ANES ASSIGNMENT

WIND ENERGY STATUS IN USA

SUBMITTED BY:
GROUP-1
ANURAG VARDHAN (M-09-02)
BIJAY KISHOR (M-09-07)
GOURAV SAINI (M-09-09)
RAHUL JAIN (M-09-25)
AJAY SAHU (M-09-37)
 ANES ASSIGNMENT | RAJIV GANDHI INSTITUTE OF PETROLEUM TECHNOLOGY 2

WIND ENERGY STATUS IN USA

HISTORY OF WIND ENERGY IN US

Earlier wind energy was used mostly in the tobacco farms and sugar plantations and was
a part of America's agriculture from its conception. In the mid 1900's, Charles Brush
created a massive "wind dynamo" as everyday Americans would refer to the huge tower
Brush built. During 1920's Dew Oliver and Samuel Peppard each sailed across Kansas
and Colorado and used only a wind turbine to lift into the sky in the San Gorgonio Pass.
In the 1980's, The Public Utility Regulatory Policies Act was formed and the (PURPA)
allowed all Americans to install wind turbines. After experiencing strong growth during
the 80s, the US wind power industry experienced stagnation and decline during the 90s,
but the industry regained strength from 1999 and on, and is now one of the most
promising industries.

WIND ENERGY POTENTIAL IN USA

On February 11, 2010, the National Renewable Energy Laboratory released the first
comprehensive update of the wind energy potential by state since 1993, showing that
the contiguous United States had potential to install 10,458,945 MW of onshore wind
power. The capacity could generate 37,000,000 gigawatt-hours (GWh) annually, an
amount nine times larger than current total U.S. electricity consumption. In addition to
the large onshore wind resources, the U.S. has large offshore wind power potential,
with another NREL report released in September 2010 showing that the U.S. has 4,150
GW of potential offshore wind power nameplate capacity, an amount 4 times greater
than the country's 2008 installed capacity from all sources of 1,010 GW. As of 2010,
most wind power development in the U.S. has been onshore, due to the higher costs
and risks of offshore wind power, along with delays due to opposition to projects such
as Cape Wind.

INSTALLED CAPACITY
Over the last few years, wind power in the U.S. has been increasing exponentially. Office
of Energy Efficiency and Renewable Energy had conducted a survey to find out the wind
energy capacity growth in megawatts of the entire United States since 1999. Installed
capacity increased by 50% in the U.S. in 2008, compared to a 28.8% world average
growth rate. The following table shows installed capacity for wind energy in USA.
Year 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
Installed
Capacity 34,863 25,410 16,907 11,575 9,147 6,723 6,350 4,687 4,232 2,539 2,472
(MW)
Table 1: Installed Capacity in USA from 1999-2009
 ANES ASSIGNMENT | RAJIV GANDHI INSTITUTE OF PETROLEUM TECHNOLOGY 3

MARKET SIZE AND GROWTH

The United States is the largest market for wind power in the world. The US wind energy
industry invested approximately US $9 billion in new generating capacity in 2007, and
has experienced an annual growth rate of 30% in the last five years jumping to a 45%
growth rate in 2007-8, making it one of the fastest growing wind markets worldwide.
Wind energy facilities currently installed in the US produce an estimated 16,818 MW
annually, or enough electricity to serve 4.5 million homes. A considerable number of
wind turbine manufacturing plants opened in the US in 2007 to support the wind power
industry. In 2008 alone more than 50 wind energy facilities opened, expanded or were
announced in the US. The below table shows some of the largest wind firms in USA.
Installed
Farm capacity (MW) State Developer/Owner
Horse Hollow Wind
Energy Center 736 Texas NextEra Energy Resources
Capricorn Ridge Wind
Farm 662 Texas NextEra Energy Resources
Fowler Ridge Wind
Farm 600 Indiana Dominion/BP Wind Energy

Roscoe Wind Farm 781 Texas E.ON Climate and Renewables

Table2: Wind farms in the United States

With more than US $65 billion forecasted to be invested in additional wind capacity
between 2007 and 2015, the potential of the US wind power market is significant. With
today’s technologies, there is enough wind power to supply all of the country’s
electricity needs. Yet, only 5% of the nation’s energy supply is generated from wind
power, and only 0.8% of the nation’s electricity consumption comes from wind.

MARKET STRUCTURE
Demand for wind power in the US has exploded due to rising prices of traditional energy
sources. The industry has taken advantage of federal tax credits over the years and has
been boosted by domestic as well as foreign investments. Consolidation of wind power
companies, exemplified by Suzlon’s take-over of RePower Systems AG, Clipper’s merger
with Hemeretik, has changed the composition of the US wind power market, solidifying
around a group of 10 to 15 large-scale players. Mergers and acquisitions as well as
strategic alliances are a common trend, and the market is generally characterized as
supply-driven. Domestic US wind power companies find themselves competing for
acquisition opportunities with the new aggressive foreign entrants. As annual US wind
development becomes increasingly dominated by companies with the right combination
 ANES ASSIGNMENT | RAJIV GANDHI INSTITUTE OF PETROLEUM TECHNOLOGY 4

of green-field experience, financial support, and supply connection, the race is on

between major US and foreign wind power players for US market share.

