Low-Cost, Clean Power Of Wind – Right Solution, Right Now

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By Chris Brown

In the wind energy business, it’s our job to know which way the wind is blowing. With decades of experience and a global data stream from wind turbines worldwide, we can forecast when, where and how fast the wind will blow. This allows us to predict precisely how much clean electricity – and revenue – wind can generate anywhere in the U.S. and most of the world for the next 20 years.

Being able to eliminate unpredictable spikes in energy costs is a remarkable achievement.

This certainty provides customers with a valuable marketplace commodity. Most people think of wind as variable. But today, with a combination of low-cost and long-term certainty unmatched by any other energy source — clean or fossil fuel — wind power is driving a revolution in U.S. and world energy markets. Wind energy now even competes economically with natural gas. Although gas prices are reasonable today, they don’t have the long-term predictability of wind energy.

Not surprisingly, the market is responding. Wind power just posted one of its strongest third quarters ever. A recent U.S. energy sector report found that new wind turbine installations rose 280 percent for the quarter, with three gigawatts (GW) of new wind power coming online this year. In addition, wind has been the top new U.S. energy source in 2015, supplying 41 percent of all new U.S. power generating capacity, exceeding natural gas and solar. Over the past five years, about 28 percent of new U.S. capacity came from wind.

What’s driving this demand?

There are several factors, including the environment, climate change, energy security, technology advances and energy policy. But the most important factor is price.

The real cost of wind energy has dropped 58 percent over the past five years. Wind is not only the cheapest new source of renewable energy, but in many places, it is the most affordable energy, period. This means that affordable, clean wind power is no longer a distant dream. Rather, it’s a reality customers are demanding, and we are supplying.

If it costs less, who wouldn’t choose wind?

Because the smart money is investing in wind energy, major companies such as Amazon, Apple, Google, IKEA, Microsoft and Walmart are now jumping on board. No longer is wind power viewed as merely an “alternative energy.” Now, it is a key contributor to America’s electricity grid.

That’s a big deal.

For the first time, wide adoption of wind and solar is effectively reducing fossil fuels’ capacity factor, raising their relative cost and setting in motion a “virtuous cycle” reinforcing the trend. This past year, wind improved its capacity factor by 14 percent, while natural gas dropped 12 percent.

Although the future of wind energy looks strong — the Department of Energy (DOE) reports wind energy could be the cheapest, cleanest form of electricity in all 50 states by 2050 — this future is not guaranteed.

Keeping pace with accelerating global demand for wind energy presents formidable challenges. For now, the U.S. remains the world’s leading generator of electricity from wind, with 70 GW a year. But China has passed the U.S. in total installed wind energy capacity.

Breaking the numbers down, wind energy currently supports 70,000 U.S. jobs. Vestas has approximately 4,000 workers in the U.S. producing wind turbines for this market. Total U.S. jobs for the sector are projected to reach 375,000 by 2030. And the wind powering them all is homegrown and home-blown.

The industry’s goal is 20 percent of U.S. electricity by 2030. That means generating 224 GW from wind, and 140 GW in new build capacity, in the next 15 years. As wind business leaders, we must take responsibility for reaching and exceeding these goals. I believe we can do it. But we must continue making wind the customers’ most cost-efficient energy choice.

Wind power can out-compete older entrenched energies, but it needs a level playing field to reach its full potential across the U.S.  Currently, the Production Tax Credit helps ensure stable growth and provide investment certainty for an industry that’s backed by more than 70 percent of Americans, has cut clean energy costs dramatically, and creates new jobs while driving U.S. energy independence. Why wouldn’t we keep that winning strategy?

We also encourage state policymakers to look to wind energy as a low-cost, ready solution to meet their goals with the Environmental Protection Agency’s Clean Power Plan. The eight states with the highest emissions reduction targets have some of the best wind resources in the country.

Chris Brown PicIn December, the world turns its attention to the COP 21 summit in Paris, which focuses intently on climate and energy security. As a low-cost, clean energy choice that’s in demand and available today, wind should hold center stage at the summit. Right now, wind power is a viable climate solution for the U.S. and the world. It is also an engine for jobs and economic growth. Wind energy shows the power of the marketplace, backed by sensible policy, to do good while also doing well.

[Chris Brown is president of Vestas-American Wind Technology, Vestas’ North American business unit.]

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25 thoughts on “Low-Cost, Clean Power Of Wind – Right Solution, Right Now

  • To ensure the success of RE energy only two actions are needed:
    Remove all subsidies from ALL energy systems, FF, nuclear and RE and introduce a carbon tax up to $ 100 per ton.
    End of story! :))

    • In Canada alone that would save the governments, federally and provincially, about $ 3 billion per year and bring in at $ 30 per ton, $ 10 billion per year, at $ 100 per ton maybe $ 30 billion per year AND put a big dent in the deficit!

