How the U.S. can stay the global wind leader
The Global Wind Energy Council reported Monday:
The United States passed Germany to become world #1 in wind power installations, and China’s total capacity doubled for the fourth year in a row. Total worldwide installations in 2008 were more than 27,000 MW … 36% more than in 2007 …
Global wind energy capacity grew by 28.8% last year, even higher than the average over the past decade, to reach total global installations of more than 120.8 GW at the end of 2008.
It just goes to show what this country can do with intelligent and (somewhat) consistent government policies — state-based renewable electricity standards and a federal tax credit (see “U.S. wind energy grows by record 8,300 MW“).
But the race is on for global leadership, and China is poised to be our major contender, as it “once again doubled its installed capacity by adding about 6.3 GW, reaching a total of 12.2 GW”:
In its response to the financial crisis, the Chinese government has identified the development of wind energy as one of the key economic growth areas.
“In 2009, new installed capacity is expected to nearly double again, which will be one third or more of the world’s total new installed capacity for the year,” said Li Junfeng, Secretary General of the Chinese Renewable Energy Industry Association (CREIA).
At this rate, China would be well on its way to overtake Germany and Spain to reach second place in terms of total wind power capacity in 2010. China would then have met its 2020 target of 30 GW ten years ahead of time.
The growing wind power market in China has also encouraged domestic production of wind turbines and components, and the Chinese manufacturing industry is becoming increasingly mature, stretching over the whole supply chain.
“Now, the supply is starting to not only satisfy domestic demand, but also meet international needs, especially for components,” said Li Junfeng. “In 2009, Chinese companies will start to enter the UK and Japanese markets, and orders for 200 blades have already been placed. There are also ambitions for exploring the US market in the coming years.”
President Barack Obama, however, has pledged to “double the production of alternative energy in the next three years,” which means doubling wind. That would mean another 25 GW of wind for a U.S. total of 50 GW by the end of 2012.
What is the medium-term potential for wind in this country? That was laid out by a remarkable report from the Bush DOE last year, that said wind can be 20 percent of U.S. power by 2030 — with no breakthroughs and that found:
- Annual installations need to increase by only a factor of three from current levels by 2018.
[Actually U.S. installations now need to increase by only about 50 percent from 2008 levels by 2013 to achieve the 20 percent goal!]
- Costs of integrating intermittent wind power into the grid are modest. Twenty percent wind can be reliably integrated into the grid for less than 0.5 cents per kWh.
- No material constraints currently exist. Although demand for copper, fiberglass and other raw materials will increase, achieving 20 percent wind is not limited by the availability of raw materials.
- This would require 300,000 MW of wind, delivering electricity for about 6 to 8.5 cents per kilowatt hour, unsubsidized (i.e. no federal tax credit) and including the cost of transmission to access existing power lines within 500 miles of wind resource [new nuclear is currently over 20 cents/kwh (see here)].
- The 20% Wind Scenario could require an incremental investment of as little as $43 billion NPV [net present value] more than the base-case no new Wind Scenario. This would represent less than 0.06 cent (six one-hundredths of 1 cent) per kilowatt-hour of total generation by 2030, or roughly 50 cents per month per household.
The benefits the country gets for this small incremental investment are staggering:
- Reduce carbon dioxide emissions from electricity generation by 25 percent in 2030.
- Reduce natural gas use by 11%;
- Reduce water consumption associated with electricity generation by 4 trillion gallons by 2030;
- Increase annual revenues to local communities to more than $1.5 billion by 2030; and
- Support roughly 500,000 jobs in the U.S., with an average of more than 150,000 workers directly employed by the wind industry.
That certainly qualifies as a no-brainer. How do we get there? The three most obvious policies are:
- Continuing the production tax credit for wind
- A 25 percent renewable electricity standard for utilities by 2025
- A cap-and-trade system that results in a significant price for carbon
The stimulus bill will include the first policy, presumably with refundability. The major energy bill that will be enacted later in the year will almost certainly include the second policy. And I expect Obama will get the climate bill next year, though that probably won’t get a significant price for carbon for at least five years. We should have the first two in place lasting until carbon dioxide is, say, consistently over $40 a ton.
Wind power must be the cornerstone of any serious climate policy. At the same time, we certainly need an aggressive push on plug-in hybrids, to help enable the massive ramp up wind, especially post-2015, by providing a storage system that can take up the excess night-time wind. Now throw in an aggressive push on energy efficiency, solar PV, solar thermal baseload — and you can finally start seriously reducing U.S. carbon dioxide emissions without raising the nation’s energy bill (see “An introduction to the core climate solutions“).