2016 Wind Technologies Market Report: Summary Ryan Wiser & Mark - - PowerPoint PPT Presentation

▶
2016 wind technologies market report summary
SMART_READER_LITE
LIVE PREVIEW

2016 Wind Technologies Market Report: Summary Ryan Wiser & Mark - - PowerPoint PPT Presentation

Feb 10, 2024 407 likes •1.09k views

2016 Wind Technologies Market Report: Summary Ryan Wiser & Mark Bolinger Lawrence Berkeley National Laboratory August 2017 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 1 2016 Wind Technologies Market

slide-1
SLIDE 1

1 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

2016 Wind Technologies Market Report: Summary

Ryan Wiser & Mark Bolinger

Lawrence Berkeley National Laboratory August 2017

slide-2
SLIDE 2

2 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

2016 Wind Technologies Market Report

Purpose, Scope, and Data:

  • Publicly available annual report summarizing key trends in the U.S. wind

power market, with a focus on 2016

  • Scope primarily includes wind turbines over 100 kW in size
  • Separate DOE-funded reports on distributed and offshore wind
  • Data sources include EIA, FERC, SEC, AWEA, etc. (see full report)

Report Authors:

  • Primary authors: Ryan Wiser and Mark Bolinger, Berkeley Lab
  • Contributions from others at Berkeley Lab, Exeter Associates, NREL

Funded by: U.S. DOE Wind Energy Technologies Office Available at: http://energy.gov/eere/wind

slide-3
SLIDE 3

3 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Report Contents

  • Installation trends
  • Industry trends
  • Technology trends
  • Performance trends
  • Cost trends
  • Wind power price trends
  • Policy & market drivers
  • Future outlook
slide-4
SLIDE 4

4 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Key Findings

  • Wind capacity additions continued at a rapid pace in 2016, w/ significant

additional new builds anticipated over next four years in part due to PTC

  • Wind has been a significant source of new electric generation capacity

additions in the U.S. in recent years

  • Supply chain continued to adjust to swings in domestic demand, but

domestic content for nacelle assembly, towers, and blades is strong

  • Turbine scaling is significantly boosting wind project performance, while

the installed cost of wind projects has declined

  • Wind power sales prices are at all-time lows, enabling economic

competitiveness despite low natural gas prices

  • Growth beyond current PTC cycle remains uncertain: could be blunted

by declining federal tax support, expectations for low natural gas prices and solar costs, and modest electricity demand growth

slide-5
SLIDE 5

5 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Installation Trends

slide-6
SLIDE 6

6 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

  • $13 billion invested in wind power project additions in 2016
  • Nearly 90% of new 2016 capacity located in the Interior region
  • First offshore project—30 MW in Rhode Island—commissioned

Wind Additions Continued at a Rapid Pace in 2016, with 8,203 MW of New Capacity, Bringing Total to 82 GW

6 12 18 24 30 36 42 48 54 60 66 72 78 84 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Southeast (annual, left scale) Northeast (annual, left scale) Great Lakes (annual, left scale) West (annual, left scale) Interior (annual, left scale) Total US (cumulative, right scale) Cumulative Capacity (GW) Annual Capacity (GW)

Installation Trends

slide-7
SLIDE 7

7 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Wind Power Represented 27% of Electric-Generating Capacity Additions in 2016

  • Over last decade, wind has

comprised 31% of capacity additions nation-wide, and a much higher proportion in some regions

Interior Great Lakes West Southeast Northeast

Installation Trends

slide-8
SLIDE 8

8 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

  • U.S. also remains a distant second to China in cumulative capacity
  • Global wind additions in 2016 were 14% below their record high in 2015

The U.S. Placed 2rd in Annual Wind Power Capacity Additions in 2016

Annual Capacity (2016, MW) Cumulative Capacity (end of 2016, MW) China 23,370 China 168,732 United States 8,203 United States 82,143 Germany 5,443 Germany 50,018 India 3,612 India 28,700 Brazil 2,014 Spain 23,074 France 1,561 United Kingdom 14,543 Turkey 1,387 France 12,066 Netherlands 887 Canada 11,900 United Kingdom 736 Brazil 10,740 Canada 702 Italy 9,257 Rest of World 6,727 Rest of World 75,576 TOTAL 54,642 TOTAL 486,749

Installation Trends

slide-9
SLIDE 9

9 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Denmark Portugal Ireland Spain Germany Romania U.K. Sweden Austria Netherlands Poland Turkey United States Italy Canada France Australia Brazil India China Mexico Japan GLOBAL Approximate Incremental Wind Penetration, end of 2016 Approximate Cumulative Wind Penetration, end of 2015 Estimated Wind Generation as a Proportion of Electricity Consumption

U.S. Lagging Other Countries in Wind As a Percentage of Electricity Consumption

Note: Figure only includes the countries with the most installed wind power capacity at the end of 2016

Installation Trends

slide-10
SLIDE 10

10 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Geographic Spread of Wind Projects in the United States Is Reasonably Broad

