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As was the case during the 2014 Polar Vortex event and the Texas 2011 cold snap, wind output was well above average when the power system needed it most. Across the Mid-Atlantic and the Northeast throughout the Bomb Cyclone event, wind production surpassed both average winter and average annual output.

By Hannah Hunt

Extreme weather events offer an opportunity to take stock of our power system—how well will it withstand days of prolonged stress? Earlier this year, the eastern half of the U.S. faced one of these trials, as the “Bomb Cyclone” blasted the region with frigid air for a number of days.

The result: no major power plant outages, and a power system that held strong in the face of challenging weather conditions. And wind power made an important contribution to a resilient energy mix, helping to keep the lights on for American families and businesses.


As was the case during the 2014 Polar Vortex event and the Texas 2011 cold snap, wind output was well above average when the power system needed it most. Across the Mid-Atlantic and the Northeast throughout the Bomb Cyclone event, wind production surpassed both average winter and average annual output.

Let’s first look at PJM, the grid operator serving 13 states and Washington, DC. From Jan. 3 through Jan. 7, wind output in PJM was 55 percent higher than average wind output in 2017. During the highest demand periods on January 3-5, wind output was consistently three to five times greater than the level PJM plans for and compensates wind for in its capacity market. Wind’s capacity factor exceeded 50 percent multiple times during the three-day period.

In New England, wind output was also well above average throughout most of the event, and more than twice its normal level during some of the most challenging periods on Jan. 5 and 6, as shown below. Wind output surpassed the region’s coal generation on those days.

Grid Operator Studies Show Values of Renewables for Resilience

In January, the New England grid operator released a report examining resilience to extreme winter weather under a range of different electric generation mixes for the mid-2020s. While initial reporting focused on scenarios that did not perform as well, a number of scenarios with higher shares of renewable generation proved to be more reliable and resilient than the current power system. In fact, three of the four of the most reliable portfolios were high renewable scenarios.

PJM’s 2017 resilience analysis also found that scenarios with very high levels of renewables were among the most resilient. PJM’s study discussed a range of other events that can cause outages at conventional power plants as well, like flooding, drought, high temperatures, and coal barge and rail congestion. Renewable resources like wind and solar PV are generally resilient to such disruptions because they are not dependent on deliveries of fuel or cooling water.

Previous studies have found that more than 96 percent of customer electric outage hours happen because of severe weather, rather than disruptions of electricity generation. High winds, falling trees and other factors knock out power lines, causing lost power. Such was the case in Puerto Rico, where the island is still recovering. The main issue wasn’t damage to its power plants, but rather the complete decimation of its transmission system. That demonstrates that building a resilient electric grid requires a diverse generation mix, as well as transmission and infrastructure upgrades.

Further analysis of the “Bomb Cyclone” can be found here.

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By Greg Alvarez

Last week I predicted it wouldn’t be long before we had more news on Fortune 500 wind power purchases. Well, a whole seven days passed before there were new deals to report.


Wind Powers the Open Road for GM

General Motors (GM) just announced wind power purchase agreements with projects in Ohio and Illinois. The automaker is buying enough wind-generated electricity to power the Ohio and Indiana factories that build the Chevrolet Cruze and Silverado, and the GMC Sierra.

“Technology is driving solutions for mobility and safety in our vehicles, as well as the new energy solutions that build them,” said Gerald Johnson, GMNA vice president of manufacturing and labor. “This is the way we do business: offering vehicles that serve our customers’ lifestyle needs while providing sustainable solutions that improve our communities.”

GM already has plans to soon power 100 percent of its Arlington, Texas, plant using wind, where more than 100,000 SUV’s are made every year. Wind’s low cost, down 66 percent since 2009, has made it an attractive option for GM as it works toward meeting its 100 percent renewable goal.

Other Buyers Jump on the Bandwagon

GM isn’t alone in the headlines this week. Kimberly-Clark, maker of products like Kleenex and Huggies, also announced a new wind deal in recent days. The company will soon source about 33 percent of its electricity needs from wind farms in Oklahoma and Texas.

“It’s a powerful demonstration of sustainability initiatives having both great environmental and business benefits,” said Lisa Morden, Kimberly-Clark’s global head of sustainability.

Why Wind Power Makes Sense for the Fortune 500

Two recent reports looked at why companies like GM and Kimberly-Clark are pouncing on wind power.

David Gardiner and Associates examined the recent trend of manufacturers committing to buying renewables in a new report entitled “The Growing Demand for Renewable Energy among Major U.S. and Global Manufacturers.”

David Gardiner and Associates surveyed 160 large U.S. manufacturers, finding that 40 currently have a renewable energy goal in place, and 18 of those 40 have 100 percent renewable targets.

The following 10 states host the most factories for those 18 companies: California, Texas, Ohio, Missouri, Illinois, Michigan, Oregon, Pennsylvania, Tennessee and North Carolina.

The report adds that manufacturers invest in renewable energy to lower energy costs, secure stable, low-risk energy prices and demonstrate corporate leadership. GM CEO Mary Barra confirms that “pursuit of renewable energy benefits our customers and communities through cleaner air while strengthening our business through lower and more stable energy costs.”

