Emerging Technologies, Data, and NEM Modeling Issues in Wind Resource Supply Data and Modeling

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Emerging Technologies, Data, and NEM
ModelingIssues 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.
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Overview

• Wind market Projections
• Reference Case
• Technology Cases
• Policy Cases
• Key Assumptions
• Technology Characteristics
• Resource Characteristics

Photo Source National Renewable Energy Laboratory
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Wind Capacity AEO 06 Basis (GW)
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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

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Key Assumptions

• Technology
• Cost
• Performance
• Grid interaction
• Resource limits
• Performance
• Cost

Photo Source National Renewable Energy Laboratory
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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

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Cost Learning
Chart Source EIA Form 412, Form 906

• 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 doesnt tell the complete story

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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
• Cant reliably match individual sites to nominal
  wind class

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Performance Learning

• 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

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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

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Reduced Value of Energy

• Wind doesnt always blow when it is most valuable
• NEMS time-of-day/seasonal capacity factors

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Reduced Contribution to Reserves

• 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

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Surplus Wind Curtailment

• 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

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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

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Wind Resources

• The 3 Rs of wind resource cost
• Remoteness
• Roughness
• Restrictions

Map Source National Renewable Energy Laboratory
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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

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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

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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

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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

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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

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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)