generation.  Overall, forecast residential electricity prices fall by 0.9% in 2010 and increase by 1.4% in 2011.

Coal: Estimated coal consumption by the electric power sector fell by nearly 10% in 2009.  Lower total electricity generation combined with increases in generation from natural gas and hydropower led to the decline in coal consumption.  Anticipated increases in electricity demand and higher natural gas prices will contribute to growth in coal-fired generation in 2010 and 2011.  Forecast coal consumption in the electric power sector increases by almost 4% in 2010.

Carbon Dioxide Emissions: CO₂ emissions from fossil fuels fell by an estimated 6.1% in 2009.  Emissions from coal led the drop in 2009 CO₂ emissions, falling by nearly 11%.  Declines in energy consumption in the industrial sector, a result of the weak economy, and changes in electricity generation sources are the primary reasons for the decline in CO₂ emissions.  Looking forward, projected improvements in the economy contribute to an expected 1.5% increase in CO₂ emissions in 2010.  Increased use of coal in the electric-power sector and continued economic growth, along with the expansion of travel-related petroleum consumption, lead to a 1.7% increase in CO₂ emissions in 2011.  However, even with increases in 2010 and 2011, projected CO₂ emissions in 2011 are still expected to be lower than annual emissions from 1999 through 2008.

President Obama today announced the award of $2.3 billion in new clean manufacturing projects across the United States. The award comes on the heels of a dismal jobs report that 85,000 jobs vanished in December. Employment in manufacturing declined by 27,000, according to the Bureau of Labor Statistics. Since the beginning of the recession manufacturing employment has fallen by 2.1 million.

Today’s announcement may only put a small dent in those massive losses, but at least it is a step to build domestic manufacturing capacity for renewable energy technology. The funds will come in the form of Recovery Act Advanced Energy Manufacturing Tax Credits, which will support 183 projects in 43 states. The investment tax credits are worth up to 30% of each planned project. It’s estimated that the tax credits will leverage private capital for a total investment of $7.7 billion in high-tech manufacturing in the U.S.

The projects include:

• Itron, Inc., which manufactures a smart meter for the residential market.
• W.L. Gore & Associates,, Inc., which produces a membrane for fuel cells for buildings and vehicles.
• PPG Industries, Inc., which produces a double anti-reflective coating for glass to make solar sells more efficient.
• TPI Composites, Inc., which is building a new manufacturing facility in Nebraska to produce composite wind turbine blades.

The projects selected for the tax credit will be in service by 2014; about a third of the projects will be completed this year. The 183 projects selected today will produce solar, wind and geothermal energy equipment; fuel cells, microturbines and batteries; electric cars; electric grids to support renewable energy; energy conservation technologies; and equipment that captures and sequesters carbon dioxide or reduces greenhouse gas emissions. A full list of the selected projects is here.

Source: Cielo Wind Power

At a time of tight lending by U.S. banks, commercial banks in China have stepped in to put up $1.5 billion for a giant wind farm in West Texas. The project is a joint venture between Austin, Texas-based Cielo Wind Power LP, private equity firm U.S. Renewable Energy Group, and China’s Shenyang Power Group, which will receive the funding through the commercial banks in China. The Associated Press quotes Cappy McGarr, managing director of the U.S. Renewable Group, as saying  the project will also tap into U.S. stimulus funding for renewable energy.

The JV partners say the project is the largest-ever joint U.S.-China investment in renewable energy in America. The 36,000-acre wind farm will have the power to provide electricity to 180,000 homes. A-Power Energy Generation Systems, Ltd., will supply 240 units of the 2.4 megawatt wind turbines, which will be manufactured at A-Power’s facilities in Shenyang, China. A-Power is a shareholder in Shenyang Power Group. A-Power will begin manufacturing the turbines next March and will deliver all 240 turbines by March 2011.

The joint venture says a lot about the positive role of much-needed for stimulus spending and the damage that tight credit continues to have on this economy. Manufacturing has rebounded in China, where it has benefitted from a massive stimulus package. In July T. Boone Pickens’ company, Mesa Power,  dropped its plans for a 4,000 megawatt wind farm in Texas, pinning the decision on tight credit and low natural gas prices. The American Wind Energy Association said last week that in its third quarter the U.S. wind energy industry installed 1,649 megawatts of generating power, an increase compared to the previous quarter. But manufacturing still lagged below 2008 levels.

The U.S. wind industry installed 1,649 megawatts of power generating power during the third quarter, according to the third quarter market report of the American Wind Energy Association. The wind industry so far has added 5,800 megawatts of total capacity. The amount of added capacity during the third quarter is higher than the second quarter of 2009 or the third quarter of 2008.

Yet the AWEA says that wind turbine manufacturing lags behind 2008 levels, both in production and in new announcements–not surprising during this recession but still disappointing.

