0 Rocky Mountain Institute 0 A New Dawn: Breakthrough Growth Strategies for Wind Kyle Datta, Senior...

1

Rocky Mountain InstituteRocky Mountain Institute1

A New Dawn: A New Dawn: Breakthrough Growth Strategies for WindBreakthrough Growth Strategies for Wind

Kyle Datta, Senior DirectorKyle Datta, Senior DirectorRocky Mountain Institute Rocky Mountain Institute

2


The climate problem is due to baseload coal in Asia and the The climate problem is due to baseload coal in Asia and the U.S., and transportation fuelsU.S., and transportation fuels

CO2 Forecasts

0

10

20

30

40

50

60

2002 2009 2014 2019 2024 2029 2034 2039 2044 2049 2054

Years

10^9

Ton

s P

er Y

ear

Reference Case

Efficiency Case

Efficiency Renewables or Coal Mitigation

+ Biofuels

No Increase in AtmosphericConcentration

2002 Emissions

De-carbonized power, either from renewables or De-carbonized power, either from renewables or sequestration, needs to account for 40% of new capacity by sequestration, needs to account for 40% of new capacity by 2030 in order to stabilize the climate2030 in order to stabilize the climate

Source: GEC/ Wingaersheek Research Group 2004

3


Critical IssuesCritical Issues

Does wind’s intermittent output fundamentally limit its role in the electricity market?

Can wind economically compete with baseload technologies?

How can the remoteness of wind sites from load be overcome?

Despite rapid projected growth, we will fall far short of this Despite rapid projected growth, we will fall far short of this target on current coursetarget on current course

12.0%

3.0%

2.0%

0.5%

0

200

400

600

800

1,000

1,200

1,400

2004 2013 BTM IEA EWEA

GW

Gap Between Projections

2020

4


Overcoming the power system’s technical and regulatory Overcoming the power system’s technical and regulatory barriers will accelerate adoption of windbarriers will accelerate adoption of wind

BarriersBarriersBarriersBarriers Mitigation StrategiesMitigation StrategiesMitigation StrategiesMitigation Strategies

TechnicalTechnical

System integration System integration Advanced forecasting Power electronic advances Storage (batteries, etc.)

Advanced forecasting Power electronic advances Storage (batteries, etc.)

Ramping and energy balance Ramping and energy balance

Conventional ramping/regulation capacity Hydro-backed wind systems Integration with distributed/demand response

resources

Conventional ramping/regulation capacity Hydro-backed wind systems Integration with distributed/demand response

resources

Temporal mismatch between output and load Temporal mismatch between output and load Storage (CAES, PSH) Increase minimum loads

Storage (CAES, PSH) Increase minimum loads

RegulatoryRegulatory

Valuation and planning integration Valuation and planning integration ELCC for reliability value Risk adjustments Portfolio, not project evaluation

ELCC for reliability value Risk adjustments Portfolio, not project evaluation

Utility incentives Utility incentives Portfolio standards (quotas) RECs Incentives

Portfolio standards (quotas) RECs Incentives

5


Breakthrough strategies for increasing wind penetration are Breakthrough strategies for increasing wind penetration are derived by maximizing value across the entire energy derived by maximizing value across the entire energy system—both power system—both power andand transportation transportation

Breakthrough StrategiesBreakthrough StrategiesBreakthrough StrategiesBreakthrough Strategies

Trading integration to hedge fossil fuel risk

Creating firmed portfolios of renewables and distributed resources to substitute for baseload power

Providing merchant transmission and pipelines

Integrating wind with advanced vehicles to displace oil

– Plug-in hybrids

– Ultralight fuel cell vehicles

Trading integration to hedge fossil fuel risk

Creating firmed portfolios of renewables and distributed resources to substitute for baseload power

Providing merchant transmission and pipelines

Integrating wind with advanced vehicles to displace oil

– Plug-in hybrids

– Ultralight fuel cell vehicles

6


$0

$10

$20

$30

$40

$50

$60

Wind Plantw/PTC & 23%

Credit

Demand-ResponseCapacity

IntegrationServices

Total FirmedWind

GasCombinedCycle Fixed

Costs

GasCombined

Cycle VariableO&M Costs

Net Fuel CostsDisplaced

A firmed portfolio of wind, demand response, and hydro-backed A firmed portfolio of wind, demand response, and hydro-backed integration is equivalent to a 13 year gas contract at $4/MMbtu —integration is equivalent to a 13 year gas contract at $4/MMbtu —far cheaper than current U.S. gas futures of $6-7/MMbtufar cheaper than current U.S. gas futures of $6-7/MMbtu

$38.9

RMI Cost Comparison(Firmed Asset Approach to Equivalent Capacity)

$/M

WH

$6.6$6.0 $51.5 -$18.5

$-4.0$29.0

5 Yr Futures:$6.50 MMBtu

$4.00 MMBtu

$3.50 MMBtu

$9.00 MMBtu

Equivalent Gas Price

7


Firmed wind can be competitive with other de-carbonized Firmed wind can be competitive with other de-carbonized options at modest $15/ton COoptions at modest $15/ton CO22 charges charges

Baseload Power

72.0

48.6

16.8

78.6

48.841.4

1.3

0

10

20

30

40

50

60

70

80

90

Wind CAES Wind PSH IGCC & SEQ Coal PC Nuclear

Levelized Cost GHG

73.3

65.4

EOR55-60

Actual46

8


Two-thirds of the decentralized new capacity is combined-heat-and-power in industry and buildings, ~60–70% of it gas-fired

