Environmental Engineering Reference
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States at $85/MWh or less. This amount of capacity is equivalent to roughly 8 times the
existing net summer generating capacity in the country, which is estimated at 986 GW [EIA
2008]. This wind power price, however, excludes the cost of transmission or integration.
The supply curve in Figure 13-2 uses 2008 wind technology cost and performance fig-
ures, which are projected to improve with future technology development. The current bus-
bar energy costs, based on the wind plant only (excluding transmission and integration costs
and Production Tax Credits and other incentives), vary by type of site and the wind power
class. Onshore sites are less costly than offshore, and higher wind classes offer more pro-
ductivity that reduces the
cost of energy
(COE). Depending on the scenario assumed, from
120,000 MW to 300,000 MW of installed wind power is projected to be in place by the year
2030, according to DOE studies. A similar overseas study shows that as much as one-third of
the electricity in Europe could technically be produced from wind energy [Van Wijk 1993].
Changing Energy Mix
In recent years, interest in wind as an energy source has fluctuated, responding mainly
to the availability and price of fossil fuels and environmental regulations. Initial growth in
the wind industry occurred in response to the 1973 oil embargo when oil prices doubled,
as illustrated in Figure 13-3. Oil prices dramatically increased again prior to the Iran/Iraq
war. During that period utilities were generating about 16 percent of U.S. electricity from
heavy oil and 2 percent from natural gas. By 2000, fossil fueled electric power generation
had shifted to 18 percent natural gas and 2 percent oil, due to oil supply shortages and price
fluctuations combined with new atmospheric emission regulations.
In the future, a combination of restrictions on atmospheric carbon and nitrogen emissions
from coal-fired plants, carbon sequestration costs, price increases resulting from the neces-
sary use of imported liquefied natural gas, and unresolved nuclear waste disposal issues are
likely to cause more power price increases and restrictions. These fossil-fuel economic and
supply issues, combined with wind energy technology improvements have now made wind
the fastest growing power source for electricity worldwide for the fourth straight year. In the
United States, wind power contributed 35 percent of all new generating capacity added during
2007, an amount that is up from 19 percent in 2006 and 12 percent in 2005, compared to less
than 4 percent in 2000-2004.
An important driver of introduction of wind energy into the changing energy mix was the
establishment of
Renewable Portfolio Standards
(RPS) beginning in about 2000. Texas led
the way by passing a law with the goal of adding 2,000 MW of renewable generating capacity
by 2009, through a renewable energy credit trading system that included a significant penalty
for any utility that did not meet its quota. The penalty was the lesser of $50 per MWh or
200 percent of the average market value of credits for that compliance period. The Texas pro-
gram exceeded initial expectations, so its goal was increased several times. By the beginning
of 2009 more than 7,000 MW of wind power had been installed in the state.
By 2008, 25 states and the District of Columbia have set RPS goals, which are typically
25 percent renewable energy in 5 to 10 years. Wind has been fulfilling about 60 percent of
these goals, because it is often the least-cost renewable source. Some states have set separate
allocations for solar and other renewable technologies. If the current RPS policies are ful-
filled it is projected that 60 GW of new renewable capacity will be added by 2025, much of
it be wind power. Legislation establishing a national RPS has been proposed.
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