20% Wind Vision: A Great Lakes Opportunity Larry Flowers National Renewable Energy Laboratory March 2008

People Want Renewable Energy! 1. Germany: MW 2. United States: MW 3. Spain: MW 4. India: 7720 MW 5. China: 5000 MW Source: WindPower Monthly and AWEA World total Jan 2008: 90,419 MW Total Installed Wind Capacity

Installed Wind Capacities – Dec ’07* *Preliminary data

Drivers for Wind Power Declining Wind Costs Fuel Price Uncertainty Federal and State Policies Economic Development Public Support Green Power Regional Water Scarcity Energy Security Carbon Risk

Comparative Generation Costs

CO 2 prices significantly increase the cost of coal Source: UCS/Black & Veatch

☼ Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE ¹PA: 8% Tier I / 10% Tier II (includes non-renewables) DSIRE: March 2008 State Goal State RPS Solar water heating eligible Renewables Portfolio Standards

Peetz Table Wind Energy Center, CO MW (1.5-MW turbines) Landowner payments: $2 million/year, $65 million over 30-year period 300 – 350 workers during peak construction (80% local) 16 – 18 O&M positions Total annual tax payments: $2.3 million/year (10% of total county budget); $70 million over 30 years Located near Peetz, CO Owned by FPL Energy Constructed in 2007

Weatherford Wind Energy Center, OK 147 MW (1.5-MW turbines) Landowner payments: $300,000 in annual lease payments 150 workers during peak construction 6 fulltime O&M positions Property taxes: $17 million over 20 years Sawartzky Construction received $300,000 in revenue from the project Owned by FPL Energy Constructed in 2005

144 MW (1800-kW turbines) Landowner payments: $18 million over the life of the project 175 workers during peak construction (25% local) 8 fulltime O&M positions Property taxes: $1 million (2006/7) 50 Wyoming companies subcontracted during the construction period Located in Uinta County, WY (population 20,213) Owned by FPL Energy Constructed in 2003 Wyoming Wind Energy Center

Energy-equivalent new wind vs. new coal in Ohio

Ohio – Economic Impacts from 1000 MW of new wind development Payments to Landowners: $2.7 Million/yr Local Property Tax Revenue: $22 Million/yr Construction Phase: 1,550 new jobs $189 M to local economies Operational Phase: 250 new long-term jobs $21 M/yr to local economies Construction Phase: 1,400 new jobs $125 M to local economies Operational Phase: 300 local jobs $30 M/yr to local economies Wind energy’s economic “ripple effect” Construction Phase = 1-2 years Operational Phase = 20+ years Total economic benefit = $1.3 billion New local jobs during construction = 2,950 New local long-term jobs = 550 Direct ImpactsIndirect & Induced Impacts Totals (construction + 20yrs) All jobs rounded to the nearest 50 jobs; All values greater than $10 million are rounded to the nearest million

Environmental Benefits No SOx or NOx No particulates No mercury No CO2 No water

Key Issues for Wind Power Policy Uncertainty Siting and Permitting: avian, noise, visual, federal land Transmission: FERC rules, access, new lines Operational impacts: intermittency, ancillary services, allocation of costs Accounting for non-monetary value: green power, no fuel price risk, reduced emissions

Increasing Attention in North America IEEE Power Engineering Society Magazine, November/December 2005 Updated in 2007 Wind Power Coordinating Committee Wind Super- Session, Summer 2008 Utility Wind Integration Group (UWIG): Operating Impacts and Integration Studies User Group

Integrating Wind into Power Systems

State of the Union Address “…We will invest more in … revolutionary and…wind technologies” Advanced Energy Initiative “Areas with good wind resources have the potential to supply up to 20% of the electricity consumption of the United States.” A New Vision For Wind Energy in the U.S.

