Tina Casey teases us with a game of electricity generation cost limbo in her encouraging article, How Low Can Wind Energy Go? 2.5¢ Per Kilowatt-Hour Is Just The Beginning.
Tina Casey does call our attention to some caveats such as the 2013 Wind Technologies Market Report was based on a smaller sample size than previous reports. It included only 11 projects with a total of 650 MW
The tubes have been buzzing over a new Department of Energy report on the US wind energy market, which came up with the low-low average cost for wind energy of $25 per megawatt-hour for a certain type of electricity purchase agreement (more on that later). According to some of our friends on the Internets that works out to 2.5¢ per kilowatt-hour, which certainly seems to spell doom for the long term prospects of coal, nuclear, oil, and even that “other” low cost fuel, natural gas.
Looking first at the installed cost per MW (megawatt, not megawatt-hour) for wind turbines, the report comes up with an average cost of $1,630 per kW (kilowatt, not kilowatt-hour). That’s an impressive $300 drop from the 2012 annual report, and a whopping $600 drop from the 2010 average. ...The report indicates in a sort of mysterious sounding region in the U.S. called, the "Interior" the average PPA cost of wind generation was $22 per MWh, also suggests that as soon as large offshore wind farms come online and get averaged into the mix, this cost will go even lower.
Power purchase agreements (PPAs) are quickly becoming the financing deal of choice for wind as well as solar power. The report notes that PPAs for wind energy reached a new low on 2013, pegging the figure at $25 per MWh or 2.5¢ per kWh. However, once again the report cautions that the 2013 sample size is small. On top of that, most of the projects in the sample are located in the aforementioned high-quality wind interior, where costs are lower. Here’s how the report expresses it:
After topping out at nearly $70/MWh for PPAs executed in 2009, the national average levelized price of wind PPAs that were signed in 2013 (and that are within the Berkeley Lab sample) fell t o around $25/MWh nationwide — a new low, but admittedly focused on a sample of projects that largely hail from the lowest – priced Interior region of the country.
Can this be correct? Even electricity rates of 8 to 10 cents per kilowatt hour are considered low by many other reports I've seen. I'll have to delve into some research to verify this is an error. Perhaps, readers can help.
If this turns out to be turn, perhaps this explains why the Koch brothers have been reported to raise every road block to the offshore Atlantic Coast wind projects that they can. (I suspect Tina Casey probably meant to write Atlantic coast wind projects unless there is an official proper noun of some company named Atlantic Coast who are doing a bunch of them. I'm too lazy to spend any time tracking this down.)
Hey this is cool report by the Department of Energy, which would be worth a reference if only even for this great list of energy Acronyms of Abbreviations which I found while checking to see if this 2.5 cents per kilowatt hours number can possibly be true. I had hoped any remaining smidgens of personal pride had been ground out of me by a harsh life, however, for reason I am not able to "let go" and enjoy weekends even as an anonymous dog - which is pretty pathetic when I think about it.
List of Acronyms and Abbreviations
AWEA American Wind Energy Association
Bloomberg NEF Bloomberg New Energy Finance
BPA Bonneville Power Administration
CAISO California Independent System Operator
CREZ Competitive Renewable Energy Zone
DOE U.S. Department of Energy
EDPR EDP Renováveis
EEI Edison Electric Institute
EIA U.S. Energy Information Administration
ERCOT Electric Reliability Council of Texas
FERC Federal Energy Regulatory Commission
GE General Electric Corporation
HTS Harmonized Tariff Schedule
ICE Intercontinental Exchange
IOU investor-owned utility
IPP independent power producer
ISO independent system operator<
ISO-NE New England Independent System Operator
ITC investment tax credit
m2 square meter
MISO Midcontinent Independent System Operator
NERC North American Electric Reliability Corporation
NREL National Renewable Energy Laboratory
NSP Northern States Power Company
NYISO New York Independent System Operator
O&M operations and maintenance
OEM original equipment manufacturer
PGE Portland General Electric
PJM PJM Interconnection
POU publicly owned utility
PPA power purchase agreement2013 Wind Technologies Market Report iii
PSCo Public Service Company of Colorado
PTC production tax credit
REC renewable energy certificate
RGGI Regional Greenhouse Gas Initiative
RPS renewables portfolio standard
RTO regional transmission organization
SPP Southwest Power Pool
SPS Southwestern Public Service Company
USITC U.S. International Trade Commission
WAPA Western Area Power Administration
Note to new and emerging writers, if you feel you aren't getting enough respect from readers around here, some of whom can be a real pain in the ... neck, just sprinkle your post with lots of unexplained acronyms. This can create the impression that you know a lot more than you do, and also sometimes intimidate readers who might otherwise ask embarrassing and annoying questions. (Snark alert! Sheesh my dark cynicism alarms are going off. Maybe I ought to go back to bed and let that late night Ambian I took wear off. I might not be awake yet.
Don't you really regret it when you can't get to sleep, and take some powerful psychotropic meds that your doctors prescribed without warning you of common side effects, and then wake up to discover you've been "sleep posting" and have embarrassed yourself in front of the entire community by not putting a "humor alert" tag in front of some really cynical wise crack and now everyone thinks you are a jerk? I hate it when that happens.
You've heard of sleep walking? Some of the not uncommon side effects of Ambian have included sleep driving, sleep eating, and even sleep love making where people are not fully conscious and have no memories of what they did.
My girlfriend is really strict about her diet, and has clinically diagnosed O.C.D. about neatness and tidiness which can be ... well, anyway have she take her sleep meds and about a dozen others she sometimes wakes up and ravages the refigerator.