Wind power installations are up, and that is good news for America’s economy, environment, and energy security,” said AWEA CEO Denise Bode. “But manufacturing, which has the potential to employ many more Americans in good, clean energy jobs, remains uncertain. A firm, long-term national commitment to renewable energy is still needed for the U.S. to become a wind turbine manufacturing powerhouse and create hundreds of thousands of jobs.

Furthermore, AWEA doesn’t expect the fourth quarter of this year to be as strong as the fourth quarter of 2008 since the 5,000 megawatts now under construction is nearly 38% lower than the over 8,000 megawatts under construction at this time last year.

Arizona, which just installed its first utility-scale project, posted the highest wind power growth rate in the third quarter. Texas far outstripped any other state, both in additions of new wind power capacity during the third quarter and total wind operating capacity.

Source: GreenUnivers

A French start-up company, Aeolus Water, says it has developed a wind turbine that draws fresh water from air, producing up to 500 gallons in 24 hours. As noted on the Cleantech Group’s Web site, the company has built a prototype wind turbine 14 meters high with an 8.5-meter turbine. The company is now seeking financial partners. A description (in French) of the turbine appears on the GreenUnivers blog.

The Department of Energy yesterday announced a private sector partnership aimed at accelerating renewable energy projects. The agency will provide up to $750 million in funding from the American Recovery and Reinvestment Act to cover the cost of loan guarantees which could support as much as $4 to 8 billion in lending to eligible projects. The DOE said it will invite private sector participation to accelerate the financing of these renewable energy projects.

To accelerate the loan application process the agency announced the creation of its new Financial Institution Partnership Program (FIPP), a streamlined set of standards designed to expedite DOE’s loan guarantee underwriting process and leverage private sector capital for funding of eligible projects. The first solicitation under the new program will seek loan guarantee applications for conventional renewable energy generation projects, such as wind, solar, biomass, geothermal and hydropower.

Under this first FIPP solicitation, proposed borrowers and project sponsors do not apply directly to DOE but instead work with financial institutions satisfying the qualifications of an eligible lender which may apply directly to DOE to access a loan guarantee. The FIPP solicitation is the eighth round of solicitations issued by the Department’s Loan Guarantee Program since its inception.

Maine’s first-ever wind power conference that was held yesterday attracted about 350 attendees, but also drew protesters.

Governor John E. Baldacci provided opening remarks to start a day-long conference. Maine is something of a regional wind powerhouse, supplying about 95% of the wind power in New England, according to the governor. Last month, he led a Renewable Energy Trade Mission to Spain and Germany and visited a deep-water offshore wind platform in Norway.

“Maine is blessed with abundant natural resources and the research going on at the University of Maine puts us in an excellent position for success,” he said. “Growing partnerships across the public and private sectors remains a key component to realizing these goals. We want to move aggressively, while maintaining our commitment to community involvement; and being sensitive to environmental impacts with a thoughtful siting process.”

Baldacci also said the success of wind energy development hinges on partnerships with and among Maine communities. He gave two recent examples of communities that have approved wind power projects.

Not all Maine residents are on board with his message, though, as summed up in a news story posted on wmtv.com:

The conference also drew about a dozen demonstrators. Some opponents said they believe green power growth is good but they don’t necessarily want it in their back yard.

“We believe in wind turbines in a proper location. We don’t believe the scenic pond, such as Roxbury, is a proper location,” said Tom Currivan, from Concerned Citizens to Save Roxbury.

“This process of big wind going on in this state is being pushed on numerous communities because they are vulnerable,” said Gary Steinburg, from Friends of Lincoln Lake.

A leader, Steve Thurston, of Roxbury, said erecting all the windmills needed to meet Maine’s goals will have a devastating impact on the state’s mountains.

Cleantech, a catchall term for alternative energy, efficient power distribution and energy storage, is set to become the dominant investment for venture capital over the next few years, surpassing biotechnology and software, according to an article in the New York Times today. The Obama administration has pledged to $150 billion over the next decade, which it says could create 5 million jobs–far short of the 7.2 jobs wiped out during this recession. And if that were to happen, it would require massive retraining of the right skills.

Still, it’s encouraging to see cleantech generating excitement among investors. As noted by the Times, the successful start-ups today could be the big players tomorrow:

• GreatPoint Energy, which has developed a cheaper way to convert coal into natural gas. The company plans to break ground on a power plant in Houston next year. It counts Suncor Energy, Peabody Energy and Dow Chemical Co. as its investors.
• A123 Systems, a supplier of lithium ion batteries for electric cars.
• Tendril Networks, which develops software that links utilities to “smart” appliances in the home.

Things a moving along on the wind front as well. Today Duke Energy and the University of North Carolina at Chapel Hill announced they have signed a contract to place up to three demonstration wind turbines in the Pamlico Sound. The demonstration turbines may be the first turbines placed in water in the United States, according to the press release. Duke Energy will pay for the turbines and their installation. The turbines builds on a nine-month study completed in June 2009 by UNC for the North Carolina General Assembly which found “North Carolina is well positioned to develop utility-scale wind energy production.”