Opportunities Energize Major Investment
By Susan H. Burnell
Clean, carbon-free and renewable, wind power is a resource that can energize the future. Already, the U.S. wind power industry has the capacity to power 1.5 million American households. Last year alone, capacity jumped 45%. New wind technology and wind turbine installations are under way on an unprecedented scale and schedule. The benefits of wind power are now entirely within reach.
Rising energy costs and concerns about the environment are speeding the acceptance of wind as a significant component of the world’s power generation. Manufacturers, energy companies and researchers are collaborating to solve the critical challenges that remain. Their quest is to supply 20% of all U.S. electricity with wind power within 22 years.
The 20% Wind Scenario
IEarlier this year, the U.S. Department of Energy (DOE) released “20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply,” a comprehensive analysis of wind as a viable resource.
“Wind is the most successful new energy source introduced to America’s utility system in a generation,” says Randall Swisher, executive director of the American Wind Energy Association (AWEA), the national trade association of the U.S. wind energy industry. “We know that achieving the 20% wind energy goal will virtually flatten carbon dioxide emissions from the electric power sector. Wind is part of the overall answer. It will have a dramatic impact on the cost of natural gas. At 20%, wind can reduce the cost of natural gas by at least 11%, saving consumers and business about $150 billion. That may have been a pipe dream a few years ago. But the wind industry is growing and attracting capital. It’s becoming a very real market and a very real industry.”
Along with this success forecast comes the realization that business as usual is over, says Swisher. “Rising energy costs have opened the door wide to new technologies, including wind. We are going to see a fundamental change in direction and technology, with wind being one of the prime beneficiaries.
“We have seen a great deal of innovation already that will work toward overcoming some of wind’s challenges,” Swisher says. “There has been significant improvement in blade design to capture wind more effectively. Electronic monitoring can detect equipment breakdowns and immediately relay information to a control room onsite or hundreds of miles away, so repair crews can be dispatched.”
AWEA expects innovation to continue as a result of the industry’s natural growth and the infusion of capital. “Companies including GE, Siemens and Mitsubishi, for example, are now fully engaged and investing,” Swisher notes. “The wind market grew 45% in 2007, and we expect to grow at least another 45% in 2008. With that kind of opportunity available to manufacturers, it’s not surprising that they are excited about wind power’s future.”
According to the American Wind Energy Association, the U.S. wind power industry
expanded the nation’s total wind power generating capacity an unprecedented 45%
in 2007 alone — enough to power 1.5 million American households annually.
AWEA’s most important role in achieving 20% wind energy for U.S. electricity needs by 2030 is to understand the barriers and develop a detailed plan for overcoming them, says Swisher. “The challenge of getting transmission built is a significant one. Yet it’s not only a challenge for the wind industry, it’s a challenge for the entire electric power industry. For many years, we’ve seen underinvestment in transmission. Without increased investment, the reliability of our entire electric grid is in question. The good news is that we’re now seeing more companies step forward with business plans and substantially more investment than we did even three or four years ago.
“Going forward, it will be necessary to rethink the way we get transmission built,” Swisher says. “What’s required is not just small transmission lines to connect power plants to the electric grid, but also major high-voltage transmission to transmit power to the East and West Coasts from the Plains. There are challenges to getting that done. It will take cooperation across state lines. A good analogy is the way the U.S. Interstate Highway System was developed — large regional transmission lines will take a nationwide, rather than a utility-by-utility, state-by-state effort.”
Major Players Pursue Realistic Solutions
Pursuit of the 20% wind energy goal has a dream team of some of the industry’s most inventive firms working on solutions. In June, six wind turbine manufacturers and the U.S. DOE entered a memorandum of understanding to jointly promote and develop wind as a power source. GE Energy, Siemens Power Generation, Vestas Wind Systems, Clipper Turbine Works, Suzlon Energy and Gamesa Corp. are participants.
For the next two years, the manufacturers will work collaboratively, researching design, reliability and fabrication improvements. They will also seek ways to reduce installation and operating costs; address environmental and technical issues; and develop turbine certification, workforce and grid connection standards. The goals include creating educational curricula for community college training programs and for wind power engineers.
Gamesa: Sustainable Energy Technologies
“The United States has more than 400 times the wind energy potential than it currently is capturing,” says Julius Steiner, CEO of Gamesa USA. “That vast potential of untapped resources, along with government policies mandating renewable energy production and increased consumer demand for cleaner electricity, make for a bright future.”