One time she ate the tops of an entire 12 inch chocolate cheese cake while sleep walkig which she would never touch in a normal state - we had purchased it for a dinner party the next day. When we woke up the ravaged cheesecake was left out on the counter with the entire top half eaten off by pulling chunks off with fingers, chunks and crumbs of it all over the floor, where it had been smeared, after being stepped on.
I used to just clean these up thinking it funny, until she started blaming me. So I proofed it with motion activated video that she was in fact our "cheesecake monster." It turns out she secretly and unconsiously loves a whole lot of the foods I like that she has always insisted were disgusting and has refused to eat ever. Ha!
1:19 PM PT: Holy Smokes, I can't believe it. This is a major significant new report from the Department of Energy, a highly credible source, that his chock full of amazing plots, finding and a dozen potential headlines and I'm sitting here making silly jokes about some tangent details in a secondary report!
I better get some coffee and officially wake up and read this whole thing carefully. There are some prize winning data plot in here that could be run as a dozen or more independent posts!
Annual wind power capacity additions in the United States were modest in 2013, but all signals point to more-robust growth in 2014 and 2015. With the industry’s primary federal support—the production tax credit (PTC)—only available for projects that had begun construction by the end of 2013, the next couple years will see those projects commissioned. Near-term wind additions will also be driven by recent improvements in the cost and performance of wind power technologies. At the same time, the prospects for growth beyond 2015 are uncertain. The PTC has expired, and its renewal remains in question. Continued low natural gas prices, modest electricity demand growth, and limited near-term demand from state renewables portfolio standards (RPS) have also put a damper on industry growth expectations. These trends, in combination with increasingly global supply chains, continue to impact domestic manufacturing of wind equipment. What they mean for wind power additions through the end of the decade and beyond will be dictated in part by future natural gas prices, fossil plant retirements, and policy decisions. At the same time, recent declines in wind energy costs and prices and the potential for continued technological advancements have boosted future growth prospects.
Key findings from this year’s Wind Technologies Market Report include: Installation Trends
• Wind power additions stalled in 2013, with only 1,087 MW of new capacity added in the United States and $1.8 billion invested. Wind power installations in 2013 were just 8% of those seen in the record year of 2012. Cumulative wind power capacity grew by less than 2% in 2013, bringing the total to 61 GW.
• Wind power represented 7% of U.S. electric-generating capacity additions in 2013. Overall, wind power ranked fourth in 2013 as a source of new generation capacity, standing in stark contrast to 2012 when it represented the largest source of new capacity in the United States. The 2013 result is also a notable departure from the six years preceding 2013 during which wind constituted between 25% and 43% of capacity additions in each year. Since 2007, wind power has represented 33% of all U.S. capacity additions, and an even larger fraction of new generation capacity in the Interior (54%) and Great Lakes (48%) regions. Its contribution to generation capacity growth over that period is somewhat smaller in the West and Northeast (both 29%), and considerably less in the Southeast (2%).
• The United States fell to sixth place in annual wind additions in 2013, and was well behind the market leaders in wind energy penetration. After leading the world in annual wind power additions from 2005 through 2008, and then narrowly regaining the lead in 2012, in 2013 the United States represented only 3% of global additions. In terms of cumulative capacity, the United States remained the second leading market. A number of countries are beginning to achieve high levels of wind penetration: end-of-2013 installed wind power is estimated to supply the equivalent of 34% of Denmark’s electricity demand and approximately 20% of Spain, Portugal and Ireland’s demand. In the United States, the wind power capacity installed by the end of 2013 is estimated, in an average year, to equate to nearly 4.5% of electricity demand. 2013 Wind Technologies Market Report
• California installed the most capacity in 2013 with 269 MW, while nine states exceed 12% wind energy penetration. New large-scale wind turbines were installed in thirteen states, and Puerto Rico, in 2013. On a cumulative basis, Texas remained the clear leader.
Notably, the wind power capacity installed in Iowa and South Dakota supplied 27% and 26%, respectively, of all in-state electricity generation in 2013, with Kansas close behind at more than 19%. In six other states wind supplied between 12% and 17% of all in-state electricity generation in 2013.
• No commercial offshore turbines have been commissioned in the United States, but offshore project and policy developments continued in 2013. At the end of 2013, global offshore wind capacity stood at roughly 6.8 GW, with Europe being the primary locus of activity. No commercial offshore projects have been installed in the United States, and the emergence of a U.S. market faces both challenges and opportunities. Strides continued to be made in the federal arena in 2013, both through the U.S. Department of the Interior’s responsibilities with regulatory approvals (the first competitive leases were issued in 2013) and the U.S. Department of Energy’s (DOE’s) investments in offshore wind energy research and development, including funding for demonstration projects. Navigant, meanwhile, has identified 14 projects totaling approximately 4.9 GW that are somewhat more advanced inthe development process. Two of these have signed power purchase agreements (PPAs), and both sought to commence construction in 2013 in order to qualify for the federal tax credits.
• Data from interconnection queues demonstrate that a substantial amount of wind power capacity is under consideration. At the end of 2013, there were 114 GW of wind power capacity within the transmission interconnection queues reviewed for this report. 95% of this capacity is planned for Texas, the Midwest, Southwest Power Pool, PJM.
Interconnection, the Northwest, the Mountain region, and California. Wind power represented 36% of all generating capacity within these queues at the end of 2013, higher than all other generating sources except natural gas. In 2013, 21 GW of gross wind power capacity entered the interconnection queues, compared to 42 GW of natural gas and 11 GW of solar. Of note is that the absolute amount of wind, coal, and nuclear power in the sampled interconnection queues has generally declined in recent years, whereas natural gas and solar capacity has increased.