Modeling the Penetration of Wind Energy Into the U'S' Electric Market Presentation to CNLS 26th Annu

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Modeling the Penetration of Wind Energy Into the
U.S. Electric MarketPresentation to CNLS 26th
Annual ConferenceAugust 16, 2006

• Walter Short, Nate Blair, Paul Denholm, Donna
  Heimiller

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Contents

• Wind Energy in the U.S. Electric System
• Brief Description of the WinDS Model
• Results
• Issues

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Wind Energy in the U.S. Electric System

• 9.1 GW of existing U.S. wind capacity (1)
• 2.4 GW added in 2005
• Incentivized by
• 1.9 cents/kWh federal production tax credit
• State mandates, e.g. Renewable Portfolio
  Standards
• Clean, renewable
• Impeded by
• Transmission availability
• System integration of a variable resource
• Recent rise in wind turbine capital costs
  (1600/kW)

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Wind Resources
gt5000 GW of onshore capacity gt3000 GW of offshore
capacity
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The U.S. DOE EIA Uses its National Energy
Modeling System to Project Future Wind Energy
Potential

• 13 large electric regions
• No new transmission
• No cost or limits on use of transmission within
  regions
• Cant accurately capture wind correlation between
  regions
• Wind considered a mature technology (1 learning
  rate on capital costs and capacity factors)
• Wind capacity valuelt 20
• Eliminates 91 of U.S. wind resource base

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EIAs NEMS Could Not Address Questions for the
DOE Wind Research Program

• Access to and cost of transmission
• Light wind close to the load or high speed wind
  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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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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Transmission in WinDS
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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
• 5 levels of regions wind supply/demand, power
  control areas, RTOs, 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
• State-level incentives
• Fed by extensive GIS input data bases
• Stochastic treatment of wind resource variability
  planning reserves, operating reserves, surplus
  wind

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WinDS Logic Flow
Wind resources Conventional plant
locations Transmission lines
GIS
EIA Electric loads, Fuel prices, Plant costs
tnow
Minimize PV of Costs Subject to Gens gt Loads
lossess Cap gt Peak (1RM) Regional energy
balances
LP Optimizer
tt2
Update LP coefficients
? capacity credit/ ?W ? oper reserve/ ?W ? wind
surplus/ ?W Retirements
T 2050?
no
yes
Stop
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Base Case Electricity Capacity
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Base Case Capacity by Wind Class
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Base Case Key Inputs

• Wind RD-driven Cost/Performance improvements
• 8 wind learning rate
• 1.9 cent/kWh PTC through 2007
• No carbon caps/tax
• Gas prices

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High Gas Prices Do Not Increase Wind Penetration
in the Long Term
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100/ton Carbon Case - Capacity
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100/ton Carbon Case - Generation
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100/ton Carbon No New NukesCapacity
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Production Tax Credit Extension
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A PTC Extension to 2020 Could Result in 20 of
Generation from Wind by 2020
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4.1
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Regional Wind Installations by 2020 with PTC
PTC to 2010 with ramp down by 2020
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Major Modeling Issues in WinDS

• Transmission
• Load modeling/loop flow
• Multiple interchanges
• Non-economic factors/siting
• Environmental emissions, views, birds, bats,
  radars
• Competitive technologies
• Conventional fuels/technologies
• Other renewables
• Electric industry dynamics
• Restructuring
• RTOs
• Model scope electric loads, fuel prices,
• Linear Programming Optimization

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New Website (documentation and results)
athttp//www.nrel.gov/analysis/winds
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Backup slides follow
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Annual Electric Generating Capacity
AdditionsFossil, Nuclear and Non-Hydro Renewables
Natural Gas 63 GW in 2002
Coal declines CAAA
Gas increases PIFUA changed PURPA CC
Efficiency Low price through deregulation
Gas declines PIFUA prohibits
Nuclear emerges Technology available Too cheap
to meter
Nuclear declines 3-Mile Island (1979) Chernobyl
(1986)
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WinDS Constraints on Wind Transmission
PCA 1
PCA 2
Existing transmission line
New transmission line
New wind transmission line
Class x wind
Supply/demand regions
Class y wind
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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
United States Government (the Government)
retains and the publisher, by accepting the work
for publication, acknowledges that the Government
retains a non-exclusive, paid-up, irrevocable,
worldwide license to publish or reproduce the
published form of this work, or allow others to
do so, for Government purposes.  Neither MRI,
the DOE, the Government, nor any other agency
thereof, nor any of their employees, makes any
warranty, express or implied, or assumes any
liability or responsibility for the accuracy,
completeness, or usefulness of any information,
apparatus, product, or process disclosed, or
represents that its use would not infringe any
privately owned rights. Reference herein to any
specific commercial product, process, or service
by trade name, trademark, manufacturer, or
otherwise does not constitute or imply its
endorsement, recommendation, or favoring by the
Government or any agency thereof. The views and
opinions of the authors and/or presenters
expressed herein do not necessarily state or
reflect those of MRI, the DOE, the Government, or
any agency thereof.