Wind Energy Update

Larry Flowers National Wind Technology Center, NREL

February, 2010

Installed Wind Capacity through end 4Q09

Source: AWEA, updated through 4Q 2009

U.S. Wind Industry 4Q 2009

Source: AWEA, updated through 4Q 2009

U.S. Wind Manufacturing

U.S Lagging Other Countries in Wind As a Percentage of Electricity Consumption

Projected Wind Generation as a Proportion of Electricity Consumption 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% Denmark Germany Portugal Greece France Netherlands Australia Sweden Canada Austria TOTAL Turkey Ireland India UK China Japan U.S. Italy Brazil Spain 0% Approximate Wind Penetration, end of 2008 Approximate Wind Penetration, end of 2007 Approximate Wind Penetration, end of 2006

Note: Figure only includes the 20 countries with the most installed wind capacity at the end of 2008

Wind Is a Major Source of New Generation Capacity Additions: Wind Contributed 42% of New Additions in the US in 2008
70 60 Annual Capacity Additions (GW) 50 40 0% wind 30 20 18% wind 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2% wind 12% wind 35% wind 42% wind 4% wind 1% wind 3% wind

Other non-renewable Coal Gas (non-CCGT) Gas (CCGT) Other renewable Wind

Wind was the 2nd-largest resource added for the 4th-straight year

Nearly 300 GW of Wind in Transmission Interconnection Queues

300 Entered Queue in 2008 250 Nameplate Capacity (GW) Total in Queue at end of 2008

200

150

Twice as much wind as next-largest resource (natural gas) in queues

100

50

0 Wind Natural Gas Coal Nuclear Solar Other

MISO (64 GW), ERCOT (52 GW), SPP (48), and PJM (43 GW) account for >70% of total wind in queues Not all of this capacity will be built.

Wind Power in Queues (MW)

Washington 5,831 Oregon 9,361 Montana 2,327 Idaho 446 North Dakota 11,493 South Dakota 30,112 Nebraska 3,726 Utah 1,052 California 18,629 Arizona 7,268 Colorado 16,602 Kansas 13,191 Minnesota 20,011 Wisconsin 908 Iowa 14,569 VT 155 Maine 1,398 NH 396 Michigan 2,518 New York 8,000 Penn. 3,391 RI 347 MA 492

Wyoming 7,870

Nevada 3,913

IN Ohio Illinois 8,426 3,683 WV 16,284 1,045 VA 820 Missouri 2,050

NJ 1416 DE 450 MD 810

Under 1000 MW 1,000 MW-8,000 MW Over 8,000 MW

New Mexico 14,136

Oklahoma 14,677 Arkansas 210 Texas 63,504

Total 311,155 MW
Source: AWEA

Drivers for Wind Power

Declining Wind Costs Fuel Price Uncertainty Federal and State Policies Economic Development Environment/Water Public Support Green Power Energy Security Carbon Risk

Wind Has Been Competitive with Wholesale Power Prices in Recent Years
90 80 70 60 2008 $/MWh 50 40 30 20 10 0 2003 49 projects 2,268 MW 2004 62 projects 3,069 MW 2005 80 projects 4,083 MW 2006 98 projects 5,165 MW 2007 117 projects 7,654 MW 2008 145 projects 9,873 MW Nationwide Wholesale Power Price Range (for a flat block of power) Cumulative Capacity-Weighted Average Wind Power Price (with 25% and 75% quartiles) Wind project sample includes projects built from 1998-2008

Wholesale price range reflects flat block of power across 23 pricing nodes Wind power prices include sample of projects built from 1998-2008

Even Among More-Recent Projects, Wind Was Competitive in Most Regions in 2008
90 80 70 2008 $/MWh 60 50 40 30 20 10 0 Texas 2 projects 241 MW Heartland 28 projects 2,133 MW Mountain 10 projects 1,115 MW Northwest 5 projects 831 MW Great Lakes 6 projects 713 MW California 3 projects 233 MW East 4 projects 170 MW New England 2 projects 29 MW Total US 60 projects 5,465 MW Average 2008 Wholesale Power Price Range (by region) 2008 Capacity-Weighted Average Wind Power Price (by region) Individual Project 2008 Wind Power Price (by region) Wind project sample includes projects built from 2006-2008

Note: Within a region there are a range of wholesale power prices because multiple wholesale price hubs exist in each area (see earlier map)