WIND TURBINE MANUFACTURING INDUSTRY IN USA

In the past, the U.S. wind industry relied largely on imported components; however,
there has been a shift towards domestic manufacturing that is likely to continue. Since
2005 many turbine manufacturing leaders have opened U.S. facilities; of the top 10
global manufacturers in 2007, seven — Vestas, GE Energy, Gamesa, Suzlon, Siemens,
Acciona, and Nordex — have an American manufacturing presence. In addition, Clipper
Windpower, which is based in the U.S., has joined GE as a major domestic player in the
production of utility-scale wind turbines, with the two companies together accounting
for 50% of the 2008 domestic turbine market. REpower is another manufacturer with
notable usage in the United States. As of April 2009, over 100 companies are producing
components for wind turbines, employing thousands of workers in the manufacture of
parts as varied as towers, composite blades, bearings and gears. Many existing
companies in traditional manufacturing states have retooled to enter the wind industry.
Their manufacturing facilities are spread across 40 states, employing workers from the
Southeast to the Steel Belt, to the Great Plains and on to the Pacific Northwest. Plans for
30 new manufacturing facilities were announced in 2008, and the wind industry expects
to see a continued shift towards domestic manufacturing in the coming years. In total,
70 manufacturing facilities have begun production, been expanded, or announced since
January 2007.

REGULATIONS
New technologies have decreased the cost of producing electricity from wind, and
growth in wind power has been encouraged by tax breaks for renewable energy and
green pricing programs. Federal, state and local policies play a very important role in
encouraging wind energy development in the US.
Federal Incentives : A number of federal policies support the wind industry: wind
power property allows for tax depreciation, Clean Renewable Energy Bond (CREB)
program offers interest-free debt to new wind projects, section 9006 of 2002 Farm Bill
encourage agricultural producers to use renewable and energy efficient systems, such
as wind, in their production.
Wind Powering America (WPA) is the main federal program for wind and is run by the
Office for Energy Efficiency and Renewable energy, a subdivision under DOE. The goal is
to improve the performance and operability of wind energy technologies and lower the
costs, to investigate emerging power technologies, and to enhance the environmental
performance and efficiencies of conventional technologies
 ANES ASSIGNMENT | RAJIV GANDHI INSTITUTE OF PETROLEUM TECHNOLOGY 5

The most well-known and widespread federal policies for wind power are the
Production and Investment Tax Credit (PTC and ITC) which are crucial to driving US
wind growth forward. The PTC is an income tax credit of 2.1 cents/kilowatt-hour and is
allowed for the production of electricity from utility-scale wind turbines. The ITC
supports consumers in purchasing small wind turbines for home, farm or business use.
Owners of small wind systems with 100 kW of capacity or less can receive a credit for
30% of the total installed cost of the system, not to exceed $4,000.
State Incentives: At state level, one of the major encouragements for wind power is The
Renewable Portfolio Standard (RPS) – a commitment to generate a certain percent of
electricity from renewable resources. Currently there are 24 states plus the District of
Columbia that have RPS policies in place.

FUTURE PROSPECTS
With the wind power market evolving at such a rapid pace, keeping up with trends in
the marketplace has become increasingly difficult, especially for US manufacturers. One
of the greatest challenges the past three to four years has been wind turbine shortages.
The present long lead-time of turbine orders has sparked significant investments in US
production capacity since 2007. The Obama Administration has set the goal that 10% of
all electricity comes from renewable sources, such as wind, by 2012, and 25% by 2025,
and that ‘the cheapest, cleanest, fastest energy efficient source will be deployed’ –
wind being one of them.
Even though the US wind energy industry has grown dramatically and the price of wind
energy has decreased vastly since the 1980s, the industry is facing some serious
challenges today such as shortages in supply of turbines and components, weakening of
the US currency and the increasing cost of materials. Thus, manufacturers would require
some time to adjust capacity to the increasing demand and be able to support the rapid
growth.
Land areas that have the potential of being used for generating wind energy might be
more valuable for other industries, such as farming. This means that the potential
estimated by the DOE is not necessarily a realistic potential, and wind energy generators
find themselves competing with other industries for land. On top of that, other
attractive renewable sources of energy such as biomass or hydropower can pose a
threat to the further development of the wind industry.
New technologies have made energy from wind cheaper and thus a promising
alternative to oil and natural gas. The promise of wind energy is immense, but reaping
full benefits from this technology rests heavily on research, development, and support
programs to substitute existing energy sources with wind power.
 ANES ASSIGNMENT | RAJIV GANDHI INSTITUTE OF PETROLEUM TECHNOLOGY 6

REFERENCES:

[1] http://www.awea.org/policy/
[2] http://www.energy.gov/energysources/wind.htm
[3] http://en.wikipedia.org/wiki/Wind_power_in_the_United_States
[4] http://www.energymatters.com.au/index.php?main_page=news_article