Note: Numbers within states represent cumulative installed wind capacity and, in brackets, annual additions in 2016

Installation Trends

slide-11
SLIDE 11

11 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Texas Installed the Most Wind Capacity in 2016; 14 States >10% Wind Energy

  • Texas had almost 3 times as

much wind capacity as the next- highest state

  • 26 states had > 500 MW of

capacity at end of 2016 (18 > 1 GW, 10 > 3 GW)

  • IA = 37% of total in-state

generation from wind; SD = 30%, KS = 30%; 14 states > 10%)

Installed Capacity (MW) Percentage of In-State Generation

Annual (2016) Cumulative (end of 2016) Actual (2016)* Texas 2,611 Texas 20,320 Iowa 36.6% Oklahoma 1,462 Iowa 6,911 South Dakota 30.3% Iowa 707 Oklahoma 6,645 Kansas 29.6% Kansas 687 California 5,656 Oklahoma 25.1% North Dakota 603 Kansas 4,451 North Dakota 21.5% Nebraska 438 Illinois 4,026 Minnesota 17.7% Minnesota 291 Minnesota 3,499 Colorado 17.3% Maine 288 Oregon 3,163 Vermont 15.4% Missouri 201 Washington 3,075 Idaho 15.2% Illinois 184 Colorado 3,026 Maine 13.9% West Virginia 103 North Dakota 2,746 Texas 12.6% Ohio 102 Indiana 1,897 Oregon 12.1% Michigan 80 New York 1,827 New Mexico 10.9% Wyoming 80 Michigan 1,611 Nebraska 10.1% New York 78 Wyoming 1,489 Wyoming 9.4% Utah 64 Pennsylvania 1,369 Montana 7.6% Colorado 61 Nebraska 1,328 Washington 7.1% Rhode Island 45 New Mexico 1,112 California 6.9% Pennsylvania 40 South Dakota 977 Hawaii 6.7% New Mexico 32 Idaho 973 Illinois 5.7% Rest of U.S. 48 Rest of U.S. 6,041 Rest of U.S. 1.0%

TOTAL 8,203 TOTAL 82,143 TOTAL 5.6%

* Based on 2016 wind and total generation by state from EIA’s Electric Power Monthly.

Installation Trends

slide-12
SLIDE 12

12 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

20 40 60 80 100 120 140 160 Wind Natural Gas Solar Storage Other Nuclear Coal Nameplate Capacity (GW) Entered queue in 2016 Total in queue at end of 2016

Interconnection Queues Demonstrate that a Substantial Amount of Wind Is Under Consideration

  • Wind = 34% of capacity in sampled 35

queues

  • Wind additions in 2016 = largest amount

since 2009

Note: Not all of this capacity will be built

  • AWEA reports 21 GW of capacity under construction or in advanced

development at end of 1Q2017

Installation Trends

slide-13
SLIDE 13

13 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

5 10 15 20 25 30 35 40

MISO / Midwest SPP ERCOT Mountain Northwest PJM ISO-New England New York ISO California Southeast

Nameplate Wind Power Capacity (GW) Entered queue in 2016 Total in queue at end of 2016

Larger Amounts of Wind Planned for Midwest, Southwest Power Pool, Texas

Note: Not all of this capacity will be built

Installation Trends

slide-14
SLIDE 14

14 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Industry Trends

slide-15
SLIDE 15

15 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Vestas and GE Captured 85% of the U.S. Market in 2016

  • Globally, Vestas, GE, and Goldwind were the top suppliers
  • Chinese suppliers occupied 4 of the top 10 spots in the global ranking,

based almost entirely on sales within their domestic market

2 4 6 8 10 12 14 16 18 20 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Turbine OEM US Market Share by MW Other REpower Acciona Clipper Suzlon Mitsubishi Goldwind Vensys Nordex Gamesa Siemens GE Wind Vestas # of OEMs Serving >1% of Yearly Market # of OEMs (right scale)

Industry Trends

slide-16
SLIDE 16

16 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Manufacturing Supply Chain Continued to Adjust to Swings in Domestic Demand

Note: map not intended to be exhaustive

  • Continued near-term

expected growth, but strong competitive pressures and possible reduced demand as PTC is phased down

  • 3 domestic manufacturing

facility closures in 2016; 2 new openings

  • Many manufacturers remain,

and “Big 3” OEMs all have at least one facility

  • Wind related jobs increased

32% from 2015, to 102,000

Industry Trends

slide-17
SLIDE 17

17 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Domestic Manufacturing Capability for Nacelle Assembly, Towers, and Blades Is Reasonably Well Balanced Against Near-Term Demand Forecasts

Industry Trends

slide-18
SLIDE 18

18 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Turbine OEM Profitability Has Generally Rebounded Over the Last Four Years

Industry Trends

slide-19
SLIDE 19

19 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Imports of Wind Equipment Are Sizable; Exports Continued to Decline in 2016

