Predictions of the wind industry flatlining have been the subject of seminars, conferences and white papers for the past year, but it seems like they have been a bit premature. Despite some major setbacks in the past couple of years, wind and solar are still the fastest-growing sources of electrical energy around the world.
The electric utility customer base looks on them as clean, as environmentally friendly and as a local resource, and wants them. The latest figures for global wind capacity were published by the Global Wind Energy Council (GWEC) in its “Global Wind Report - Annual Market Update 2011.” GWEC reports 40,564 MW of new wind generation were installed in 2011, which represents investments of about US$68 billion.
The world's total wind capacity is now 237,669 MW, which reflects an increase of nearly 21% for the past year. According to the GWEC report, more than 75 countries have commercial wind-power installations. The report also noted 22 of them have passed the 1,000-MW mark, but it is really interesting to see who the leaders are.
GWEC stated Europe increased its total wind-generation capacity to 29,060 MW by adding 10,281 MW in 2011.
Asia increased its wind capacity by 82,029 MW after installing 20,929 MW, most of which came from China (17,631 MW). Interestingly, China's total wind generation is 62,364 MW. It is predicted Asia will take over the position of the world's No. 1 wind power in 2012.
In the Western Hemisphere, Latin America has installed a total of 2,330 MW of wind generation. North America's total installed wind generation is now 52,753 MW, with the United States accounting for 46,919 MW. According to the American Wind Energy Association's (AWEA) annual report, 31% of all new power plants constructed in the United States in 2011 were wind farms.
AWEA focused some attention on smaller wind projects when it recently published its “2010 U.S. Small Wind Turbine Market Report.” The report noted these small wind systems grew by 26%, or 25.6 MW, in 2010.
Interestingly, these small wind projects represented more than 8,000 individual systems in 2010 and were worth about $139 million in sales. The total installed small wind capacity represents about 179 MW in the United States, but the really exciting aspect is the fact it is about 144,000 individual systems and annually displaced 161,000 metric tons of carbon dioxide.
AWEA's report indicated 90% of these small urban wind turbines are grid connected. “Three-fourths are rated 10 kW or less, and one-fifth are rated 11 kW to 50 kW.” The average installed cost of these small wind turbines was $5,430/kW. AWEA's report also pointed out, “Small wind is preparing to compete for its place in the distributed energy marketplace.”
It is not just the U.S. market, either; Europe reports similar statistics. A 2010 German study reported there was more than 27,000 MW of installed wind generation. Nearly 90% of that wind generation was installed in systems less than 20 MW, most ranged between 1 MW and 5 MW. The study pointed out more than half of the roughly 43,000 MW of installed total renewable energy in Germany was owned by individuals and farmers.
Sorting It Out
These studies are changing the perspective of what most utilities think about when wind generation is mentioned. These smaller projects fit into the community better than large wind farms. Manufacturers such as Thomas & Betts have developed space-saving tower designs with smaller footprints to match the smaller spaces available in community facilities without sacrificing strength, reliability or safety.
“Large wind projects have been very active in the last couple of years, but these projects are slowing down due to the uncertainty with tax incentives, which impacts financing,” reported Jim Mulhern, vice president of market planning and business development for Henkels & McCoy Inc. “The smaller wind projects are still going strongly but are challenging utilities, RTOs [regional transmission organizations] and ISOs [independent system operators]. Utility-scale wind farms share dispatch information regionally for dynamic scheduling by ISOs and RTOs. The smaller facilities do not have this ability, but it is necessary and will attract attention.”
So, what is considered small in relation to ratings? One wind authority stated wind systems can be categorized as small, community and utility-scale. It defined small turbines as less than 100 kW, community turbines between 100 kW and 1.5 MW, and utility-scale turbines above 1 MW.
Valmont Industries has developed several structures specifically for small wind turbines (those up to 100 kW) and mid-sized wind turbines (between 100 kW and 1 MW) using monopoles. It offers slip-joint, flange and shear plate designs, but one interesting option is the hydraulic tilt-up towers for crane-free installations.
Community wind projects are wind projects supported by a local governing body, owned by community members or that benefit the community. In other words, a group of local stakeholders has a personal stake in the success of the wind project. Several groups use the terms “distributed wind generation” and “community wind systems” interchangeably. Community generation also seems to be used on both sides of the meter, whereas distributed generation traditionally takes place on the customer side of the meter.
For that matter, distributed generation is normally thought of as wind, solar, fuel cells or diesel generators. It is reminiscent of the early days of smart grid when there was little, if any, consensus concerning terms and definitions.
For continuity, say a community wind project benefits the community and covers projects from kilowatts to megawatts. It can include a few individuals or several community institutions. Community wind projects also can include independent power producers who will join with local interest to fund, develop and operate the wind system. Truly, size does not seem to matter in the overall picture of community wind projects.
