Randall Swisher

1. Wind Energy Technology: A Global Opportunity for our Environment, Economic Development and Energy Security Randall Swisher Executive Director (Retired) American Wind Energy Association

2. Presentation Overview Electric Industry Basics Wind Technology Basics A Brief History Wind’s Current Market Status What is Wind’s Potential? What are the Challenges?

3. Electric Industry Basics

4. Sources of U.S. Electricity2008 Share of Net Generation by Energy Source* • Coal: 48.5% • Natural Gas: 21.3% • Nuclear: 19.7% • Hydropower: 6.1% • Wind: 1.4% • Petroleum: 1.1% • Other: 1.9% What role does each play? Regional differences? Operational characteristics? *Source: U.S. Energy Information Administration What is the common characteristic of these generating sources?

5. Power System Operations • Supply and demand must match at all times • Demand and supply are both variable and uncertain. • Grid operators hold generation in reserve: • Regulation reserves • Load-following reserves • Contingency reserves • Reserves are shared for all sources of variability

6. Wind Technology Basics

7. What’s Inside a Nacelle?

8. Advances in Power Electronics • Modern wind turbines are equipped with power electronics. • They process over 200 types of data, from wind speeds and oil temperature to voltage dips on the grid. • An entire wind farm can be monitored from a laptop.

10. 20 Years of Wind Technology Development Economies of Scale Drive Down Wind Cost Bottom Line: 1981-2000 = 124x the energy, 20x the cost;

11. Today’s Turbines are Big! • Hub Height: 60-100 meters (197-328 feet) • Rotor Diameter: 70-100 meters (230-328 feet) • Total Weight of Turbine: 230 - 340 tons

12. How big is a V80 2.0 MW This picture shows how big a V80 2.0 MW is compared with a Boeing 747 JUMBO JET

13. How much Electricity does a 1.5 MW Wind Turbine Produce? • A 1.5 Megawatt (MW) wind turbine should generate about 5 million kWh annually.* • Using national averages, that is equivalent to the electric needs of about 500 homes. *35% capacity factor

14. = 1/2 x air density x swept rotor area x (wind speed)3 A V3  Power in the Wind (W/m2) Density = P/(RxT) P - pressure (Pa) R - specific gas constant (287 J/kgK) T - air temperature (K) Instantaneous Speed (not mean speed) Area =  r2 kg/m3 m2 m/s Bottom Line: 12 mph wind has 70% more power than 10 mph wind

15. The Wind Industry: A Brief History

16. In the 1980s, the U.S. led the World in Wind Technology • The first successful windfarms were established in 1981 in California • Many U.S. turbine manufacturers were established in the early 80s • By 1989, the U.S. was home to 90% of the world’s installed wind capacity – almost all in California

17. But We Turned our Backs on the Opportunity • The DOE Wind R&D budget was cut 90% through the 1980s • The wind investment tax credit was abruptly ended in 1986 • Most U.S. turbine manufacturers went out of business • No new U.S. wind market emerged until 1997 – Iowa and Minnesota

18. Europe Took the Lead in the 1990s • Strong market incentives in Denmark, Germany and Spain led to a thriving turbine manufacturing industry • Germany was the largest single market until 2008 • This European leadership made possible wind’s current competitiveness

19. Today, the Global Industry has Three Key Markets • Europe – 66,000 MW (end of 2008) • Most manufacturers based in Europe • North America – 27,500 MW • The U.S. is now the largest single market, and all major global companies want to participate • Asia – 25,000 MW • Chinese market growing most quickly, and establishing a strong manufacturing base

20. 2009 Market Outlook The U.S. Wind Market Today

21. U.S. is World Leader in Wind Power With over 31,OOO MW, the U.S. is now the #1 wind energy producer in the world

22. U.S. Leads World in Installed Wind Capacity • The U.S. overtook Germany in 2008 with the most installed wind power capacity Source: AWEA