Notes: Figure only includes tracked trade categories; misses other wind-related imports; see full report for the assumptions used to generate this figure

Industry Trends

  • U.S. is a net

importer of wind equipment

  • Exports of wind-

powered generating sets decreased to just $17 million in 2016; no ability to track other wind-specific exports, but total ‘tower and lattice mast’ exports equalled $46 million

slide-20
SLIDE 20

20 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Tracked Wind Equipment Imports in 2016: 46% Asia, 40% Europe, 14% Americas

Industry Trends

Note: Tracked wind-specific equipment includes: wind-powered generating sets, towers, hubs and blades, wind generators and parts

slide-21
SLIDE 21

21 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Source Markets for Imports Vary Over Time, and By Type of Wind Equipment

  • Majority of imports of wind-

powered generating sets from home countries of OEMs, dominated by Europe

  • Significant imports of towers

from Asia, but some decline

  • ver time as tariff measures

affected imports from China and Vietnam

  • Majority of imports of blades &

hubs from China, Brazil, Europe

  • Globally diverse sourcing

strategy for generators & parts

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2005 0.6B 2006 1.4B 2007 2.8B 2008 2.8B 2009 2.6B 2010 1.3B 2011 1.3B 2012 1B 2013 0.02B 2014 0.3B 2015 0.2B 2016 0.1B Exporting Country (% of annual imports) Annual Imports

Wind-powered Generating Sets

Canada China Denmark Spain

2012 0.9B 2013 0.3B 2014 0.5B 2015 0.8B 2016 0.9B

Blades & Hubs

Spain Denmark Italy Brazil China 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2011 0.5B 2012 0.9B 2013 0.1B 2014 0.2B 2015 0.3B 2016 0.3B

Spain Canada Vietnam

  • S. Korea

Indonesia

Towers

2012 0.5B 2013 0.2B 2014 0.3B 2015 0.4B 2016 0.3B

Mexico Germany Serbia Vietnam China

Generators & Parts

Industry Trends

slide-22
SLIDE 22

22 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Domestic Manufacturing Content Is Strong for Nacelle Assembly, Towers, and Blades, but U.S. Is Highly Reliant on Imports for Equipment Internal to the Nacelle

  • Imports occur in untracked trade categories, including many nacelle

internals; nacelle internals generally have domestic content of < 20% Domestic Content for 2016 Turbine Installations in the U.S.

Towers Blades & Hubs Nacelle Assembly 65-80% 50-70% > 90% of nacelle assembly

Industry Trends

slide-23
SLIDE 23

23 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

The Project Finance Environment Remained Strong in 2016

  • Sponsors raised $6.4 billion of tax equity and $3.4 billion of debt in 2016
  • Tax equity yields drifted slightly higher, as did debt interest rates late in

the year—albeit from a particularly low starting point early in 2016

0% 2% 4% 6% 8% 10% 12% Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Tax Equity Yield (after-tax) 15-Year Debt Interest Rate (after-tax) 15-Year Debt Interest Rate (pre-tax)

Industry Trends

slide-24
SLIDE 24

24 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

IPPs Own the Majority of Wind Assets Built in 2016

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Other Publicly Owned Utility (POU) Investor-Owned Utility (IOU) Independent Power Producer (IPP) % of Cumulative Installed Capacity

Other: 43 MW (0.5%) IPP: 7,142 MW (87%) IOU: 1,017 MW (12%)

2016 Capacity by Owner Type

Industry Trends

slide-25
SLIDE 25

25 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Long-Term Sales to Utilities Remained the Most Common Off-Take Arrangement, but Direct Retail Sales Gained Ground

  • 24% of added wind capacity in 2016 are from direct retail sales; 39% of total

wind capacity contracted through PPAs in 2016 involve non-utility buyers

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Merchant/Quasi-Merchant On-Site Direct Retail Power Marketer POU IOU

% of Cumulative Installed Capacity

IOU: 2,283 MW (28%) POU: 2,014 MW (25%) Direct Retail 2,005 MW (24%) Merchant: 1,816 MW (22%) Power Marketer 81 MW (1%)

2016 Capacity by Off-Take Category

Industry Trends

slide-26
SLIDE 26

26 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Technology Trends

slide-27
SLIDE 27

27 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Turbine Nameplate Capacity, Hub Height, and Rotor Diameter Have All Increased Significantly Over the Long Term

10 20 30 40 50 60 70 80 90 100 110 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2

1998

  • 99

2000

  • 01

2002

  • 03

2004

  • 05

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Commercial Operation Year Average Nameplate Capacity (left scale) Average Rotor Diameter (right scale) Average Hub Height (right scale) Average Nameplate Capacity (MW) Average Hub Height & Rotor Diameter (m)

Technology Trends

slide-28
SLIDE 28

28 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Growth in Rotor Diameter Has Outpaced Growth in Nameplate Capacity and Hub Height in Recent Years

Nameplate Capacity Hub Height Rotor Diameter

10 20 30 40 50 60 70 80 90 100 110 120 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1998

