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Making Our  Renewable Energy Future  a Reality Randall Swisher Green Energy Summit March 25, 2010
Four Steps to Changing the World <ul><li>Vision </li></ul><ul><li>Analysis </li></ul><ul><li>Strategy </li></ul><ul><li>Im...
A Short History of the U.S. Wind Industry <ul><li>Start in the early 1970’s – the era of the first Arab oil embargo </li><...
<ul><li>Heronemus founded the UMass alternative energy engineering program, was a pioneer of the wind farm concept and off...
What Heronemus Got Wrong <ul><li>The magnitude of the challenge </li></ul><ul><ul><li>Trillions of dollars of capital inve...
Late 70’s Policy Provided a Foundation <ul><li>Federal Renewable Energy R&D Program </li></ul><ul><li>Public Utility Regul...
Business Growth Followed: In the 1980s, the U.S. led the World in Wind Technology <ul><li>The first successful wind farms ...
But Turning Vision to Reality was Tough <ul><li>Harnessing the wind was tougher than it looks </li></ul><ul><li>First Cali...
Policies Abandoned: We Turned our Backs on the Opportunity <ul><li>The DOE Wind R&D budget was cut 90% through the 1980s <...
Europe Took the Lead in the 1990s <ul><li>Strong market incentives in Denmark, Germany and Spain led to a thriving turbine...
Today, the Global Industry has Three Key Markets <ul><li>Europe – 76,000 MW (end of 2009) </li></ul><ul><ul><li>Most manuf...
The Present: What is Today’s Vision? . . . And the analysis to support it
20% Wind Energy by 2030 <ul><li>U.S. Department of Energy:  </li></ul><ul><li>“ The U.S. possesses sufficient and affordab...
The 20% Technical Report <ul><li>Compares two scenarios - 20% wind energy by 2030 vs. no new U.S. wind power capacity </li...
Assumptions: The 20% Wind Energy Scenario <ul><li>U.S. electricity consumption grows 39% from 2005 to 2030 – to 5.8 billio...
20% Wind Energy by 2030 Installed Capacity at year end 2009 is greater than 35 GW;  3 years ahead of schedule 305 GW
20% Wind:  Electricity Sector Costs <ul><li>Both scenarios cost over $2 trillion in new investment in net present value te...
Savings from Reduced Natural Gas Price Pressure   The benefits from reduced pressure on natural gas prices across all gas ...
20% Wind Impact on Generation Mix in 2030 <ul><li>Reduces electric utility natural gas consumption by 50% </li></ul><ul><l...
What is the Strategy to achieve 20% Wind? . . . Understand and overcome the barriers
Here are key steps to 20% Wind <ul><li>Long-term stable policy </li></ul><ul><li>Transmission infrastructure* </li></ul><u...
<ul><li>The lack of transmission infrastructure is the single greatest long-term strategic constraint facing the wind indu...
Green Power Superhighways <ul><li>Link areas with vast supplies of renewables to areas of high electricity demand green po...
<ul><li>If you want more wind & solar: </li></ul><ul><ul><li>Develop a robust transmission grid </li></ul></ul><ul><ul><li...
Achieving Our  Sustainable Energy Future
The Way Forward <ul><li>The 20% Wind analysis and plan is a one important piece of the renewable energy vision, but it is ...
A Bigger Picture Analysis and Strategy <ul><li>NREL is now developing a detailed analysis of the feasibility of 80% renewa...
The Renewable Energy Vision isn’t Guaranteed <ul><li>Competing visions are dueling in the courts of public opinion and pub...
State Action <ul><li>Finally, central to the progress that has gotten us to this point is effective state action – the sta...
<ul><li>WINDPOWER 2010 </li></ul><ul><li>Largest Wind Power  </li></ul><ul><li>Conference on the Planet! </li></ul><ul><li...
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Wisconsin Green Energy Summit Swisher

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Wisconsin Green Energy Summit Swisher

  1. 1. Making Our Renewable Energy Future a Reality Randall Swisher Green Energy Summit March 25, 2010
  2. 2. Four Steps to Changing the World <ul><li>Vision </li></ul><ul><li>Analysis </li></ul><ul><li>Strategy </li></ul><ul><li>Implementation </li></ul><ul><ul><li>Based on wind but </li></ul></ul><ul><ul><li>applies to broader </li></ul></ul><ul><ul><li>energy picture </li></ul></ul>
  3. 3. A Short History of the U.S. Wind Industry <ul><li>Start in the early 1970’s – the era of the first Arab oil embargo </li></ul><ul><li>An important renewable energy visionary of that time was William Heronemus </li></ul>Smith-Putnam Turbine 1941-45 Castleton, Vt.
