Long Term National Impacts of Statelevel Policies WindPower 2006

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Long Term National Impacts of State-level
PoliciesWindPower 2006

• Nate Blair, Walter Short, Paul Denholm, Donna
  Heimiller
• National Renewable Energy Laboratory

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Goal of Analysis

• Attempting to answer the following questions
• What impact will state-level incentives have on
  wind capacity growth in the near future and the
  distant future?
• How are state-level policies shaping the
  dispersal of wind deployment across the country ?
• This effect interacts with dispersal due to
  capacity value increase with greater dispersal.
• Could higher penalties promote greater compliance
  with RPS? And how high should they be?

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Contents

• Brief Description of the WinDS Model
• Base Case results
• State-Level Policy Impacts
• No State-Level Policy
• Impact of Penalty Level on RPS Compliance

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WinDS Model(Wind Deployment Systems Model)

• A multi-regional, multi-time-period model of
  capacity expansion in the electric sector of the
  U.S.
• Designed to estimate market potential of wind
  energy in the U.S. for the next 20 50 years
  under different technology development and policy
  scenarios

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WinDS Regions
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Wind Resources in WinDS
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WinDS is Designed to Address the Principal Market
Issues for Wind

• Access to and cost of transmission
• Class 4 close to the load or class 6 far away?
• How much wind can be transmitted on existing
  lines?
• Will wind penetrate the market if it must cover
  the cost of new transmission lines?
• Will offshore wind close to seaboard loads
  penetrate?
• Resource Variability
• How does wind capacity credit change with
  penetration?
• How do ancillary service requirements increase
  with wind market penetration
• How much would dispersal of wind sites help?
• Is on-site storage cost effective?

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General Characteristics of WinDS

• Linear program cost minimization for each of 26
  two-year periods from 2000 to 2050
• Sixteen time slices in each year 4 daily and 4
  seasons
• 4 levels of regions wind supply/demand, power
  control areas, NERC areas, Interconnection areas
• Existing and new transmission lines
• 5 wind classes (3-7), onshore and offshore
  shallow and deep
• All major power technologies hydro, gas CT, gas
  CC, 4 coal technologies, nuclear, gas/oil steam
• Electricity storage capability

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Base Case Capacity by Wind Class
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Base Case Generation Fractions
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Basecase Wind Capacity in 2050
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Legislation Leaves Modeling Questions

• How long is the final RPS fraction to be
  maintained?
• What is the penalty for non-compliance with an
  RPS?
• standard utility enforcement ???
• What RPS fraction is from wind?
• How long will PTCs and ITCs last?
• Frequently Changing Legislation

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Our Modeling Assumptions for Incentives

• State Incentives based on DSIRE database and
  other sources.
• If no duration given, assumed incentive lasts
  throughout the simulation.
• Assumed complete RPS compliance for affected
  utilities either by purchasing renewables or
  paying the penalty
• Munis and coops frequently exempted
• Fraction that must be met by wind determined
  exogenously
• Based on viability of wind resource and other
  state renewable resources (solar, biomass, etc.)
• Assumed that RPS requirements can be met by wind
  generation transmitted in from other states.

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State RPS Assumptions
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State PTC and ITC Assumptions
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Wind Capacity With W/out State Incentives
(WithW/out RD Improvements)
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Delta Wind Consumed in 2030 (MWh) (normal state
incentives - no state incentives)
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Delta Wind Consumed in 2050 (MWh) (normal state
incentives - no state incentives)
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Increased Penalty Values would increase RPS
compliance
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Conclusions

• State-level incentives drive a significant
  fraction of the early growth in wind
  installations.
• In the second decade of the 21st century, current
  incentives will most likely not continue to be a
  primary factor in new wind growth.
• Enhanced incentives and the spread of incentives
  to new states could continue to spur wind energy
  growth.
• Higher penalty amounts and enforcement are
  critical to reaching expected RPS penetration
  levels.
• Continued work on including additional
  state-level incentives and updating existing
  incentives is necessary for more precise
  near-term forecasts.

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Disclaimer and Government License This work
has been authored by Midwest Research Institute
(MRI) under Contract No. DE-AC36-99GO10337 with
the U.S. Department of Energy (the DOE). The
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