  • 99

2000

  • 01

2002

  • 03

2004

  • 05

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Average Rotor Diameter (meters) Turbine Rotor Diameter (% of total turbines for year) Commercial Operation Year ≥120 m 110 - 120 m 100 - 110 m 90 - 100 m 80 - 90 m 70 - 80 m <70 m Average

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1998

  • 99

2000

  • 01

2002

  • 03

2004

  • 05

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Average Nameplate Capacity (MW) Turbine Nameplate Capacity (% of total turbines for year) Commercial Operation Year ≥ 3.0 MW 2.5 - 3.0 MW 2.0 - 2.5 MW 1.5 - 2.0 MW 1.0 - 1.5 MW <1.0 MW Average 10 20 30 40 50 60 70 80 90 100 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1998

  • 99

2000

  • 01

2002

  • 03

2004

  • 05

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Average Hub Height (meters) Turbine Hub Height (% of total turbines for year) Commercial Operation Year ≥100 m 90 - 100 m 80 - 90 m 70 - 80 m <70 m

Technology Trends

slide-29
SLIDE 29

29 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Turbines Originally Designed for Lower Wind Speed Sites Have Rapidly Gained Market Share

Specific Power IEC Class Specific Power by Selected IEC Class

100 150 200 250 300 350 400 450 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1998

  • 99

2000

  • 01

2002

  • 03

2004

  • 05

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Average Specific Power (W/m2) Turbine Specific Power (% of total turbines for year) Commercial Operation Year ≥180 - 200 W/m2 ≥200 - 250 W/m2 ≥250 - 300 W/m2 ≥300 - 350 W/m2 ≥350 - 400 W/m2 ≥400 - 700 W/m2 Average 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1998

  • 99

2000

  • 01

2002

  • 03

2004

  • 05

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Average IEC Class Turbine IEC Class (% of total turbines for year) Commercial Operation Year Class 3 Class 2/3 Class 2 Class 1/2 Class 1 Average

Note: Class S-2, S-2/3 and S-3 turbines are shown with hash marks in their respective bins, which are also used to calculate the average.

100 150 200 250 300 350 400 450 1998- 99 2000- 01 2002- 03 2004- 05 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Average Specific Power for IEC Class 2, 2/3, and 3 Wind Turbines (W/m2) Commercial Operation Year IEC Class 2 IEC Class 2/3 IEC Class 3 Fleet Average

Technology Trends

slide-30
SLIDE 30

30 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Turbines Originally Designed for Lower Wind Speeds Regularly Used in Lower & Higher Wind Sites; Taller Towers Mostly in Great Lakes and Northeast

By Region By Wind Resource Quality

Technology Trends

slide-31
SLIDE 31

31 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Pending & Proposed Projects Continue Trend of Even-Taller Turbines as Lower Wind Sites Appear to Be Targeted

75 80 85 90 95 100 20 40 60 80 100 120 140 160 1998-99 2000-01 2002-03 2004-05 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Pending Proposed Wind Resource Quality at 80 meters (1998-99 = 100) Total Turbine Height (meters) Commercial Operation Year Wind Resource Quality Turbine Height (actual) Turbine Height (FAA)

Technology Trends

slide-32
SLIDE 32

32 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

A Large Number of Projects in 2016 Employed Multiple Turbine Configurations from a Single OEM

Note: Turbine configuration = unique combination of hub height, rotor diameter, and/or capacities

Technology Trends

slide-33
SLIDE 33

33 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Performance Trends

slide-34
SLIDE 34

34 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Sample-Wide Capacity Factors Have Increased, but Impacted by Curtailment and Inter-Year Wind Resource Variability

Note: The wind resource index is compiled from NextEra Energy Resources reports

0% 20% 40% 60% 80% 100% 120% 0% 6% 12% 18% 24% 30% 36%

2000 10 0.6 2001 30 0.9 2002 73 2.7 2003 84 3.1 2004 106 4.5 2005 129 5.1 2006 153 8.0 2007 196 10.0 2008 240 14.9 2009 339 23.6 2010 452 33.4 2011 515 38.6 2012 600 44.7 2013 745 58.2 2014 760 59.4 2015 807 64.4 2016 675 71.5

Capacity Factor Based on Estimated Generation (if no curtailment) Capacity Factor Based on Actual Generation (with curtailment) Index of Inter-Annual Variability in Wind Generation (right scale)

# GW: # Projects: Year:

Average Capacity Factor in Calendar Year Index of Inter-Annual Variability in Wind Generation

Performance Trends

slide-35
SLIDE 35

35 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Wind Curtailment Has Generally Declined in Recent Years; Higher in MISO & ISO-NE