  4. 4. <ul><li>Heronemus founded the UMass alternative energy engineering program, was a pioneer of the wind farm concept and offshore wind power </li></ul><ul><li>His vision: 300,000 wind turbines on the Great Plains providing 10-15% of the nation’s electricity </li></ul><ul><li>“ It would not be foolish at all to state that this country could be totally energized by solar energy and other renewable processes by the year 2000.” - William Heronemus, 1973, before a U.S. Senate subcommittee </li></ul>Bill Heronemus: 1970’s Renewables Visionary
  5. 5. What Heronemus Got Wrong <ul><li>The magnitude of the challenge </li></ul><ul><ul><li>Trillions of dollars of capital investment </li></ul></ul><ul><li>Renewable technologies weren’t ready for prime time in the 1970’s </li></ul><ul><ul><li>But his vision of the future was remarkably prescient </li></ul></ul>
  6. 6. Late 70’s Policy Provided a Foundation <ul><li>Federal Renewable Energy R&D Program </li></ul><ul><li>Public Utility Regulatory Policies Act of 1978 (PURPA) </li></ul><ul><ul><li>Requires utilities to buy electricity from renewable and cogeneration facilities </li></ul></ul><ul><li>Energy Tax Act of 1978 </li></ul><ul><ul><li>Creates 15% Energy Investment Tax Credit (EITC) </li></ul></ul><ul><ul><li>Added to existing 10% ITC </li></ul></ul><ul><ul><li>Limited Partnership Structure -> Wind Farms </li></ul></ul><ul><li>California policy </li></ul><ul><ul><li>Tax incentives </li></ul></ul><ul><ul><li>Strong regulatory support </li></ul></ul><ul><ul><ul><li>Standard offer contracts gave birth to the renewables industries </li></ul></ul></ul>
  7. 7. Business Growth Followed: In the 1980s, the U.S. led the World in Wind Technology <ul><li>The first successful wind farms were established in 1981 in California </li></ul><ul><li>Many U.S. turbine manufacturers were established in the early 80s </li></ul><ul><li>By 1989, the U.S. was home to 85% of the world’s installed wind capacity </li></ul><ul><ul><li>almost all in California </li></ul></ul><ul><ul><li>and a leading manufacturer: US Windpower (founded in 1976) that led sophisticated outreach to the electric utility industry </li></ul></ul>
  8. 8. But Turning Vision to Reality was Tough <ul><li>Harnessing the wind was tougher than it looks </li></ul><ul><li>First California Wind Farms – 1981 </li></ul><ul><ul><li>Poor performance - very low capacity factors </li></ul></ul><ul><ul><li>But provided a successful laboratory – some turbines worked, some didn’t, but they rapidly improved </li></ul></ul><ul><li>Building strong companies was a challenge – </li></ul><ul><ul><li>Most undercapitalized </li></ul></ul><ul><ul><li>Lacked a good balance between engineering and business skills </li></ul></ul><ul><ul><li>Limited knowledge of the utility industry </li></ul></ul>
  9. 9. Policies Abandoned: We Turned our Backs on the Opportunity <ul><li>The DOE Wind R&D budget was cut 90% through the 1980s </li></ul><ul><li>The wind investment tax credit was abruptly ended in 1986 </li></ul><ul><ul><li>Most U.S. turbine manufacturers went out of business – no market </li></ul></ul><ul><ul><li>In 1989, the domestic wind market was lifeless . . . And seven years later US Windpower was bankrupt </li></ul></ul><ul><li>Imagine the WINDPOWER ’89 Conference . . . </li></ul>
  10. 10. Europe Took the Lead in the 1990s <ul><li>Strong market incentives in Denmark, Germany and Spain led to a thriving turbine manufacturing industry </li></ul><ul><ul><li>Wind now provides over 20% of Denmark’s electricity </li></ul></ul><ul><ul><li>Germany was the largest single wind market until 2008 </li></ul></ul><ul><ul><li>This European leadership spurred technology development & made possible wind’s ability to compete with fossil generation in the U.S. </li></ul></ul><ul><li>In the mid-90s, state policy in Minnesota and Iowa led to a rebirth of the U.S. wind market </li></ul>
  11. 11. Today, the Global Industry has Three Key Markets <ul><li>Europe – 76,000 MW (end of 2009) </li></ul><ul><ul><li>Most manufacturers based in Europe </li></ul></ul><ul><li>North America – 38,500 MW </li></ul><ul><ul><li>The U.S. is now the largest single market, and all major global companies want to participate </li></ul></ul><ul><li>Asia – 39,000 MW </li></ul><ul><ul><li>Chinese market growing most quickly, and establishing a strong manufacturing base </li></ul></ul>
  12. 12. The Present: What is Today’s Vision? . . . And the analysis to support it
  13. 13. 20% Wind Energy by 2030 <ul><li>U.S. Department of Energy: </li></ul><ul><li>“ The U.S. possesses sufficient and affordable wind resources to obtain at least 20% of its electricity from wind by the year 2030.” </li></ul><ul><li>www.20percentwind.org </li></ul>
  14. 14. The 20% Technical Report <ul><li>Compares two scenarios - 20% wind energy by 2030 vs. no new U.S. wind power capacity </li></ul><ul><li>Not a prediction - an analysis based on one scenario </li></ul><ul><li>Is the work of more than 100 individuals involved from 2006 - 2008 (government, industry, utilities, NGOs) </li></ul><ul><ul><li>NREL – analytical foundation/their model </li></ul></ul><ul><ul><li>Black & Veatch – input assumptions/market data on cost </li></ul></ul>
