A Story of Three Figures
The wind
energy world seems to be dominated by discussions of the Production Tax Credit (PTC),
and one cannot help but be concerned about how the uncertainty over the future
of this policy is resulting in job losses across our country and especially in
the Great Lakes region. But it may be helpful to take a broader look at the
wind industry and recently released analyses that provide us with a few
sunbeams in the long-range forecast: the Renewable Energy Futures Study, A Systematic
Review and Harmonization of Life Cycle GHG Emission Estimates for Electricity
Generation Technologies, and two analyses that examine the future of U.S. natural
gas markets. It is important to note that most of these works were funded by U.S.
Energy Department, which also helps support the Great Lakes Wind Collaborative.
Although each
analysis is significant, in combination these three studies paint a picture
that I think everyone in the wind industry should remember as we look to a very
uncertain next few years, both in the wind industry and the energy industry as
a whole.
The Renewable Energy Futures Study (http://www.nrel.gov/analysis/re_futures/) examines the electrical energy
market until 2050 and is the most comprehensive and complete projection of how
our electric market sector could look if renewables provided a larger
percentage of the nation’s electrical energy needs. The study also includes a
robust assessment of the nation’s grid infrastructure and considers only
technologies that are available today, so it does not include any assumptions
of huge efficiency improvements that may never be realized. The report clearly
indicates that a future in which more than 80% of the nation’s electrical
energy comes from renewables (including wind, solar, hydro, and bio-power) is
very possible, from technical and economic standpoints. In this analysis, wind
provides the largest portion of the nation’s energy portfolio expansion (almost
450 gigawatts by 2050), while fast-acting natural gas plants provide much of
the stability and power back-up. The website for the study (provided above) portrays
not only how the power system changes over time but also the expected flow of
power across the nation each year until 2050.
The breakthrough work on the Harmonization of
Life Cycle GHG Emission Estimates for Electricity Generation Technologies study
examines more than 2,000 analyses of carbon emissions of greenhouse gasses from
across the electric sector (http://en.openei.org/apps/LCA/) and provides an international consensus
of the emissions of different electrical energy technologies. It should be no
surprise to anyone that wind is one of the lowest lifecycle emitters of
greenhouse gasses, slightly higher than hydropower and ocean energy
technologies and lower than all of the other renewables and nuclear. On the
website, turn off the markers on the interactive chart for coal and natural gas
to see the differences among all technologies.
The last analysis
comes from a series of reports discussed at the 2012 Wind Powering America All
States Summit and highlights the understanding that the convergence where natural
gas overtakes coal as the prime producer of electric power in the U.S. is near,
if not already passed (some say it happened last month). With natural gas becoming
the new dominant provider of electrical energy, the nation becomes much more
dependent on a fuel source that is tied to international pricing and has historically
demonstrated price volatility due to a variety of market pressures. In
presentations by Mark Bolinger of Lawrence Berkeley National Laboratory and
Jeffrey Logan of the National Renewable Energy Laboratory, we see that the cost
of natural gas in the near future ranges greatly. Bolinger’s figures (soon to
be released as part of the 2011 Wind Technologies Market Report) show the cost
of energy from natural gas within the next 5 years ranging from below $40 per
megawatt-hour to more than $100 per megawatt-hour. This clearly lies in a range
where wind, even without the PTC, can play a strong hedge against potential
market fluctuations. Logan’s upcoming report also shows that without the PTC,
wind at good sites is economic when compared to natural gas at within the $5 to
$6 per MMBtu range. This is well within the range of predicted natural gas prices
given the market uncertainties, including expected continuing retiring of coal
plants, liquefied natural gas export infrastructure development, expanded
industrial usage, and expanding use of natural gas as a transportation fuel.
Everyone who
has worked in the wind industry for at least the past 5 years knows that the
energy industries can be turbulent from year to year. To many energy industry
workers facing a potential pink slip, whether a coal miner in Pennsylvania or a
manufacturer of roller bearings for wind turbines in Michigan, my words will
ring with a decidedly hollow tone, but I have to say that the long-term
prospects for the wind industry are very bright. The results of these studies
-- wind can play a strong role in any renewable energy electricity future, wind
technologies are one of the best energy options to address the ongoing climate
crisis, and the truly critical need to hedge the industry’s headlong rush into
a power sector dominated by natural gas -- add to the long list of wind
energy’s positive attributes. For the long term, the wind industry is one of
the few in which success is as guaranteed as the power industry currently
allows.
Ian
Baring-Gould
National
Technical Director
Wind Powering
America
National
Renewable Energy Laboratory