  • In areas where curtailment has been particularly problematic in the past –

principally in Texas – steps taken to address the issue have born fruit

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 2008 2010 2012 2014 2016 2008 2010 2012 2014 2016 2008 2010 2012 2014 2016 2008 2010 2012 2014 2016 2008 2010 2012 2014 2016 2008 2010 2012 2014 2016 2008 2010 2012 2014 2016 ERCOT MISO NYISO PJM ISO-NE SPP CAISO Wind Curtailment Rate Wind Penetration Rate Wind Penetration and Curtailment Rates 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total (all 7 ISOs)

Note: Each year, the total reflects

  • nly those ISOs for

which we have curtailment data

Performance Trends

slide-36
SLIDE 36

36 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Impact of Technology Trends on Capacity Factors Becomes More Apparent When Parsed by Project Vintage

0% 10% 20% 30% 40% 50% 60%

'98-99 23 894 '00-01 26 1,750 '02-03 34 1,979 '04-05 27 3,634 2006 20 1,738 2007 37 5,282 2008 79 8,498 2009 96 9,578 2010 47 4,632 2011 69 5,904 2012 121 13,672 2013 8 969 2014 35 4,917 2015 53 8,063

Weighted Average (by project vintage) Individual Project (by project vintage) Capacity Factor in 2016 (by project vintage) Sample includes 675 projects totaling 71.5 GW

Vintage: # projects: # MW:

Performance Trends

slide-37
SLIDE 37

37 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Trends Explained by Competing Influence of Lower Specific Power and Higher Hub Heights vs. Build-Out of Lower Quality Wind Resource Sites through 2012

  • Reversal of build-out in lower wind speed sites in 2013-2016

80 90 100 110 120 130 140 150 160 170 180 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 1998

  • 99

2000

  • 01

2002

  • 03

2004

  • 05

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Average Capacity Factor in 2016 Project Vintage

Weighted-Average Capacity Factor in 2016 (left scale) Index of the Inverse of Built Specific Power (right scale) Index of Built Turbine Hub Height (right scale) Index of Built Wind Resource Quality at 80m (right scale)

Index of Capacity Factor Influences (1998-99=100)

Performance Trends

slide-38
SLIDE 38

38 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Controlling for Wind Resource Quality and Specific Power Demonstrates Impact of Turbine Evolution

  • Turbine design changes are driving capacity factors higher for

projects located in given wind resource regimes

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Lower 188 projects 14.1 GW Medium 122 projects 15.9 GW Higher 170 projects 22.0 GW Highest 174 projects 19.1 GW Estimated Wind Resource Quality at Site Specific Power ≥ 400 (30 projects, 3.0 GW) Specific Power range of 350-400 (86 projects, 7.1 GW) Specific Power range of 300-350 (323 projects, 36.3 GW) Specific Power range of 250-300 (142 projects, 15.4 GW) Specific Power < 250 (73 projects, 9.4 GW) Sample includes 654 projects totaling 71.1 GW with a commercial operation date of 1998-2015 Average Capacity Factor in 2016

Performance Trends

slide-39
SLIDE 39

39 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Controlling for Wind Resource Quality and Commercial Operation Date Also Illustrates Impact of Turbine Evolution

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 1998- 99 2000- 01 2002- 03 2004- 05 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Project Vintage Highest Wind Resource Quality Higher Wind Resource Quality Medium Wind Resource Quality Lower Wind Resource Quality Average Capacity Factor in 2016

Performance Trends

slide-40
SLIDE 40

40 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Change in Performance as Projects Age Also Impacts Overall Trends

Note: See full report for caveats associated with this figure

60% 70% 80% 90% 100% 110% 120% 130% 140% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 71.9 63.7 58.7 57.7 44.0 37.9 33.2 23.5 15.1 9.7 8.0 4.9 4.3 2.8 2.3 0.6 0.6 819 754 715 681 545 462 400 282 200 141 118 91 83 61 36 12 9 Median (with 10th/90th percentile error bars) Capacity-Weighted Average

Years post-COD: Sample GW: Sample projects:

Indexed Capacity Factor (Year 1=100%) Sample includes projects with COD from 1998-2015

Performance Trends

slide-41
SLIDE 41

41 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Regional Variations in Capacity Factors Reflect the Strength

  • f the Wind Resource and Adoption of New Turbine

Technology

Note: Limited sample size in some regions

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% Northeast 3 projects 198 MW Southeast 2 projects 70 MW West 6 projects 581 MW Great Lakes 9 projects 995 MW Interior 68 projects 11,136 MW Weighted Average (by region) Weighted Average (total U.S.) Individual Project (by region) Capacity Factor in 2016 Sample includes 88 projects built in 2014 or 2015 and totaling 12,980 MW

Performance Trends

slide-42
SLIDE 42

42 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Cost Trends

slide-43
SLIDE 43

43 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Wind Turbine Prices Remained Well Below the Levels Seen Several Years Ago

  • Recent turbine orders in the range of $800-1,100/kW

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Announcement Date U.S. Orders <5 MW U.S. Orders from 5 - 100 MW U.S. Orders >100 MW Vestas Global Average BNEF Global Index MAKE U.S. Index Trend Line for U.S. Orders Turbine Transaction Price (2016$/kW)