Gamesa’s entry into the U.S. marketplace in 2001 and the U.S. manufacturing scene in 2006, including its recent participation in the DOE collaboration, are strong indicators of its commitment to wind energy in the U.S. Gamesa is a leading provider of renewable energy solutions, with its primary focus on wind power. Gamesa is involved in the manufacturing of wind turbines and the development of wind farms. Founded in 1976, the company now operates in three key strategic markets — the U.S., Europe and China — and participates in other emerging markets in North Africa and India. The company is included, among others, in the Dow Jones and FTSE4GOOD sustainability indexes.
Gamesa Wind is one of the largest manufacturers of wind turbines in the world. In 2007, Gamesa Wind was second in worldwide sales with revenue of US$4 billion or €3.27 billion. Its worldwide sales grew 36%. In the U.S., every turbine it will manufacture through the year 2010 has already been sold.
“The United States has more than 400 times the wind energy potential than it currently is capturing.”
Julius Steiner, CEO, Gamesa USA
The company designs and manufactures its own blades and nacelles (power plants), maintains a tower unit and assembles the wind turbines itself. Its four U.S. manufacturing plants in Pennsylvania supply wind turbines to the North American market. It also has development offices in Philadelphia, Minneapolis and Austin.
“As a global leader in sustainable energy technologies, we have over 400 people dedicated to research and development,” says Steiner. “Our most significant developments in technology have to do with the size of the machines and their reliability. The capacity of the earlier wind turbine versions is a fraction of what our machines produce. It’s like comparing a Model T to a Ferrari.”
The total height of Gamesa’s industrial wind turbines is 404 feet. Each uses three carbon fiber blades. Technically advanced in terms of weight and efficiency, the blades are 140 feet long. The 80-ton nacelle houses the turbine’s mechanical components, transmission and generator. The steel tower support uses a tubular design, rather than a lattice structure. The design reduces noise and eliminates the bird-nesting problems of the earlier-style tower.
The U.S. is primed in a big way for wind power — economically, politically and geographically — while the wind energy industry is emerging as a significant driver of new jobs for the American economy. With continued increases in generating capacity, the result will be a win-win situation all around.
The world’s energy needs are expected to double by 2030, a challenge that is further heightened by concerns about reducing CO2 emissions and the decreasing reserves and unprecedented costs for fossil fuels. As business, government and science address these dynamic realities, continued economic growth hangs in the balance.
As a renewable and clean source of energy, wind power has emerged as a significant part of the overall solution, accounting for about 30% of the entire new power-generating capacity added in the U.S. in 2007. Its unique infrastructure allows capacity to be added quickly while contributing to the energy security that’s become increasingly important in today’s world. At the same time, development in wind technology, rising fuel prices and federal and state policies help drive further demand for wind power.
With its vast tracts of open space and excellent wind resources, the U.S. is particularly well positioned to take advantage of wind power’s benefits. In fact, it’s already the world’s second-largest wind market, with installed generating capacity of more than 16,800 megawatts (2007), or enough electricity for approximately 4.5 million American households. According to The Wind Coalition, Texas boasts the country’s largest wind-generating capacity, accounting for 26% of the nation’s total installed wind capacity, or the equivalent of the electricity needed to power more than 1 million Texas homes.
As capacity continues to grow in the U.S., further employment opportunities will follow. A recently published report from the U.S. Department of Energy, “20% Wind Energy by 2030,” projects that with wind power covering 20% of electricity needs, it could support roughly 500,000 jobs in the U.S., with an average of more than 150,000 workers directly employed by the wind industry.
“The U.S. wind power industry is a bright spot in our economy,” says AWEA Executive Director Randall Swisher. “Every megawatt of installed wind power creates employment in manufacturing, construction and operations as well as jobs in advertising, office support, environmental assessment and other related professions. America’s vast wind resources have barely been tapped, and we have only just begun to see wind’s potential to generate broad economic growth.”
Industry pioneer Vestas is one of the companies working to make the “20% Wind Energy by 2030” vision a reality, and the company’s own success mirrors the rise of wind power. Growing from a staff of approximately 60 people in 1987, today the company is a global, market-leading group with over 17,000 employees focused on the development, manufacturing, sales, marketing and maintenance of wind power systems. Vestas already has installed over 35,500 wind turbines worldwide, of which over 9,600 are installed on U.S. soil.
