1、The Future of WindNARUC Staff Subcommittee on Accounting and FinanceOctober 13,2008Dr.Lola Infante Manager,Generation Fuels and Market AnalysisThe Future of WindCurrent trendsObserved DriversFuture(s)Future 1:“Improved”BAU =100 GWFuture 2:Aggressive policy=200 GWFuture 3:Revolutionary change=300+GWU
2、ncertaintiesThe Future of Wind Current TrendsExceeding expectationsRenewable Energy Net Generation-2007*Includes wind,solar,biomass and other non-hydropower renewable energy sources.*Includes generation by batteries,chemicals,pitch,and purchased steam.Source:U.S.Department of Energy,Energy Informati
3、on Administration,2007 dataGrowth of renewable generationSource:U.S.Department of Energy,Energy Information AdministrationGrowth of wind generationSource:U.S.Department of Energy,Energy Information Administration2008 data:Jan-June+1.1%/yr+31%/yrAnnual growthGrowth of Wind-CapacitySource:Ventyx,Inc.T
4、he Velocity Suite2008 data:As of September.All other years:as of DecemberGrowth of Wind-CapacitySource:Ventyx Inc.,The Velocity Suite2008 data:As of September.All other years:as of DecemberAnnual Capacity AdditionsAnnual growthWind capacity in the statesSource:Ventyx Inc.,The Velocity SuiteWind in t
5、he statesSource:Ventyx Inc.,The Velocity Suite;U.S.Department of Energy,Energy Information AdministrationMain Actors Market StructureSource:Ventyx Inc.,The Velocity Suite;U.S.Department of Energy,Energy Information AdministrationThe Future of WindObserved DriversPolicy State RPSPTCEconomic environme
6、nt(increased cost-competitiveness)Changing climateWind Power ResourcesSource:NREL,Wind Energy Resource Atlas of the United States 28 States&The District of Columbia Renewable Energy Standards in the states(28+DC)create a“regulatory”demand for renewablesPTCThe PTC and other financial incentives facil
7、itate the financing of new capacity and lower its costBut Drivers Economic FundamentalsIncreased construction costsHigh and volatile fuel costsDifferent sources,2008Levelized cost:The present value of the total cost of building and operating a generating plant over its economic life,converted to equ
8、al annual payments.LRMC:Price of power at which a developer can recover the cost,not only of operating a new power plant,but also the capital invested in it.Drivers Changing environmentPolicy anticipation/uncertaintyUS market attractivenessThe Future of WindFuture(s)Future 1:“Improved”BAU =100 GWFut
9、ure 2:Aggressive policy=200 GWFederal RPSExpansion of existing RPSFuture 3:Revolutionary change=300+GWPickensGoogleFuture 1 BAU“100 GW Scenario”Which BAU scenario?Exceeding RPS ComplianceFuture 1 BAU “100 GW Scenario”Source:Ventyx Inc.,The Velocity Suite;U.S.Department of Energy,Energy Information A
10、dministrationCurrent level includes projects under constructionFuture 1-BAUSource:Ventyx Inc.,The Velocity Suite;Data as of October 2008Expected online schedule of existing wind projectsState RPS total renewable requirements by 2020=100-120 GWFuture 1:Challenges$160 billion by 2020TransmissionFuture
11、 1:Drivers and challengesSource:Ventyx Inc.,The Velocity Suite,data as of July 2008Includes all renewables.Operating includes projects under constructionTransmission Access for Renewable EnergySource:Global Energy Decisions,Inc.,The Velocity SuiteFuture 2 Aggressive Policy “200 GW Scenario”+20%Feder
12、al RPSExpansion of existing RPSClimate policy-driven renewable expansionFuture 2 Aggressive Policy “200 GW Scenario”200 GW Scenario18%by 2025*Based on AEO 2008 total capacity forecast(All Renewables)Future 2 Challenges TransmissionIntegrationManufacturingREC marketsFuture 3 Energy revolution “300+GW
13、 Scenario”Pickens Plan:22+%wind penetration by 2020Google Plan:380 GW of wind by 2030Future 3 Energy revolution “300+GW Scenario”300+GW Scenario28%by 2025*Based on AEO 2008 total capacity forecast(All Renewables)Future 3 Energy revolution “300+GW Scenario”300+GW Scenario3 GW15 GW22 GWNo experience t
14、o learn fromFuture 3 Challenges and ContingenciesTransmissionIntegrationManufacturingREC marketsTechnology(again)Cost(again)Economic fundamentals(again)Necessary but not sufficient anymoreThe Future of WindRemaining UncertaintiesFinance:access to and cost of capitalPolitical and social will:how much
15、 is enough?Climate:are renewables the interim answer?Technological change:the LT future will depend on the evolution of wind (and other)technologies and cost Economic fundamentals:the evolution of other technologies,cost of fuels will remain a critical driver/barrier to wind developmentThank you!Contact information:Lola Infantelinfanteeei.org(202)508-5133