Cost Trends

slide-44
SLIDE 44

44 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Lower Turbine Prices Drive Reductions in Reported Installed Project Costs

  • 2016 projects had an average cost of $1,590/kW, down $780/kW since 2009 and

2010; limited sample of under-construction projects slated for completion in 2017 suggest no material change in costs

1,000 2,000 3,000 4,000 5,000 6,000 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Installed Project Cost (2016 $/kW) Commercial Operation Date Interior (474 projects, 45,619 MW) West (175 projects, 12,380 MW) Great Lakes (98 projects, 7,513 MW) Northeast (118 projects, 4,479 MW) Southeast (15 projects, 907 MW) Capacity-Weighted Avg. Project Cost

Cost Trends

slide-45
SLIDE 45

45 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Economies of Scale, Especially at Lower End of Project Size Range

Project Size Turbine Size

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 ≤5 MW 11 MW 7 projects 5-20 MW 9 MW 1 project 20-50 MW 119 MW 3 projects 50-100 MW 790 MW 11 projects 100-200 MW 2,974 MW 19 projects >200 MW 3,232 MW 13 projects Installed Project Cost (2016 $/kW) Capacity-Weighted Average Project Cost Individual Project Cost Project size: # MW: # projects: 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 ≥1 & <2 MW 1,133 MW 17 projects ≥2 & <3 MW 5,132 MW 31 projects ≥3 MW 870 MW 6 projects Installed Project Cost (2016 $/kW) Capacity-Weighted Average Project Cost Individual Project Cost Turbine size: # MW: # projects:

Cost Trends

slide-46
SLIDE 46

46 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Regional Differences in Average Wind Power Project Costs Are Apparent, but Sample Size Is Limited

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Interior 38 projects 6,321 MW Great Lakes 3 projects 237 MW Southeast 1 project 103 MW West 2 projects 64 MW Northeast 10 projects 411 MW Installed Project Cost (2016 $/kW) Capacity-Weighted Average Project Cost Individual Project Cost Capacity-Weighted Average Cost, Total U.S.

Cost Trends

slide-47
SLIDE 47

47 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Most 2016 Projects—and All of the Low-Cost Projects—Are Located in the Interior; Other Regions Have Higher Costs

2 4 6 8 10 12 1200 1500 1800 2100 2400 2700 3000 3300 3600 3900 4200 Number of Projects CapEx ≥ (2016 $/kW) Southeast Northeast Great Lakes West Interior 200 400 600 800 1000 1200 1400 1600 1800 1200 1500 1800 2100 2400 2700 3000 3300 3600 3900 4200 Number of MW CapEx ≥ (2016 $/kW) Southeast Northeast Great Lakes West Interior

Cost Trends

slide-48
SLIDE 48

48 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

O&M Costs Varied By Project Age and Commercial Operations Date

  • Capacity-weighted average 2000-16 O&M costs for projects built in the

1980s equal $69/kW-year, dropping to $57/kW-year for projects built in 1990s, to $28/kW-year for projects built in the 2000s, and to $27/kW-year for projects built since 2010

10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Commercial Operation Date Projects with no 2016 O&M data Projects with 2016 O&M data Average Annual O&M Cost 2000-2016 (2016 $/kW-year)

Cost Trends

Note: Sample is limited; few projects in sample have complete records

  • f O&M costs

from 2000-16; O&M costs reported here DO NOT include all

  • perating costs
slide-49
SLIDE 49

49 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

O&M Costs Varied By Project Age and Commercial Operations Date

Note: Sample size is limited

  • O&M reported in figure does not include all operating costs: Statements from

public companies with large U.S. wind portfolios report total operating costs in 2016 for projects built in the 2000s of ~$55/kW-year

5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Project Age (Number of Years Since Commercial Operation Date) 1998-2005 2006-2011 2012-2015 Commercial Operation Date:

n=19

Median Annual O&M Cost (2016 $/kW-year)

n=40 n=41 n=11 n=8 n=6 n=32 n=42 n=25 n=41 n=12 n=41 n=9 n=23 n=37 n=32 n=24 n=19 n=12 n=8 n=9 n=8 n=6 n=5 n=5 n=7 n=8 n=23 n=4

Cost Trends

slide-50
SLIDE 50

50 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Wind Power Price Trends

slide-51
SLIDE 51

51 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Sample of Wind Power Prices

  • Berkeley Lab collects data on historical wind power sales

prices, and long-term PPA prices

  • PPA sample includes 414 contracts totaling 38,819 MW from

projects built from 1998-2016, or planned for installation in 2017 or beyond

  • Prices reflect the bundled price of electricity and RECs as

sold by the project owner under a PPA

– Dataset excludes merchant plants, projects that sell renewable energy certificates (RECs) separately, and direct retail sales – Prices reflect receipt of state and federal incentives (e.g., the PTC or Treasury grant), as well as various local policy and market influences; as a result, prices do not reflect wind energy generation costs