23. Record Breaking Installation and Growth 25,000 MW Annual Additions Cumulative Capacity 20,000 MW 15,000 MW Ten year annual average growth rate of 29% 2008 Installed: 8,545 MW 2008 Total: 25,400 MW 10,000 MW 5,000 MW Source: AWEA

24. Percentage of Generation Added by YearWind is #2 source for past four years • 8,558 MW added in 2008 • 42% of all new generating facilities added in 2008 were wind power plants

25. U.S. Wind Power Capacity (MW) Washington 1,375 Montana 272 Maine 47 North Dakota 714 Minnesota 1,752 VT 6 Oregon 1,067 Idaho 75 NH 25 South Dakota 187 Wisconsin 395 New York 832 MA 5 Wyoming 676 Michigan 129 RI 1 Iowa 2,790 Penn. 361 Nebraska 73 NJ 8 Ohio 7 Indiana 131 Utah 20 Illinois 915 WV 330 Colorado 1,068 Kansas 815 California 2,517 Missouri 163 Tennessee 29 Oklahoma 708 Under 100 MW 100 MW-500 MW Over 1,000 MW New Mexico 497 Texas 7,116 Total 25,170 MW Alaska 3 Hawaii 63 Source: AWEA, January 2009

26. Market Drivers Contributing to Wind’s Growth • Economics - Wind competes well in many regions • Federal and State Policies • Wind’s Environmental Benefits • The New Energy Economy - Jobs • Public Support • Other major generation sources constrained • Coal’s carbon risk • Gas price volatility • Nuclear capital costs/perceived risk

27. Wind Power is Cost-Competitive Estimated Capital Cost of New Generation Source: FERC,Increasing Costs in Electric Markets, 2008

28. Cost of Energy: Standard & Poor’s, 2007

29. Interconnection Queues Are Cloggedwith Wind Projects: Nearly 300 GW! 2008 Wind Market Report; LBL

30. Growing the Wind Industry:What’s the Potential?

31. 20% Wind Energy by 2030 The U.S. possesses sufficient and affordable wind resources to obtain at least 20% of its electricity from wind by the year 2030. U.S. Department of Energy, May 2008

32. 20% Wind Energy by 2030 Wind capacity has already doubled in the past three years 8,300 MW -- 42% of new U.S. capacity -- added in 2008

33. Job Projections Under 20% Report • Over 500,000 total jobs would be supported by the wind industry Source: U.S. DOE, 20% Wind Energy by 2030

34. 4,500 4,000 3,500 3,000 2,500 2,000 1,500 No New Wind Scenario CO emissions 1,000 2 20% Wind Scenario CO emissions 2 USCAP path to 80% below today’ s levels by 2050 500 0 2006 2010 2014 2018 2022 2026 2030 CO2 Reductions From Electricity Sector Source: U.S. DOE, 20% Wind Energy by 2030

35. Challenges to Achieving Wind’s Potential

36. Key Barriers to Achieving 20% Wind • Immediate Need to fix the financial system • Need for long-term stable federal policy • Need for transmission infrastructure

37. Lack of Stable Policy Inhibits Investment • Need a stable long-term federal policy • Long-term federal production tax credit (PTC) • Federal renewable energy standard (RES) • Climate policy

38. Transmission Infrastructure • The lack of transmission infrastructure is the single greatest long-term strategic constraint facing the wind industry. • There is a growing recognition of this barrier by policymakers

39. Link areas with vast supplies of renewables to areas of high electricity demand green power superhighways Improve grid operations Green Power Superhighways

40. What do you do when the wind doesn’t blow? • Wind is an energy resource, not a capacity resource • Take the wind when it blows, rely on the utility’s hundreds of other power plants when it doesn’t • As wind takes a larger role, the electric system will add more flexible resources . . . • Demand-response • Efficient gas-fired turbines • Incremental hydro • Energy storage • And it will consolidate control areas and use generating resources more efficiently • Storage is not necessary to reach 20% wind

41. Strong Winds are on the Horizon The Future Looks Bright for Wind Power

42. For additional information: www.awea.org rswisher@awea.org