Emerging Technologies, Data,

and NEM Modeling

Issues in Wind Resource Supply

Data and Modeling

Chris Namovicz
ASA Committee on Energy Statistics
Fall 2006 Meeting
October 5, 2006
This is a working document prepared by the Energy Information Administration (EIA) in order to solicit advice and
comment on statistical matters from the American Statistical Association Committee on Energy Statistics. This
topic will be discussed at EIA's fall 2006, meeting with the Committee to be held October 5 and 6, 2006.
 Overview
• Wind market
Projections
– Reference Case
– Technology Cases
– Policy Cases
• Key Assumptions
– Technology
Characteristics
– Resource
Characteristics

Photo Source: National Renewable Energy Laboratory

Wind Capacity AEO 06 Basis (GW)
100 AEO 2006
PTC Extension 06

80 Salazar GHG 4%
High Renewable Tech
2006 Renewable Tech

60

40

20

0
1995 2000 2005 2010 2015 2020 2025 2030
 National Energy Modeling System
(NEMS)
• Used to develop AEO and policy analysis
scenarios
• Integrated U.S. energy sector model with
macro-economic feedback
– Feedback among different sectors
– Electricity (and wind) uses 13 NERC-based
regions
• Updated annually
– Key assumptions occasionally revisited
– New modeling techniques
• Adaptable to model new policies
 Key Assumptions
• Technology
– Cost
– Performance
– Grid interaction
• Resource limits
– Performance
– Cost

Photo Source: National Renewable Energy Laboratory

 Current Cost
• From 1998 to 2002: wind costs 1100-1200 $/kW
• Evidence post-2003: costs have risen by 25%+
– Increased material costs
– Unfavorable exchange rates
– Supply-chain bottlenecks
– Unintended impacts of subsidy policy
– Manufacturer profit-taking
• NEMS assumes transient cost increase
• Based on Form 412
– Poor response rate
– Questions not designed for wind plants
– Survey is no longer funded
 Cost Learning
Experience Curves for U.S. Wind Installed Cost and Capacity
Factor
10000 1

Capacity Factor (fraction)

Progress Ratio: 105%

Installed Cost (2002 $/kW)

Progress Ratio: 91%

1000 0.1
100 1000 10000

Chart Source: EIA Form 412, Form 906 Installed Capacity (MW)

• Overall cost decline has been significant

– Most of cost declines occurred early
– Price over last 5-10 years has been flat-to-increasing
• NEMS assumes a 1% learning rate
• Capital cost doesn’t tell the complete story
 Wind Capacity Factor
• Energy cost determined by capital cost and
capacity factor
• Capacity factor varies by site
• Model assumes current capacity factor range
of 27 to 38%
– Form 906 range: 20% to over 40%
– Can’t reliably match individual sites to nominal
wind class
 Performance Learning
Change in Vintage Average Capacity Factor Over Time

0.35

0.3

0.25

0.2

0.15

0.1

0.05 Capacity Factor

0
1980 1985 1990 1995 2000 2005
• Capacity factor appears to be improving over time
– Much variability by site
• Capacity factor is an engineering/economic design trade-off
– Only fundamental limit is 100%
– Trade-off is maximizing blade utilization vs. maximizing generator utilization
• NEMS: capacity factor grows as a function of capacity growth
 Grid Interaction
• Intermittent resource - not under operator
control and variable based on weather
conditions
• NEMS models 3 system impacts
– Reduced value of energy
– Reduced contribution to reserve margin
– Surplus wind curtailment
• Impacts increase with wind capacity share
 Reduced Value of Energy
35
Gas Turbine
Oil/Gas Steam
Comb Cycle
30 Coal
IGCC
Bio/MSW/GT
Nuclear
25 Other
Hydro
Wind

20
Load (GW)

15

10

0
0% 20% 40% 60% 80% 100%
Pct. of Annual Hours

• Wind doesn’t always blow when it is most valuable

• NEMS: time-of-day/seasonal capacity factors
 Reduced Contribution to Reserves
Avg. Availability (no wind)
Avg. Availability (+2.5% wind)

Avg. Availability (+5% wind)

Probability of Output

Avg. Availability (+7.5% wind)

44 46 48 50 52 54
Lower 99.9% of Availability
Capacity (GW)

• No capacity resource has absolutely reliable output

• Capacity credit: ratio of load carrying capability to nameplate
capacity
• Need wind resource data with better temporal-spatial resolution
 Surplus Wind Curtailment
20000