Comparative Generation Costs

Source: LBL

Renewable Portfolio Standards

www.dsireusa.org / August 2009
WA: 15% by 2020* MT: 15% by 2015 OR: 25% by 2025 (large utilities)*
5% - 10% by 2025 (smaller utilities) ND: 10% by 2015 SD: 10% by 2015

MN: 25% by 2025

(Xcel: 30% by 2020)

VT: (1) RE meets any increase in retail sales by 2012; (2) 20% RE & CHP by 2017

ME: 30% by 2000

New RE: 10% by 2017

NH: 23.8% by 2025 MA: 15% by 2020

+ 1% annual increase
(Class I Renewables)

MI: 10% + 1,100 MW

by 2015*

WI: Varies by utility;

10% by 2015 goal

NY: 24% by 2013

RI: 16% by 2020 CT: 23% by 2020

NV: 25% by 2025*

CO: 20% by 2020 (IOUs)

10% by 2020 (co-ops & large munis)*

IA: 105 MW

OH: 25% by 2025

VA: 15% by 2025*

IL: 25% by 2025 MO: 15% by 2021

PA: 18% by 2020 NJ: 22.5% by 2021 MD: 20% by 2022 DE: 20% by 2019* DC: 20% by 2020

CA: 20% by 2010

UT: 20% by 2025*

KS: 20% by 2020

AZ: 15% by 2025 NM: 20% by 2020 (IOUs)

10% by 2020 (co-ops)

NC: 12.5% by 2021 (IOUs)

10% by 2018 (co-ops & munis)

TX: 5,880 MW by 2015 HI: 40% by 2030

29 states & DC
have an RPS
5 states have goals

State renewable portfolio standard State renewable portfolio goal Solar water heating eligible

Minimum solar or customer-sited requirement

Extra credit for solar or customer-sited renewables Includes separate tier of non-renewable alternative resources

Environmental Benefits No SOx or NOx No particulates No mercury No CO2 No water

Source: NOAA

Source: NOAA

Wild Horse Wind Power Project Phase 1 (Ellensburg, WA)

Owned by Puget Sound Energy Commissioned 2006 228.6 MW (127) 1.8 MW Vestas turbines Estimated 2008 property tax payments totaled ~ $1.56 million Project employed ~ 250 workers during peak construction 14-18 O&M positions ~ 80 acres of Washington Department of Fish and Wildlife land leased for the project providing between $60,000 and $125,000 annually PSE also leases land from state Department of Natural Resources

White Creek Wind Project (Klickitat County, WA)

Commissioned 2007 204.7 MW (89) 2.3 MW Siemens Turbines Last Mile Electric Cooperative is made up of four publicly owned utilities (Tanner Electric Co-op, Lakeview Light & Power, Cowlitz County Public Utility District, Kilickitat County Public Utility District) In order to take advantage of production tax credits, the original utility sponsors sold the project to White Creek Wind I LLC, a passthrough entity arranged by the broker-dealer arm of Meridian Companies Once complete, White Creeks equity sponsors assumed ownership in order to receive the projects tax credits

The sponsoring utilities hold an option to buy the project back after 10 years

Elkhorn Valley Wind Farm (Union County, OR)

Owned by Horizon Wind Energy Commissioned in 2007 100.65 MW (61) Vestas 1.65 MW turbines Tax revenue estimated between $250,000 and $700,000 per year Project will yield a total of $10 million in taxes for Union County $400,000 in annual land agreements Land Leased from about a dozen local landowners 200 workers involved in the construction process 8 15 permanent positions

NaturEners Glacier Wind Power Project (Toole/Glacier County, MT)

Owned by NaturEner Phase 1 online 2008 Phase 2 online 2009 (210) 1.5 MW Acciona turbines Tax Revenue from the project will be ~ $4 million annually for Glacier and Toole Counties ~ $1 million in annual land agreements Total construction jobs for both phases ~ 350 ~ 18 permanent positions

Wolverine Creek Wind Project (near Idaho Falls, ID)

Owned by Invenergy Online 2005 64.5 MW (43) GE 1.5 MW turbines Tax revenue from project ~ $900,000 annually ~ 200 workers during construction 4 O&M positions

Jerome Middle School Wind Turbine (Jerome, ID)

(1) Skystream 2.4 kW turbine Installed November 2008 Jerome Middle School received a Wind For Schools $4,600 grant through Boise State and the Tidwell Foundation to offset the turbine cost. The school solicited local companies to donate time & materials (reduced the cost of installation)
Starr Corporation - Foundation kit $373, Concrete $1000, Re-bar $600, Forming material $150, Equipment for digging foundation $320, Labor for foundation $2000. H & H Utility - Crane $3000, Pulling wires, Meter, Installation of Turbine Portneuf Electrical - 1800 ft (3 wire 600 ft each) 4 gauge, 600 ft bare wire (no insulation) 8 gauge $1500. Power by Jake (Jake Cutler) - Licensed Electrician $360

In the end, Jerome Middle School paid ~ $3,720 for the turbine tower & various permits.

