In the run-up to Climate Week in New York City, the US Department of Energy has issued three wind power reports that recapped last year’s flurry of activity in the US wind industry. Wedged in among all the good news is a particularly interesting detail: utilities still account for the largest share of distributed wind energy, but commercial and industrial property owners are catching up. If all goes according to plan, these large wind power users could become a major force in accelerating the renewable energy transition.
Wait, What Is Distributed Wind Energy?
Before we get into the business angle on distributed wind energy, let’s clarify that the class of distributed wind turbines includes utility-scale wind turbines, typically ranging up to the 20-megawatt size, in addition to the small and micro sizes.
One defining element in distributed wind energy is direct-to-load, which is fancyspeak for installing a wind turbine that provides electricity to the property where it is located. That can include anything from your backyard micro wind turbine to a utility scale array that powers an entire industrial campus.
The Energy Department also puts wind turbines in the distributed category when they provide electricity directly to distribution networks or microgrids, or when they are used in support of nearby grid operations.
That distribution and grid usage covers a lot of ground, which explains why last year’s Distributed Wind report noted that utilities accounted for the lion’s share of distributed wind energy in the US, at 47%.
Still, commercial and industrial users weighed in at a respectable 29%. The question is, why?
Why Distributed Wind Energy?
Why, indeed. Leading corporations have been leading the renewable energy charge in the US, one main reason being the prospect of locking in rates over the long term. Stability and predictability are valuable assets when it comes to long term planning.
Green branding is also a major attraction, especially now that wind and solar are competitive with fossil fuels in some markets.
Much of the corporate activity, however, involves power purchase agreements and other arrangements that enable companies to claim the electricity from wind or solar farms at remote sites. That’s not the same as distributed wind energy.
So, what’s the advantage? Distributed wind can come into play where grid connections are unavailable or prohibitively expensive. Wind turbines can also be a source of income for property owners with a grid connection.
It’s All About Control
Distributed wind also appeals to facility managers who jump at the opportunity to shed at least one chore — namely, dealing with a utility company — and exercise more control over their energy systems.
The green branding issue also factors in when a company claims 100% renewable energy but depends on a utility that is still invested in fossil fuels. Green-branded companies need to exercise more control over their energy profile all along the energy supply chain.
For some insights on the control angle, earlier this month CleanTechnica spoke with Jereme Kent, CEO and general manager of the leading US distributed wind company One Energy.
Mr. Kent pointed out that not too long ago, there were no grids and no utility companies serving the bulk of the US. Of necessity, commercial and industrial users exercised complete control by generating their own electricity on site. Now things have come full circle.
One Energy’s business model reflects the growing interest in large-scale distributed wind energy. The company initially focused on wind turbines at the small end of the scale, but its current focus is on utility scale “wind-for-industry” applications.
“We sell control,” Kent explained. “We offer a flat rate for 20 years. Larger users want certainty. They don’t want to be in the energy business, and direct-to-load provides the certainty they can’t get any place else.”
“Every plant manager understands that they have two jobs,” he added. “One is to be a good steward of the environment. The other is to make money. Any time there’s an overlap it is more comfortable for them.”
Onward & Upward For Distributed Wind
Kent also pointed out that wind turbines appeal to customers that want to toot their clean power horn to anyone within sight of their facility. That can cut both ways, but it is true that a rooftop solar array does not command the horizon quite like turbine blades spinning hundreds of feet overhead.
As for the growth prospects, Kent foresees that net metering for wind has the potential to drive the market for distributed wind energy, much as net metering has driven the solar market (net metering refers to systems that enable a wind or solar owner to sell their electricity back to the grid).
The opportunities for growth also apply to One Energy’s existing customers. Kent cited the example of Whirlpool, which initially ordered a single wind turbine for one of its factories. Based on that experience, the company has added more wind turbines over the years.
The small and micro end of the distributed wind energy market is still alive and kicking, too. For more insights on that, stay tuned for a CleanTechnica interview with Alice Orrell of the Energy Department’s Pacific NorthWest National Laboratory, who co-authored the 2018 Distributed Wind Market Report.
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Image: Distributed wind resources via US Department of Energy.
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