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The Future of Wind

The Future of Wind. NARUC Staff Subcommittee on Accounting and Finance October 13, 2008. Dr. Lola Infante Manager, Generation Fuels and Market Analysis. The Future of Wind. Current trends Observed Drivers Future(s) Future 1: “Improved” BAU = 100 GW

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The Future of Wind

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  1. The Future of Wind NARUC Staff Subcommittee on Accounting and Finance October 13, 2008 Dr. Lola Infante Manager, Generation Fuels and Market Analysis

  2. The Future of Wind • Current trends • Observed Drivers • Future(s) • Future 1: “Improved” BAU = 100 GW • Future 2: Aggressive policy = 200 GW • Future 3: Revolutionary change = 300+ GW • Uncertainties

  3. The Future of Wind – Current Trends Exceeding expectations

  4. Renewable Energy Net Generation - 2007 * Includes wind, solar, biomass and other non-hydropower renewable energy sources. ** Includes generation by batteries, chemicals, pitch, and purchased steam. Source: U.S. Department of Energy, Energy Information Administration, 2007 data

  5. Growth of renewable generation Source: U.S. Department of Energy, Energy Information Administration

  6. Growth of wind generation +31%/yr Annual growth +1.1%/yr 2008 data: Jan-June Source: U.S. Department of Energy, Energy Information Administration

  7. Growth of Wind - Capacity 2008 data: As of September. All other years: as of December Source: Ventyx, Inc. The Velocity Suite

  8. Growth of Wind - Capacity Annual Capacity Additions Annual growth 2008 data: As of September. All other years: as of December Source: Ventyx Inc., The Velocity Suite

  9. Wind capacity in the states Source: Ventyx Inc., The Velocity Suite

  10. Wind in the states Source: Ventyx Inc., The Velocity Suite; U.S. Department of Energy, Energy Information Administration

  11. Main Actors –Market Structure Source: Ventyx Inc., The Velocity Suite; U.S. Department of Energy, Energy Information Administration

  12. The Future of Wind • Observed Drivers • Policy • State RPS • PTC • Economic environment (increased cost-competitiveness) • Changing climate

  13. Wind Power Resources Source: NREL, Wind Energy Resource Atlas of the United States

  14. 28 States & The District of Columbia • Renewable Energy Standards in the states (28 + DC) create a “regulatory” demand for renewables

  15. PTC • The PTCand other financial incentives facilitate the financing of new capacity and lower its cost • But …

  16. Drivers – Economic Fundamentals • Increased construction costs • High and volatile fuel costs Different sources, 2008

  17. Drivers – Changing environment • Policy anticipation/uncertainty • US market attractiveness

  18. The Future of Wind • Future(s) • Future 1: “Improved” BAU = 100 GW • Future 2: Aggressive policy = 200 GW • Federal RPS • Expansion of existing RPS • Future 3: Revolutionary change = 300+ GW • Pickens • Google

  19. Future 1 – BAU– “100 GW Scenario” • Which BAU scenario? • Exceeding RPS Compliance

  20. Future 1 – BAU – “100 GW Scenario” Source: Ventyx Inc., The Velocity Suite; U.S. Department of Energy, Energy Information Administration Current level includes projects under construction

  21. Future 1 - BAU Expected online schedule of existing wind projects State RPS total renewable requirements by 2020 = 100-120 GW Source: Ventyx Inc., The Velocity Suite; Data as of October 2008

  22. Future 1: Challenges $160 billion by 2020 Transmission

  23. Future 1: Drivers and challenges Source: Ventyx Inc., The Velocity Suite, data as of July 2008 Includes all renewables. Operating includes projects under construction

  24. Transmission Access for Renewable Energy Source: Global Energy Decisions, Inc., The Velocity Suite

  25. Future 2 – Aggressive Policy – “200 GW Scenario” • +20% Federal RPS • Expansion of existing RPS • Climate policy-driven renewable expansion • …

  26. Future 2 – Aggressive Policy – “200 GW Scenario” (All Renewables) 200 GW Scenario 18% by 2025* *Based on AEO 2008 total capacity forecast

  27. Future 2 – Challenges • Transmission • Integration • Manufacturing • REC markets

  28. Future 3 – Energy revolution – “300+ GW Scenario” • Pickens Plan: 22+% wind penetration by 2020 • Google Plan: 380 GW of wind by 2030

  29. Future 3 – Energy revolution – “300+ GW Scenario” (All Renewables) 300+ GW Scenario 28% by 2025* *Based on AEO 2008 total capacity forecast

  30. Future 3 – Energy revolution – “300+ GW Scenario” 3 GW 15 GW 22 GW No experience to learn from 300+ GW Scenario

  31. Future 3 – Challenges and Contingencies • Transmission • Integration • Manufacturing • REC markets • Technology (again) • Cost (again) • Economic fundamentals (again) Necessary but not sufficient anymore

  32. The Future of Wind • Remaining Uncertainties • Finance: access to and cost of capital • Political and social will: how much is enough? • Climate: are renewables the interim answer? • Technological change: the LT future will depend on the evolution of wind (and other) technologies and cost • Economic fundamentals: the evolution of other technologies, cost of fuels will remain a critical driver/barrier to wind development

  33. Thank you! Contact information: Lola Infante linfante@eei.org (202)508-5133

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