Lawrence Berkeley National Laboratory published a report, titled “Community Wind: Once Again Pushing the Envelope of Project Finance,” that identified some interesting new and creative financing methods being used to develop community wind projects. The laboratory cited a project in Maine that combined low-cost government debt with local tax equity for a 4.5-MW project. There also was a sale or lease-back arrangement for a 25.3-MW project in Minnesota. In South Dakota, a 10.5-MW project was financed by an intrastate offering of both debt and equity.
In addition to these, structures are also using pass-through leasing, a variety of state and federal incentives, and the special-allocation partnership “flip” structure. The flip structure, where a local project is sponsored by partners with a larger investor to fund the project, is getting a lot of interest. The major investor receives cash and tax benefits for the first 10 years. At 10 years, the investor turns majority ownership over to the local sponsor, which is the flip.
No matter how they are packaged, these community wind projects are increasing capacity and helping people in the process. A good example is Alaska's power grid. It has a lot of remote communities that are small, isolated and powered by diesel generation, which is expensive and adds to the carbon footprint.
As a result of the Alaska Energy Authority's Renewable Energy Fund, more than 20 communities in Alaska are using wind power to stabilize their energy costs with sites under construction. The village of Unalakleet, made popular by the Discovery Channel's “Flying Wild Alaska,” has six Northern Power 100 turbines, manufactured by Northern Power Systems. These turbines generate enough electricity to power 86 homes in the town. The wind farm's website estimates, since the turbines went into service in 2009, residents have saved more than $417,000 based on electricity generated at $0.20/kWh.
Michels Wind Energy, a division of Michels Corp., is building the Eva Creek Wind Farm for the Golden Valley Electric Association. Eva Creek is the northern-most wind farm in North America. When finished, it will have 12 of REpower's cold-climate NM92 turbines producing 24.6 MW. Michels also is building the Cashton Greens Wind Farm, which is Wisconsin's first community wind project. It will have two turbines and generate 5 MW. This project is being built for Organic Valley and Gunderson Health Care System.
Located in Minnesota, the Grant County 20-MW Wind Farm is a Community-Based Energy Development (C-BED) project. C-BED is a Minnesota initiative to optimize local and regional agricultural and economic resources that allows the interconnection of smaller wind farms to the larger power grid and cost sharing. This project is in partnership with Suzlon Energy Ltd., Juhl Wind Inc., Olympus Power and the local partnership. It is connected to Otter Tail Power Co. and Xcel Energy, and has 10 2.1-MW Suzlon S88 turbines.
The definition of community in community wind projects is flexible. For example, take First Wind's 69-MW Kawaiho wind project, which combines an independent power producer, a local landowner, a utility and community involvement. It will have 30 2.3-MW Siemens turbines. The project broke ground in February 2012 after the Hawaii Public Utility Commission approved the power agreement between Hawaiian Electric Co. and First Wind. It is being built at the Kamehameha Schools' Kawailoa Plantation on Oahu's North Shore, which is an integral part of the neighboring community.
Kamehameha Schools worked with First Wind, Hawaiian Electric and the community for several years prior to the start of the project. The project began with community leaders and organizations along with residential groups taking part in all aspects of the project development. The first meetings were gatherings of area kūpuna (Hawaiian elders). Kamehameha Schools' support of the North Shore's community made the Kawailoa Wind project a true community collaboration.
In China, wind generation has become a big challenge for everyone involved, but the concept of community has caused some real problems on its grid. Keep in mind, China has been doubling its wind capacity every year since 2004, and many predictions have China exceeding 100,000 MW by 2015. There is a lot of pressure to get things done and quickly.
Developers have taken advantage of a loophole in the national wind polices — the local wind project. If a wind farm is smaller than 50 MW, it is a local project. Local projects are not subject to national regulations and only need approval by the local government. It is not uncommon for developers to break up large wind farms, from several hundreds of megawatts, into many smaller installations, each under the 50-MW rating, to avoid the national approval process.
Unfortunately, these local governmental designations are for projects connected to the community and not meant for projects requiring grid integration. Applying local to the project may speed things up in the short term but not over the long term. Developers get a series of wind farms, but they do not get access to the grid, which requires transmission facilities.
China's National Development and Reform Commission needs local wind project transmission access to bring the power to the load centers. It is a complex issue requiring a great deal of study to define what must be built. Time is needed to design and build those facilities. Because of these problems, it is estimated only about 60% of these local wind projects ever get connected to the grid.
Distributed wind generation refers to a trend more than a specific. It is referred to as small wind, local wind or community wind, all of which tend to be used interchangeably and add to the confusion on the part of so much of the industry.
No matter what it is called or where it is installed, customers are embracing this smaller wind concept. They are purchasing and running their own electrical power systems in greater numbers. It could be seen as a disruptive technology.
This technology certainly has the ability to impact the electric power industry as it has so many other industries. It is not hard to see the similarities of distributed wind generation and the telephone industry with cell phones or mainframe computers with the personal computer.
Grid-connected distributed renewable generation offers support to the central generation station, which provides most of the power to the grid. Smaller wind is ideal for meeting peak demands when combined with energy storage. Only time will tell how it will all play out, but the electrical grid will certainly become stronger with renewable distributed generation.