      • The Canadian government only spends something like 200 billion a year. 30 billion in new revenue would represent an amount of about 50% of the revenue from GST…

        It would also put us well into surplus range, since we’re planning on running 15 billion dollar-ish surpluses for the next few years.

        • Is that total spent by the Canadian government that low, 200 billion per year?
          Only thing with a carbon tax, as people move away from FF and use RE instead, the income from that tax will be lower as well.

          • Thank you for the link/info.
            Interestingly almost 50 % is from personal income taxes.
            If you would distract subsidies to corporations from the amount of taxes paid, do they overall actually pay ANY taxes?Now what would happen if the average tax payer knows that they are given ‘gifts’ to profitable corporations?

            Would they be jumping with joy??
            I am sure most counties are similar?? 🙁

          • Many of the subsidies paid, if not most of them, are in the form of lucrative tax breaks. It’s not like the government goes around writing massive cheques as a matter of course.

            Most people are surprised to learn that personal income taxes make up the bulk of government revenues. But massive corporations have massive payrolls, and those payrolls are taxed at nearly double the rate of corporate income. Also, business will intentionally invest most of their earnings back into the business, creating investments to further grow the business. This results in their reported incomes being miniscule. This is also desired behavior. We want business to grow their businesses,and hire more people!

          • Yes corporations reinvest profits to increase revenue and grow their business, but I still find it wrong when corporations make record profits and get handouts from you and me or pay zero tax because of tax breaks!

          • The problem is also:
            The lower the corporate tax-bracket the lower is also their incentive to reinvest at all, which in return is harming the economy.
            (Example: If the tax-bracket was high, they would have an incentive to invest in efficiency measures.)

          • Yes but on the other hand when personal taxes get lower (yes that happened in the past) the forecast was lower revenue, but the opposite happened. People had more money to spend and they did.

          • Yes most people do spend more if they can, but corporations only spend more if the demand justifies it (and demand only goes up if people spend more and people spend more if they don’t have to pay for the corporate-tax-cuts).

    • Yes, a carbon fee/dividend system. But it should start at $100/ton and then move up $25/quarter until it gets to about $400/ton. And double change on any exported carbon fuels. Would it speed coal turn off, yes! Might it keep some nuclear plants open longer, maybe. Decrease FF hunting, yes.

      • I think you’re starting point it too high and the ramp, too fast. You want to encourage a shift to renewables, not destabilize the economy. A clear cut, consistent ramp of future values will guide investments without causing huge ripples.

        • Yes in BC, Canada the tax started at $ 10 per ton of carbon, on all energy, and ramped up to $ 30 per, over 3 years, and did lower emission and was good for the economy.
          But they stopped after 3 years, it is still only $ 30 per ton, 7 years later.

    • In the spirit of piling on, I would add an extra charge for SO2, NOx, particulates, and mercury. I don’t care if it raises rates for coal fired electricity, cause I am contracted for wind power, and looking at adding solar. Nobody is going to pay all those charges long term anyway. They’ll just replace coal and be done with it.

  • “For now, the U.S. remains the world’s leading generator of electricity from wind, with 70 GW a year. But China has passed the U.S. in total installed wind energy capacity.”

    GW is not the measure for electricity, it is the measure for power. GWh would be the right unit for electricity, but 70 GW is the installed capacity number. Shouldn’t someone from Vestas be able to get it right? I surely would like to know, how much electricity actually is produced from wind in the US per year, but it is certainly not 70 GWh and it can’t be 70 GW x year because its capacity factor obviously is not 100%.

    • Capacity factors run higher in the US, with newly installed turbines generally above 40%. Chinese CF numbers are lower which accounts for China having more installed capacity but generating less electricity from wind overall.

      • It’s still wrong to report that as 70 GW a year. I seriously wish we could get writers to report the correct units…

        • There is no perfect way to reflect the generating capacity, because this power installed will generate more or less, the capacity factor changes with other factors.

          • 70 GW per year is still wrong, no matter how you cut it.

            Either report energy generated, or installed capacity + capacity factor, either is immediately comparable and has the side benefit of not being flat out wrong.

  • Puff piece. At a site like this with reasonably well-informed readers, we would have liked some discussion of rising capacity factors, transmission constraints (as in China and the USA), and integration costs compared to solar.

    • Here, here

  • Vestas should take a hint from GE on the future of wind
    turbines. GE recently acquired Blade Dynamics, Converteam and the Space Frame
    Tower so it can produce onshore turbines with multi-segmented blades of 80-100m,
    high temperature superconducting nacelles of 6-8 MW to be placed on top of
    their Space Frame Tower of 139-160m. These new technologies will double the
    size of turbines that can be easily transported under bridges, (<4m height);
    around clover leafs, (<50 m length); and on unimproved roads, (<150
    tons). The new turbines will have reduced installation costs per MW and
    capacity factors exceeding 50 percent with incorporated battery storage to
    garner firm power contracts at prices competitive with gas turbines.

    • Vestas has in direct neighbourhood a competitor who has done most of this for years. Check the E-126 or E-115. :-))

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