Key Issues for Wind Power

Financial markets Policy Uncertainty Supply chain/workforce Siting and Permitting: avian, noise, visual, federal land * Transmission: FERC rules, tariffs, new lines, PMAs

Operational impacts: variability, ancillary services, forecasting, cost allocation Accounting for non-monetary value: green power, no fuel price risk, reduced emissions and water use

The future aint what it used to be. - Yogi Berra

140 120 100 80 60 40 20 0 -

Onshore
Class 7 Class 6 Class 5 Class 4 Class 3

Offshore
Class 7 Class 6 Class 5 Class 4 Class 3

Levelized Cost of Energy, $/MWh

10% Available Transmission

200

400 600 Quantity Available, GW

800

1,000

2010 Costs w/ PTC, $1,600/MW-mile, w/o Integration costs

46 States Would Have Substantial Wind Development by 2030

Wind Capacity Total Installed (2030)

(GW)
0.0 - 0.1 0.1 - 1 1-5 5 - 10 > 10 The black open square in the center of a state represents the land area needed for a single wind farm to produce the projected installed capacity in that state. The brown square represents the actual land area that would be dedicated to the wind turbines (2% of the black open square). Includes offshore wind.

Jobs and Economic Impacts from the JEDI Model 20% Wind Power in Idaho, Oregon, and Washington (20,681 MW)
JEDI Model Version W1.09.03e

Project Development & Onsite Labor Impacts

Landowner Revenue: $62 million/year Local Property Taxes: $116 million/year Construction Phase: 10,520 new jobs $842 million to local economies Operational Phase: 965 new long-term jobs $70 M/year to local economies

Indirect & Induced Impacts

Construction Phase: new jobs 92,910 $11.4 Billion to local economies

Totals
(construction + 20 yrs)

Total economic benefit:

= $26.8 Billion
New local jobs during construction:

Operational Phase: 2,963 local jobs = 103,430 $481 Million/year to local economies New local long-term jobs:

= 3,928

Construction Phase = 1-2 years Operational Phase = 20+ years

28

Based on DOE Report: 20% Wind Energy by 2030

(includes on-shore and off-shore development)

20% Wind Scenario Impact on Generation Mix in 2030

100% Reduces electric utility natural gas consumption by 80% 50% Reduces total natural gas 60% consumption by 11% Natural gas consumer 40% benefits: $86-214 billion* Reduces electric utility coal 20% consumption by 18% Avoids construction of 80 GW 0% No New Wind of new coal power plants

U.S. electrical energy mix

20% Wind Hydro Wind

Source *: Hand et al., 2008

Natural Gas Coal Nuclear

CO2 Emissions from the Electricity Sector

4,500

CO2 Emissions in the Electric Sector (million metric tons)

4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2006 No New Wind Scenario CO2 emissions 20% Wind Scenario CO2 emissions USCAP path to 80% below todays levels by 2050

2010

2014

2018

2022

2026

2030

Cumulative Water Savings from 20% Scenario

Reduces water consumption of 4 trillion gallons through 2030 (represents a reduction in electric sector water consumption by 17% in 2030)

U.S. Remains on Early Track To Meet 20% of Nations Electricity with Wind by 2030
18 16 annual projections (EER) Cumulative Capacity (GW) 14 Annual Capacity (GW) 12 10 8 6 4 2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 0 Deployment Path in 20% Wind Report (annual) Actual Wind Installations (annual) Deployment Path in 20% Wind Report (cumulative) 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 245 210 175 140 105 70 35 0 315 280

But ramping up to ~16 GW/year and maintaining that pace for a decade is an enormous challenge, requiring proactive policy, substantial transmission expansion, mitigation of output variability, and eased siting and permitting processes

Carpe Ventem

www.windpoweringamerica.gov