Meanwhile, Greentech Media and Apex Clean Energy surveyed 153 large corporate buyers to see what motivates companies to invest in wind.

Eighty-four percent of respondents plan to actively pursue or consider directly buying renewables over the next five to 10 years, and 43 percent plan to be more aggressive in the next 24 months. Sixty-five percent report price as a leading factor in determining purchases.

So yet again, expect to hear more on this trend before long.

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Improvements in wind project financing structures will enable further cost reductions. Shifting away from equity to debt and using innovative financing mechanisms like yieldcos will reduce financing costs and the bottom-line cost of wind energy.

Confirming the economic tailwinds for wind energy, Pattern Energy CEO Mike Garland forecasts wind energy prices will settle between $30-$40/MWh as the PTC phases out and into the long term. The company is already seeing significant improvements in energy production and cost for wind projects the company is bidding for delivery post-2020.

By John Hensley

Fresh off the first-ever American Wind Week, the Department of Energy (DOE) National Renewable Energy Laboratory (NREL) released a new report finding wind energy cost reductions of 50 percent are possible by 2030. That’s on top of the 66 percent cost reduction since 2009.

Envisioning the wind plant of the near-future—a “collection of intelligent and innovative machines operating in a highly coordinated way”—NREL expects advancements in wind turbine design, materials and controls to unlock major performance improvements and cost reductions.


Advanced turbines will produce significantly more electricity, allowing wind to provide the lowest-cost form of electricity in many states and regions, without any policy incentives. NREL’s findings demonstrate how the federal wind Production Tax Credit (PTC) is successfully driving economies of scale and efficiency improvements, and address concerns that wind power deployment will drop as the PTC phases down.

Wind Cost Projections

Prior to NREL’s report, the most recent evidence foreshadowing further wind power cost reduction came from a 2016 study funded by the DOE. Surveying experts around the world, that study found anticipated cost reductions ranged from 24 to 30 percent by 2030. Under more aggressive circumstances, experts predicted cost reductions as high as 40 percent as research and development programs and technology learning lead to additional efficiencies, as shown below.

Lawrence Berkley National Laboratory

Building on these projections, NREL predicts a “SMART” wind plant of the future will be able to achieve even further cost reductions—up to 50 percent by 2030. The wind turbine of the future will be much larger, sit atop a taller tower, use next generation blades, and incorporate intelligent controls and remote monitors. Towers reaching 135 meters will access more consistent wind resources, while next-generation blades stretching more than 70 meters will help the wind turbine capture more of that resource as efficiently as possible. This will enable capacity factors more than 50 percent, all while the installed cost per kilowatt falls and plant life expectancy grows.

On an unsubsidized basis, these improvements and cost reductions will drive the levelized cost of wind energy from roughly $55/megawatt hour (MWh) in 2015 to $31/MWh in 2030.

Capital Stack Shifts to Enable Further Cost Reductions

Improvements in wind project financing structures will enable further cost reductions. Shifting away from equity to debt and using innovative financing mechanisms like yieldcos will reduce financing costs and the bottom-line cost of wind energy.

Recognizing this eventual shift to higher debt-to-equity rations, NREL estimates that the cheaper capital stack will unlock a further $8/MWh reduction in wind energy costs (falling from $31/MWh to $23/MWh on an unsubsidized basis) by 2030, as indicated below.

Comparison to Other Findings

A number of presentations and market analyses this year confirm that the cost reductions NREL projects are achievable—and, in a few cases, too conservative.

Let’s begin with the Goldman Sachs Group Inc. In a recent report, the investment bank concludes that “the U.S. power sector already appears in the early stages of a technological mix revolution given a combination of political, technological and now social tailwinds driving improved economics and demand for renewables.” Goldman predicts new wind and solar capacity of more than 200 gigawatts (GW) by 2030, primarily driven by economics.

Confirming the economic tailwinds for wind energy, Pattern Energy CEO Mike Garland forecasts wind energy prices will settle between $30-$40/MWh as the PTC phases out and into the long term. The company is already seeing significant improvements in energy production and cost for wind projects the company is bidding for delivery post-2020.

Most tellingly, NextEra Energy Resources anticipates even more aggressive wind cost reductions. The largest owner of wind power capacity in the U.S. expects wind power to be the lowest cost energy resource in the post-2020 period on an unsubsidized basis, ranging from $20-$30/MWh.

This aggressive cost trajectory is consistent with the industry’s history of beating even the most aggressive cost projections. In 2008, DOE predicted (page 148, converted to 2016 dollars) that the U.S. wind industry could reduce wind costs to $1,850/kW by 2030. By 2016, the industry had already beaten that projection and driven costs down to $1,587/kW. That 2008 DOE study also estimated that the best wind sites could reach capacity factors of 36 percent by 2015 and 38 percent by 2030. Wind projects installed in 2014 and 2015 have an average capacity factor of 42.6 percent, beating DOE’s 2030 target by a wide margin 15 years early.

Conclusion

Progress towards the wind power plant of the future is predicted to unlock substantial additional cost reductions. In 2030, NREL expects unsubsidized LCOEs to range from $19/MWh to $32/MWh, with the central expectation at $23/MWh. At these cost levels, wind energy will be competitive with all other energy sources across much of the U.S., providing a win-win for consumers and public health.

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