Despite the challenges that lie ahead, there are grounds for optimism, pointing to a job-rich and increasingly energy-secure future for the U.S.
“Accomplishing the 20% wind energy goal will not only lower the total cost of electric power, it will provide a whole new industry of very good jobs,” says Steiner. “To reach 20% by 2030 will require the installation of 75,000 wind turbines across the U.S. To put that into perspective, Gamesa USA produced about 500 turbines and employed approximately 1,100 people in 2007.
“The wind industry has the potential for putting the U.S. back into the manufacturing business,” says Steiner. “Consider that each wind turbine has 8,000 parts. A supply chain is needed to build and deliver those parts. Right now, Gamesa has suppliers in 24 states. We are trying to get to the point at which 75% of our suppliers are locally based. The employment potential in wind turbine manufacturing is enormous. There will also be substantial employment opportunities for installers, operators and service personnel, as well as workers to develop the transmission infrastructure.”
BP: Addressing Wind’s Challenges
“In May, the Department of Energy published a landmark report that has the potential to change the way America thinks about wind power,” says Robert Lukefahr, president, BP Global Wind Energy. “The report demonstrates that delivering 20% of U.S. electricity from clean, renewable wind power by 2030 is technically feasible, economically sensible and an environmental imperative.
“That doesn’t mean there aren’t challenges,” Lukefahr adds. “But those challenges can be overcome. Large energy companies like BP are making multibillion dollar investments in wind for a simple reason: Wind can offer the lowest-cost, large-scale renewable energy source available to us today.
“There are three main challenges to the wind industry in the U.S. and also globally,” says Lukefahr. “The first is getting a long-term stable policy framework. At the moment, policy changes year to year. That creates a huge amount of uncertainty, and it is limiting growth and investment.
“The second is to solve the long-distance high-capacity transmission problem,” Lukefahr says. “We need to create a transmission superhighway system that brings resources from where they exist to where they are needed most. That means bringing wind energy from the central regions to the major population centers, primarily on the coasts. That’s true in America, in China, in India and in Europe. Everywhere in the world, high-capacity transmission is a key enabler for bringing wind resources to market.”
“Everywhere in the world, high-capacity transmission
is a key enabler for bringing wind resources to market.”
Robert Lukefahr, President, BP Global Wind Energy
The need to continue technological improvements is the third challenge, Lukefahr notes. “Technology will help reduce the cost of energy and improve turbine efficiency. Companies around the world are coming up with innovations for turbines, blades and power systems and more efficient methods for constructing wind farms.”
A good indication of how the industry has improved over the last few decades is BP’s project to repower a 20-year-old wind farm at Edom Hills near Palm Springs, California. The company has replaced the original 139 wind turbines, which generated 11 megawatts (MW) of electricity, with eight Clipper 2.5 MW wind turbine generators and nearly doubled the power output.
“Looking forward we see very large strategic projects becoming increasingly important in the wind industry,” says Lukefahr. “These long-term projects are complex and will require innovative transmission solutions to bring them to market. An example of what’s already on the horizon is a joint venture announced in July by BP Alternative Energy and Clipper Windpower to develop Titan Wind, a 5,050 MW South Dakota wind energy project. If completed as planned, it will be the world’s largest wind facility. The project will cost $12 billion to $15 billion to build to full scale.”
In the meantime, BP continues to contribute to the energy needs of the U.S. by executing grid-proximate wind projects. These projects have the advantage of being close to the grid and easy to connect.
The challenges of wind are no different from the challenges faced in the building of the Trans-Alaska oil pipeline, says Lukefahr. “The energy business is all about finding resources, developing them safely and efficiently, and bringing them to market.”
Gamesa’s answer to sustainable development is an “EnergyCulture” — a way to help the world meet its energy needs through safe, socially responsible and environmentally sound means. Gamesa’s turbines maximize the wind’s energy potential for the benefit of shareholders (sales grew 36% in 2007) and customers in 20 countries spread out over four continents. With a team of 7,000 employees worldwide, including 1,200 in the United States, Gamesa’s market leadership is seen in the 13,000 megawatts of wind capacity that the company has installed around the globe.
At Gamesa, we’re committed to devel-oping technological solutions to our energy needs, with products that are tested and proven to be among the best and most efficient on the market. Welcome to the “EnergyCulture” Era, with the world’s Energy Cultivator: Gamesa.