  15. 15. Assumptions: The 20% Wind Energy Scenario <ul><li>U.S. electricity consumption grows 39% from 2005 to 2030 – to 5.8 billion MWh (Source: EIA) </li></ul><ul><li>20% wind electricity requires about 300 GW (300,000 MW) of wind generation </li></ul><ul><li>Technology will continue to improve: Productivity of wind turbines increases about 15% by 2030 </li></ul><ul><ul><li>This is an extremely conservative assumption </li></ul></ul><ul><li>No technology breakthroughs required: 20% wind can be achieved with existing wind technology </li></ul>
  16. 16. 20% Wind Energy by 2030 Installed Capacity at year end 2009 is greater than 35 GW; 3 years ahead of schedule 305 GW
  17. 17. 20% Wind: Electricity Sector Costs <ul><li>Both scenarios cost over $2 trillion in new investment in net present value terms by 2030 </li></ul><ul><li>20% Wind Scenario requires only 2% more investment ($43 billion in net present value) </li></ul>
  18. 18. Savings from Reduced Natural Gas Price Pressure The benefits from reduced pressure on natural gas prices across all gas users would be $150 billion (NPV), by itself exceeding the incremental cost of investing in the 20% Wind Scenario. *NPV Source: Hand et al., 2008 Billions of Dollars* 0 20 40 60 80 100 120 140 160 Incremental C ost Natural Gas Savings
  19. 19. 20% Wind Impact on Generation Mix in 2030 <ul><li>Reduces electric utility natural gas consumption by 50% </li></ul><ul><li>Reduces total natural gas consumption by 11% </li></ul><ul><li>Natural gas consumer benefits: $86-214 billion * </li></ul><ul><li>Reduces electric utility coal consumption by 18% </li></ul><ul><li>Avoids construction of 80 GW of new coal power plants </li></ul>U.S. electrical energy mix Source *: Hand et al., 2008
  20. 20. What is the Strategy to achieve 20% Wind? . . . Understand and overcome the barriers
  21. 21. Here are key steps to 20% Wind <ul><li>Long-term stable policy </li></ul><ul><li>Transmission infrastructure* </li></ul><ul><li>Better electric system planning* </li></ul><ul><li>Continue reducing the cost of wind </li></ul><ul><li>Ensure wind’s environmental and other impacts are minimized </li></ul><ul><ul><li>Systematic and streamlined siting and permitting </li></ul></ul><ul><li>Workforce development </li></ul><ul><li>Overcome information barriers </li></ul>
  22. 22. <ul><li>The lack of transmission infrastructure is the single greatest long-term strategic constraint facing the wind industry. </li></ul><ul><li>There is a growing recognition of this barrier by policymakers . . . and a growing number of companies are moving to address the need. </li></ul>Barrier 2: Transmission Infrastructure
  23. 23. Green Power Superhighways <ul><li>Link areas with vast supplies of renewables to areas of high electricity demand green power superhighways </li></ul><ul><li>Improve grid operations </li></ul>
  24. 24. <ul><li>If you want more wind & solar: </li></ul><ul><ul><li>Develop a robust transmission grid </li></ul></ul><ul><ul><li>Shape a more flexible power system </li></ul></ul><ul><ul><li>Coordinate or consolidate electric operations on a regional basis </li></ul></ul><ul><ul><ul><li>Spread wind projects over a larger geographic area </li></ul></ul></ul><ul><ul><li>Forecast the wind to reduce costs and uncertainty </li></ul></ul>Barrier 3: Improving Grid Operations
  25. 25. Achieving Our Sustainable Energy Future
  26. 26. The Way Forward <ul><li>The 20% Wind analysis and plan is a one important piece of the renewable energy vision, but it is just one resource and represents just part of the strategy for sustainable energy advocates. </li></ul>
  27. 27. A Bigger Picture Analysis and Strategy <ul><li>NREL is now developing a detailed analysis of the feasibility of 80% renewable energy by 2050 </li></ul><ul><ul><li>Includes aggressive energy efficiency assumptions </li></ul></ul>
  28. 28. The Renewable Energy Vision isn’t Guaranteed <ul><li>Competing visions are dueling in the courts of public opinion and public policy </li></ul><ul><ul><li>The coal vision is irreparably tarnished, but still powerful </li></ul></ul><ul><ul><li>The nuclear vision is not compatible with maximizing renewables </li></ul></ul><ul><ul><li>To prevail, we need to avoid parochialism within the sustainable energy community – neither wind nor solar nor efficiency can do it alone </li></ul></ul>
  29. 29. State Action <ul><li>Finally, central to the progress that has gotten us to this point is effective state action – the state RPS </li></ul><ul><li>State leadership is essential to making the renewable energy vision a reality – keep it up, Wisconsin! </li></ul>
  30. 30. <ul><li>WINDPOWER 2010 </li></ul><ul><li>Largest Wind Power </li></ul><ul><li>Conference on the Planet! </li></ul><ul><li>May 23-26, 2010 </li></ul><ul><li>Dallas, Texas </li></ul><ul><li>www.windpowerexpo.org </li></ul>Contact me at: [email_address]

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