The rest is renewable (hydro is included only up to 10 MWe)

In 2004, these low- or no-carbon options added 5.9 as much capacity and 2.9 as much output as nuclear power did

Market reality: renewable and distributed resources Market reality: renewable and distributed resources have eclipsed nuclear powerhave eclipsed nuclear power

9


Clean Plan = 2,800 MW TR20% RE, 9% DG, 8% Gas

48% Coal, 8% Nuclear, 5% Hydro

BAU = 10,000 MW TR2% RE, 24% Gas

62% Coal, 7% Nuclear, 5% hydro

Combining these resources can fundamentally change the Combining these resources can fundamentally change the game: ~8 GW more wind with game: ~8 GW more wind with lessless transmission transmission

Source: Ronald Lehr, Western Research Associates, 2005

Western Interior States Clean Energy Plan

10


Merchant transmission can eliminate the bottleneck: Merchant transmission can eliminate the bottleneck: new business model is wind turbines + transmissionnew business model is wind turbines + transmission

Merchant TransmissionMerchant Transmission

U.S. FERC allows private transmission lines to be built—can bypass constraints

Merchant play requires rights of way—easier for large resource companies

West Texas, west California, Wyoming are all natural plays

11


Integration with plug-in hybrids could solve night time Integration with plug-in hybrids could solve night time load and storage problemsload and storage problems

Image source: EPRI Journal, Gil Masters

Implications to WindImplications to Wind Increased off peak load

can absorb wider range of wind output

Off peak demand > minimum nighttime load of fossil plants

PHEVs are mobile storage

V2G plays possible

12


En

erg

y C

ost

s (c

ents

U.S

./m

ile)

Assumptions: $3.00 U.S./gal petrol, $3 U.S./kg H2, 6¢/kWh (off-peak) electricity: Gil Masters (Stanford)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Ford Focus Toyota Prius Prius+ HEV

(6¢/kWh)

Tesla EV

(6¢/kWh)

Honda FCX

Gas Reformer

FCX

Electrolysis

(6¢/kWh)

12.5

6.1

3.0

0.7

3.7

1.5

5.34.4

Gasoline Electricity

Energy Cost by Vehicle Type

Operating cost economics are attractiveOperating cost economics are attractive

13


Improvements in battery and materials technology Improvements in battery and materials technology will make economics compellingwill make economics compelling

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0 100 200 300 400 500 600 700

Battery Cost ($/kWh)

Simple Payback for PHEVs: 9 KwH Battery

Ele

ctr

icit

y C

os

t ($

/kW

h)

6-Year Payback

8-Year Payback

10-Year Payback

Future

Current

Lightweight Materials Li-Oh Battery Improvements

Lightweight Materials Li-Oh Battery Improvements

14


Car

bo

n E

mis

sio

ns

(gC

O2/

mile

)

Assumptions: 15,000 miles/year, 55% city/ 45% highway, capacity does not include oil or gas-fired generation at night

0

100

200

300

400

500

600

Ford

Focus

Toyota

Prius

Prius+

HEV(2004)

Prius+

HEV(2020)

Tesla EV

(2004)

Tesla EV

(2020)

Honda FCX

GasReformer

FCX

Electro-lysis

(2004)

FCX

Electro-lysis

(2020)

467

229

272

168

119

493

348

186164

Carbon Emissions by Vehicle Type and Resource MixCurrent Off Peak vs 20% RE by 2020

Renewables will improve carbon emissions profileRenewables will improve carbon emissions profile

Gasoline Electricity

15


YearYearYearYear

PHEVs create an opportunity for installing PHEVs create an opportunity for installing additional wind capacityadditional wind capacity

Total Off-Peak Total Off-Peak Power Load From Power Load From 50% PHEVs (Twh)50% PHEVs (Twh)

Total Off-Peak Total Off-Peak Power Load From Power Load From 50% PHEVs (Twh)50% PHEVs (Twh)

New Off-Peak New Off-Peak Power Required Power Required

(Twh)(Twh)

New Off-Peak New Off-Peak Power Required Power Required

(Twh)(Twh)

If Supplied by 100% If Supplied by 100% Wind Capacity Wind Capacity

(GW)(GW)

If Supplied by 100% If Supplied by 100% Wind Capacity Wind Capacity

(GW)(GW)

If total Off-Peak Need is If total Off-Peak Need is 20% Wind Powered 20% Wind Powered

(GW)(GW)

If total Off-Peak Need is If total Off-Peak Need is 20% Wind Powered 20% Wind Powered

(GW)(GW)

20202020 3535 00 00 55

20252025 132132 55 33 1717

20302030 283283 265265 173173 3737

20352035 438438 438438 286286 5757

20402040 551551 551551 359359 7272

16


We can Cling to Old Technology

Our energy future is choice, not fateOur energy future is choice, not fate

Or Employ New Strategies to Embrace a New Dawn

We can Cling to Old Technology

0 Rocky Mountain Institute 0 A New Dawn: Breakthrough Growth Strategies for Wind Kyle Datta, Senior...

Documents

Transcript of 0 Rocky Mountain Institute 0 A New Dawn: Breakthrough Growth Strategies for Wind Kyle Datta, Senior...