15000

Load (MW)
10000 Nuclear
Coal
Wind
5000 Surplus

t= 240
-5000
209
211
213

219
221

227
229
231
233

237
239
205
207

215
217

223
225

235
Time

• Once committed, nuclear and coal steam plants are not likely to
shut-down for brief surges in wind power production
– Wind capacity will result in occasional off-peak curtailment to
maintain system balance
– NEMS derates capacity factor as a function of off-peak penetration
 Other Grid Issues
• Power quality
– Addressed by current technology
– Accounted for in wind technology cost
• Regulating Reserves
– Impacts in timeframe not modeled
– Modest cost with hour-ahead power markets
 Wind Resources
• The 3 “Rs” of wind
resource cost:
– Remoteness
– Roughness
– Restrictions

Map Source: National Renewable Energy Laboratory

 Remoteness
• Wind-to-electric conversion must occur
where the wind resource is
– Much of the resource will require new lines
– Modeled in NEMS
• The best wind is generally far from load
– Upgrade lines or build with less favorable
resources closer to load
– EIA-sponsored study underway
 Roughness

Photo Source: Andy Kydes

• The best wind sites are on ridges, hills, or mountains (or over
the ocean…)
• Distance from infrastructure
– Transportation
– Construction services
• No significant Analyses to date
 Restrictions
• Legal or technical restrictions
– Excluded from NEMS
• Competes with other uses for remaining
land
– Regional economic “pull” or “push”
– Some uses are public goods (“viewshed”)
• Noise and bird kills
– Most attention focused on a few sites
• Some studies have provided limited insight
– Much work left to be done with scant data
 The 3 Rs in NEMS
• Some transmission costs (distance to grid,
legal restriction) are explicitly accounted
for
• Remainder are accounted for in “long-term
cost adjustment factor”
– Factors are based on a few regional studies
of economic wind supplies
– EIA is currently focusing on improving
representation of transmission costs
 Conclusion
• Wind power is a “near competitive” resource for electric
power generation
– Subsidy, technology improvement, or higher internalized value for
environmental attributes can make wind very competitive
• As wind grows, real world data is becoming available
– Current levels are small relative to technical or plausible potential
• Grid impacts are beginning to be studied in detail
• Level at which public acceptance issues become costly or
limiting is highly uncertain, and possibly unknowable
• Uncertainty of resource costs add significant uncertainty to
forecasts with large wind market growth
 Glossary
• 4P Cap and Trade – A regulation to control four pollutants (sulfur dioxide – SO2, nitrogen oxides - NOx, mercury
- Hg, and carbon dioxide) by utilizing tradable pollution allowance credits
• Curtailment – operator ordered shut-down of generation capacity to maintain system reliability
• Induction generator – an AC generator that produces current slightly faster than the system frequency
• Intermittent Resource – A generation resource that is not under operator control, and is dependent on a naturally
variable energy flux (wind, sunshine, water)
• IPP – Independent Power Producer, a power plant owner not regulated by a state utility commission
• NREL – National Renewable Energy Laboratory, the primary research organization within the Department of
Energy for renewable energy technology
• Power Quality – the attributes of AC power such as voltage deviation, frequency, and reactive power that can
affect the stability of grid operations or the functioning of some sensitive loads
• PTC – Production Tax Credit, a 1.9 cent per kilowatt-hour tax credit available for the first 10 years of energy
production from a wind (or certain other renewable generation) plant. Expires at end of 2007, although
extensions are possible.
• Regulation reserve – capacity that is maintained at partial load and frequently adjusted to maintain system
reliability
• Reserve margin – the difference between maximum anticipated load and available nameplate capacity. Used
for planning purposes to ensure sufficient generation capacity after accounting for unexpected plant outages.
• RPS – Renewable Portfolio Standard, a requirement that utilities obtain a minimum fraction of power from
renewable resources, typically utilizing tradable renewable energy credits to minimize compliance costs
• Viewshed – The geographic area over which a wind turbine may be seen
• Wind Class – a 7-step scale developed by Pacific Northwest National Laboratory to generally describe the
average wind power available at a given location. 7 is the highest power (800 to 1600 watts per square meter at
50 meters height, corresponding to average winds of 8.8 to 11.1 meters per second), but Class 6 is the highest
class with significant U.S. on-shore resources (about 8 to 8.8 meters per second at 50 meters height)