In August, the Texas Engineering Experiment Station (TEES) announced its multiyear master research agreement with Vestas Wind Systems A/S, the world’s largest supplier of wind turbines. TEES is the engineering research agency of the State of Texas and a member of the Texas A&M University System.
Texas now leads the nation in wind power, accounting for 26% of the nation’s total installed wind capacity — the equivalent of the electricity needed to power more than 1 million Texas homes.
Today’s wind assemblies (tower, nacelle and blades) are about 400 feet high, taller than the Statue of Liberty.
“With the rapid growth of the wind energy sector, especially in Texas, this research is critical,” says Dr. Theresa A. Maldonado, TEES deputy director and associate dean for research in the Dwight Look College of Engineering at Texas A&M University. “We have the expertise and facilities to explore next-generation materials, large-blade design, wind turbines, civil infrastructure, electrical systems and systems engineering for advanced onshore and offshore wind energy systems.”
U.S. wind capacity is expected to increase 45% in 2008, yet Congress’s failure to extend the production tax credit (PTC) for the renewable energy industry threatens to derail further development, according to the AWEA. As of August, the PTC, set to expire at the end of 2008, had not been extended.
“The tax credit has served as an incentive to people who operate wind farms,” says Gamesa USA CEO Julius Steiner. “It has been instrumental in the rapid expansion of the renewable energy sector. Government policy has been helpful in promoting the industry, something that is often necessary to get things started. As I see it, we are in the middle of the beginning. It’s comparable to the way the federal government supported the auto industry by building interstate highways. The PTC has been helpful. It has expired three times in the past nine years. Each time it expired, there was a drop in installed capacity from the previous year. People who finance the building of wind projects pull back, uncertain about whether the credit will be renewed. So that changes the financial model. Although we think the PTC will be renewed, that’s not crystal clear right now.”
Vestas and TEES researchers will collaborate to develop advanced wind energy technologies, with the first round of projects to launch in fall 2008. Among the issues TEES researchers will address is wind’s reliability as an energy source. “Wind, of course, is not consistent,” says Maldonado. “We’ll be looking at this effect on the aerodynamics of turbine rotor and blade assemblies. The variability of the wind presents another challenge: How does the electric grid handle the fluctuations? So research will look at developing a system capable of adjusting to those changes.”
Other issues the partnership will look to solve are related to engineering and design of wind towers as their size is increased. “Right now, a typical wind tower has three blades connected to a hub [the nacelle],” Maldonado explains. “A single blade is 34 meters. Together with the tower, the structure is taller than the Statue of Liberty.
“There are a lot of design issues just in blade technology,” Maldonado continues. “It must be lightweight, and the shape of the blade is important for optimum wind capture. A lot of technologies have been developed already around the current dimensions of wind towers. To address the economics of wind energy, and the need to capture as much wind as possible, we are looking at larger-dimension wind towers. For example, what happens if the blade length is doubled? That will impact the height of the tower and the turbine power required. The towers have to have structural integrity to support larger blades, and the system has to be able to support a much larger-scale wind assembly while maintaining reliability.”
One of the most exciting things about the future of wind energy is that everyone is working together to make it happen, says Maldonado. “It’s clean energy. If we can address its technological, economic and environmental questions, we can impact energy solutions. Researchers and businesses are eager to solve wind’s challenges. The momentum is incredibly strong right now.”
“Researchers and businesses are eager to solve wind’s challenges.
The momentum is incredibly strong right now.”
Dr. Theresa A. Maldonado, Deputy Director, TEES, and Associate Dean for Research,
Dwight Look College of Engineering, Texas A&M University
T. Boone Pickens, founder and chairman of private investment firm BP Capital Management, has responded to the U.S. Department of Energy’s “20% Wind Energy by 2030” report with the Pickens Plan. This blueprint for the future calls for the construction of new wind-generation facilities and a transmission backbone in the corridor that stretches from the Texas panhandle to North Dakota.
The Pickens Plan projects that the Great Plains region could produce 20% of the electricity for the U.S. at a cost of $1 trillion. It would take another $200 billion to build the capacity to transmit that energy to cities and towns. Together with improved utilization of U.S. natural gas resources, the plan estimates the U.S. could replace more than one-third of its oil imports in ten years.
Produced by Nuala Byrne • Edited by Carol Nelson • Designed by Jon Prinsky