Wind Power Price Trends

slide-52
SLIDE 52

52 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Wind PPA Prices Very Low, Competitive with Levelized Fuel Cost of a Gas Plant

$0 $20 $40 $60 $80 $100 $120 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 PPA Execution Date Interior (25,382 MW, 244 contracts) West (7,421 MW, 77 contracts) Great Lakes (4,104 MW, 51 contracts) Northeast (1,436 MW, 29 contracts) Southeast (476 MW, 7 contracts) Levelized PPA Price (2016 $/MWh)

25 MW 150 MW 50 MW 200 MW

Levelized 20-year EIA gas price projections (converted at 7.5 MMBtu/MWh)

Wind Power Price Trends

slide-53
SLIDE 53

53 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

A Smoother Look at the Time Trend Shows Steep Decline in Pricing Since 2009; Especially Low Pricing in Interior Region

$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100

96-99 10 553 00-01 17 1,249 02-03 24 1,382 04-05 30 2,190 2006 31 2,436 2007 26 1,781 2008 39 3,465 2009 49 4,048 2010 49 4,790 2011 44 4,835 2012 14 1,172 2013 37 5,412 2014 17 2,015 2015 17 2,249 2016 9 1,012 2017 1 230

Nationwide Interior Great Lakes West Northeast

PPA Year: Contracts: MW:

Average Levelized PPA Price (2016 $/MWh)

Wind Power Price Trends

slide-54
SLIDE 54

54 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Relative Competitiveness of Wind Power Has Been Affected by the Continued Decline in Wholesale Power Prices

  • Wholesale price range reflects flat block of power across 23 pricing nodes across

the U.S. (and Interior)

  • Price comparison shown here is far from perfect – see full report for caveats

10 20 30 40 50 60 70 80 90 100 110

2003 9 570 2004 13 547 2005 17 1,643 2006 31 2,436 2007 26 1,781 2008 39 3,465 2009 49 4,048 2010 49 4,790 2011 44 4,835 2012 14 1,172 2013 37 5,412 2014 17 2,015 2015 17 2,249 2016 9 1,012

2016 $/MWh Nationwide Wholesale Power Price Range (by calendar year) Interior Region Wholesale Power Price Range (by calendar year) Average Levelized Wind PPA Price with 10th/90th Percentiles (by year of PPA execution)

Year: Contracts: MW:

Wind Power Price Trends

slide-55
SLIDE 55

55 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Recent Wind Prices Are Hard to Beat: Competitive with Expected Future Cost of Burning Fuel in Natural Gas Plants

  • Price comparison shown here is far from perfect – see full report for

caveats

10 20 30 40 50 60 70 80 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2016 $/MWh

Generation-weighted average wind PPA price among 44 PPAs signed in 2014-2017 Median wind PPA price (and 10th/90th percentiles) among 44 PPAs signed in 2014-2017

Range of AEO17 natural gas fuel cost projections AEO17 reference case natural gas fuel cost projection

Wind Power Price Trends

slide-56
SLIDE 56

56 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Renewable Energy Certificate (REC) Prices in Key RPS Markets Fell Significantly in 2016, Reflecting Growing Supplies

  • REC prices vary by: market type (compliance vs. voluntary);

geographic region; specific design of state RPS policies

$0 $10 $20 $30 $40 2010 2011 2012 2013 2014 2015 2016 2017

PJM

DC DE IL MD NJ OH PA $0 $20 $40 $60 $80 2010 2011 2012 2013 2014 2015 2016 2017

New England

CT MA ME NH RI 2016$/MWh $0 $2 $4 $6 $8 $10 2010 2011 2012 2013 2014 2015 2016 2017

Texas & Voluntary Market

TX

  • Vol. (nat'l)
  • Vol. (west)

Wind Power Price Trends

slide-57
SLIDE 57

57 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Levelized Cost of Wind Energy Is at an All-Time Low

  • Estimates only reflect variations in installed cost and capacity factors;

include accelerated depreciation but exclude PTC

$0 $20 $40 $60 $80 $100 $120 98-99 26 849 00-01 26 1,694 02-03 30 1,885 04-05 29 2,005 2006 23 1,820 2007 30 3,597 2008 64 6,305 2009 103 9,575 2010 63 5,129 2011 85 6,281 2012 109 9,378 2013 12 852 2014 46 5,100 2015 50 7,763 Nationwide (696 projects, 62,234 MW) Interior (383 projects, 38,730 MW) Great Lakes (72 projects, 7,231 MW) West (140 projects, 11,453 MW) Northeast (88 projects, 4,017 MW) Southeast (13 projects, 802 MW) COD Year: Projects: MW:

Average LCOE (2016 $/MWh)

Wind Power Price Trends

slide-58
SLIDE 58

58 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Policy and Market Drivers

slide-59
SLIDE 59

59 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Federal Production Tax Credit (PTC) Remains a Core Motivator for Wind Power Deployment

