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Walter Short, Nate Blair, Paul Denholm, Donna Heimiller

Modeling the Penetration of Wind Energy Into the U.S. Electric Market Presentation to CNLS 26 th Annual Conference August 16, 2006. Walter Short, Nate Blair, Paul Denholm, Donna Heimiller. Contents. Wind Energy in the U.S. Electric System Brief Description of the WinDS Model Results

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Walter Short, Nate Blair, Paul Denholm, Donna Heimiller

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  1. Modeling the Penetration of Wind Energy Into the U.S. Electric MarketPresentation to CNLS 26th Annual ConferenceAugust 16, 2006 Walter Short, Nate Blair, Paul Denholm, Donna Heimiller

  2. Contents • Wind Energy in the U.S. Electric System • Brief Description of the WinDS Model • Results • Issues

  3. Wind Energy in the U.S. Electric System • 9.1 GW of existing U.S. wind capacity (1%) • 2.4 GW added in 2005 • Incentivized by • 1.9 cents/kWh federal production tax credit • State mandates, e.g. Renewable Portfolio Standards • Clean, renewable • Impeded by • Transmission availability • System integration of a variable resource • Recent rise in wind turbine capital costs ($1600/kW)

  4. Wind Resources >5000 GW of onshore capacity >3000 GW of offshore capacity

  5. The U.S. DOE EIA Uses its National Energy Modeling System to Project Future Wind Energy Potential • 13 large electric regions • No new transmission • No cost or limits on use of transmission within regions • Can’t accurately capture wind correlation between regions • Wind considered a mature technology (1% learning rate on capital costs and capacity factors) • Wind capacity value< 20% • Eliminates 91% of U.S. wind resource base

  6. EIA’s NEMS Could Not Address Questions for the DOE Wind Research Program • Access to and cost of transmission • Light wind close to the load or high speed wind far away? • How much wind can be transmitted on existing lines? • Will wind penetrate the market if it must cover the cost of new transmission lines? • Will offshore wind close to seaboard loads penetrate? • Resource Variability • How does wind capacity credit change with penetration? • How do ancillary service requirements increase with wind market penetration • How much would dispersal of wind sites help? • Is on-site storage cost effective?

  7. WinDS Model(Wind Deployment Systems Model) A multi-regional, multi-time-period model of capacity expansion in the electric sector of the U.S. Designed to estimate market potential of wind energy in the U.S. for the next 20 – 50 years under different technology development and policy scenarios

  8. WinDS Regions

  9. Transmission in WinDS

  10. General Characteristics of WinDS • Linear program cost minimization for each of 26 two-year periods from 2000 to 2050 • Sixteen time slices in each year: 4 daily and 4 seasons • 5 levels of regions – wind supply/demand, power control areas, RTOs, NERC areas, Interconnection areas • Existing and new transmission lines • 5 wind classes (3-7), onshore and offshore shallow and deep • All major power technologies – hydro, gas CT, gas CC, 4 coal technologies, nuclear, gas/oil steam • State-level incentives • Fed by extensive GIS input data bases • Stochastic treatment of wind resource variability – planning reserves, operating reserves, surplus wind

  11. WinDS Logic Flow Wind resources Conventional plant locations Transmission lines GIS EIA – Electric loads, Fuel prices, Plant costs t=now Minimize PV of Costs Subject to: Gens > Loads + lossess Cap > Peak *(1+RM) Regional energy balances LP Optimizer t=t+2 Update LP coefficients ∂ capacity credit/ ∂W ∂ oper reserve/ ∂W ∂ wind surplus/ ∂W Retirements T= 2050? no yes Stop

  12. Base Case Electricity Capacity

  13. Base Case Capacity by Wind Class

  14. Base Case Key Inputs • Wind R&D-driven Cost/Performance improvements • 8% wind learning rate • 1.9 cent/kWh PTC through 2007 • No carbon caps/tax • Gas prices

  15. High Gas Prices Do Not Increase Wind Penetration in the Long Term

  16. $100/ton Carbon Case - Capacity

  17. $100/ton Carbon Case - Generation

  18. $100/ton Carbon – No New NukesCapacity

  19. Production Tax Credit Extension

  20. A PTC Extension to 2020 Could Result in 20% of Generation from Wind by 2020 20% 4.1%

  21. Regional Wind Installations by 2020 with PTC* * PTC to 2010 with ramp down by 2020

  22. Major Modeling Issues in WinDS • Transmission • Load modeling/loop flow • Multiple interchanges • Non-economic factors/siting • Environmental – emissions, views, birds, bats, radars • Competitive technologies • Conventional fuels/technologies • Other renewables • Electric industry dynamics • Restructuring • RTO’s • Model scope – electric loads, fuel prices, • Linear Programming Optimization

  23. New Website (documentation and results) at:http://www.nrel.gov/analysis/winds

  24. Backup slides follow

  25. Annual Electric Generating Capacity AdditionsFossil, Nuclear and Non-Hydro Renewables Natural Gas: 63 GW in 2002 Coal declines CAAA Gas increases PIFUA changed PURPA CC Efficiency Low price through deregulation Gas declines PIFUA prohibits Nuclear emerges Technology available “Too cheap to meter” Nuclear declines 3-Mile Island (1979) Chernobyl (1986)

  26. WinDS Constraints on Wind Transmission PCA 1 PCA 2 Existing transmission line New transmission line New wind transmission line Class x wind Supply/demand regions Class y wind

  27. Disclaimer and Government License This work has been authored by Midwest Research Institute (MRI) under Contract No. DE-AC36-99GO10337 with the U.S. Department of Energy (the “DOE”). The United States Government (the “Government”) retains and the publisher, by accepting the work for publication, acknowledges that the Government retains a non-exclusive, paid-up, irrevocable, worldwide license to publish or reproduce the published form of this work, or allow others to do so, for Government purposes.  Neither MRI, the DOE, the Government, nor any other agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe any privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not constitute or imply its endorsement, recommendation, or favoring by the Government or any agency thereof. The views and opinions of the authors and/or presenters expressed herein do not necessarily state or reflect those of MRI, the DOE, the Government, or any agency thereof.

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