“The future ain’t what it used to be.” - Yogi Berra

10% Available Transmission 2010 Costs w/ PTC, $1,600/MW-mile, w/o Integration costs

What does 20% Wind look like? Source: AWEA 20% Vision

National and state policy uncertainty Mixed stakeholder perspectives and knowledge Electricity supply planning based on capacity Variable wind output viewed as unreliable Incomplete comparative generation assessments Mismatch of wind and transmission development timeframes Federal lending all source requirements for G&T’s Lack of interstate approach to transmission development Lack of utility financial incentives to own wind facilities High cost and low turbine availability for community projects High cost and permitting challenges of <1 MW turbines Uncertainty in emerging emissions REC markets Market Challenges

Great Lakes Region – Economic Impacts From the 20% Vision (61.5 GW new development from Onshore and Offshore) Direct Impacts Payments to Landowners: $156 Million/year Local Property Tax Revenue: $640 Million/year Construction Phase: 91.3 thousand new jobs $12.0 Billion to local economies Operational Phase: 14.9 thousand new long-term jobs $1.4 Billion/yr to local economies Construction Phase: 91.3 thousand new jobs $9.3 Billion to local economies Operational Phase: 14.2 thousand local jobs $1.5 Billion/yr to local economies Wind energy’s economic “ripple effect” Construction Phase = 1-2 years Operational Phase = 20+ years Indirect & Induced Impacts Totals (construction + 20yrs) Total economic benefit = $79 Billion New local jobs during construction = 182,600 New local long-term jobs = 29,100

20% Wind Vision Employment

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Fuel Savings From Wind Reduction in National Gas Consumption in 2030 (%) Natural Gas Price Reduction in 2030 (2006$/MMBtu) Present Value Benefits (billion 2006$) Levelized Benefit of Wind ($/MWh) 11% Electricity Sector Fuel Usage

Electric Sector CO 2 Emissions

Incremental direct cost to society$43 billion Reductions in emissions of greenhouse gasses and other atmospheric pollutants 825 M tons (2030) $98 billion Reductions in water consumption8% total electric 17% in 2030 Jobs created and other economic benefits 140,000 direct $450 billion total Reductions in natural gas use and price pressure 11% $150 billion Net Benefits: $205B + Water savings Results: Costs & Benefits

12 Key Messages 1.Wind energy provides multiple benefits at the national, regional, state, and local levels 2.Targeted messages and education are needed for the diverse set of stakeholder interests and perspectives, including regional variations in same. 3.Convergence of energy security, carbon liability and fuel uncertainty concerns is likely to transform the market for US electricity supply. 4.Federal and state policies are needed for a diversified and robust wind energy portfolio 5.Community and distributed wind are important building blocks for public acceptance of a 20% wind future. 6.Resource planning and procurement should maximize use of low marginal cost, zero-emissions energy resources, which displace more expensive fossil fuel

12 Key Messages con’t. 7.All environmental (including water savings) and economic impacts and risks should be included in comparative resource economics. 8.Wind is the crop of the 21st Century for rural America, and the resulting economic benefits need to be included in comparative assessments of generation options. 9.Wind deployment can ramp up rapidly and incrementally to meet local and regional load growth. 10.The federal sector (both facilities and transmission) represents significant opportunities for leadership in use and transmission of wind. 11.Meeting most load growth with wind power buys time for the development and commercialization of advanced coal technologies able to sequester carbon. 12.In air quality markets, policies need to be crafted carefully to account for non-emitting technologies.

Conclusions 20% wind energy penetration is possible 20% penetration is not going to happen under business as usual scenario Policy choices will have a large impact on assessing the timing and rate of achieving a 20% goal Key Issues: market transformation, transmission, project diversity, technology development, policy, public acceptance 20% Vision action plan: Spring 2008 Source: AWEA 20% Vision

MISO-PJM Wind Integration Study Note: Nebraska and most of South Dakota are not in MISO, but are within the study footprint.

Regional Wind Energy Institutes (RWEI) Why is there no wind development in AZ, NV, UT, MI, IN, OH, MD, VA, NC?

WPA State Summit “I think your annual states summit has evolved into one of the best – maybe even the best – wind-information-transfer events of the year. My guess is that it raises the productive energy level of all who participate.” Ed DeMeo – June 12, 2007

“ With public sentiment nothing can fail; without it, nothing can succeed.” - A. Lincoln

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