  • 5-year extension of PTC, plus

favorable guidance allowing 4 years for project completion after the start of construction

  • PTC phase-out, with

progressive reduction in the value of the credit for projects starting construction after 2016

  • PTC phases down in 20%-

per-year increments for projects starting construction in 2017 (80% PTC value), 2018 (60%), and 2019 (40%)

Policy and Market Drivers

slide-60
SLIDE 60

60 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

State Policies Help Direct the Location and Amount of Wind Development, but Current Policies Cannot Support Continued Growth at Recent Levels

  • 29 states and D.C. have mandatory RPS programs
  • State RPS’ can support ~3.9 GW/yr of renewable energy additions on

average through 2030 (less for wind specifically)

WI: 10% by 2015 NV: 25% by 2025 TX: 5,880 MW by 2015 PA: 8.5% by 2020 NJ: 22.5% by 2020 CT: 23% by 2020 MA: 11.1% by 2009 +1%/yr ME: 40% by 2017 NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) CA: 50% by 2030 MN: 26.5% by 2025 Xcel: 31.5% by 2020 IA: 105 MW by 1999 MD: 25% by 2020 RI: 38.5% by 2035 HI: 100% by 2045 AZ: 15% by 2025 NY: 50% by 2030 CO: 30% by 2020 (IOUs) 20% by 2020 (co-ops) 10% by 2020 (munis) MT: 15% by 2015 DE: 25% by 2025 DC: 50% by 2032 WA: 15% by 2020 NH: 24.8% by 2025 OR: 50% by 2040 (large IOUs) 5-25% by 2025 (other utilities) NC: 12.5% by 2021 (IOUs) 10% by 2018 (co-ops and munis) IL: 25% by 2025 VT: 75% by 2032 MO: 15% by 2021 OH: 12.5% by 2026 MI: 15% by 2021

Policy and Market Drivers

slide-61
SLIDE 61

61 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

System Operators Are Implementing Methods to Accommodate Increased Penetrations of Wind

Notes: Because methods vary and a consistent set of operational impacts has not been included in each study, results from the different analyses

  • f integration costs are not fully comparable.

Integrating wind energy into power systems is manageable, but not free

  • f additional costs

Transmission Barriers Remain

500 1000 1500 2000 2500 3000 3500 4000 4500 5000 2009 2010 2011 2012 2013 2014 2015 2016 Completed Transmission (miles/year) ≥500 kV 345 kV ≤ 230 kV

Policy and Market Drivers

slide-62
SLIDE 62

62 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Future Outlook

slide-63
SLIDE 63

63 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Sizable Wind Additions Anticipated for 2016-2020 Given PTC Extension; Downturn and Uncertainty Beyond 2020

  • Wind additions through 2020 consistent with deployment trajectory

analyzed in DOE’s Wind Vision report; not so after 2020

2 4 6 8 10 12 14 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 BNEF (2017a,f) MAKE (2017) Navigant 2017) IHS (2017) Annual Capacity (GW) Historical Additions Forecasts (bar = avg)

Future Outlook

slide-64
SLIDE 64

64 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Current Low Prices for Wind, Future Technological Advancement, and Direct Retail Sales May Support Higher Growth in Future, but Headwinds Include:

  • Phase-down of federal tax incentives
  • Continued low natural gas and wholesale electricity prices
  • Modest electricity demand growth
  • Limited near-term demand from state RPS policies
  • Inadequate transmission infrastructure in some areas
  • Growing competition from solar in some regions

Future Outlook

slide-65
SLIDE 65

65 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

  • Wind capacity additions continued at a rapid pace in 2016, w/ significant

additional new builds anticipated over next four years in part due to PTC

  • Wind has been a significant source of new electric generation capacity

additions in the U.S. in recent years

  • Supply chain continued to adjust to swings in domestic demand, but

domestic content for nacelle assembly, towers, and blades is strong

  • Turbine scaling is significantly boosting wind project performance, while

the installed cost of wind projects has declined

  • Wind power sales prices are at all-time lows, enabling economic

competitiveness despite low natural gas prices

  • Growth beyond current PTC cycle remains uncertain: could be blunted

by declining federal tax support, expectations for low natural gas prices and solar costs, and modest electricity demand growth

Conclusions

slide-66
SLIDE 66

66 U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

For More Information

See full report for additional findings, a discussion of the sources of data used, etc.:

  • https://energy.gov/eere/wind/downloads/2016-wind-

technologies-market-report

To contact the primary authors:

  • Ryan Wiser, Lawrence Berkeley National Laboratory

510-486-5474, RHWiser@lbl.gov

  • Mark Bolinger, Lawrence Berkeley National Laboratory

603-795-4937, MABolinger@lbl.gov

Berkeley Lab’s contributions to this report were funded by the Wind Energy Technologies Office, Office of Energy Efficiency and Renewable Energy of the U.S. Department of Energy under Contract No. DE-AC02-05CH11231. The authors are solely responsible for any omissions or errors contained herein.