2017 Wind Technologies Market Report:

Summary
Ryan Wiser & Mark Bolinger, Lawrence Berkeley National Laboratory
August 2018

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 1

 2017 Wind Technologies Market Report

Purpose, Scope, and Data:

– Publicly available annual report summarizing key trends in the
U.S. wind power market, with a focus on 2017
– Scope focuses on land-based wind turbines over 100 kW
– Separate DOE-funded reports on distributed and offshore wind
– Data sources include EIA, FERC, SEC, AWEA, etc. (see full report)
Report Authors:
– Primary authors: Ryan Wiser and Mark Bolinger, Berkeley Lab
– Contributions from others at Berkeley Lab, Exeter Associates,
National Renewable Energy Laboratory
Funded by: U.S. DOE Wind Energy Technologies Office
Available at: http://energy.gov/windreport

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 2

 Report Contents

• Installation trends
• Industry trends
• Technology trends
• Performance trends
• Cost trends
• Wind power price trends
• Policy & market drivers
• Future outlook

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 3

 Key Findings
• Wind capacity additions continued at a rapid pace in 2017, with significant
additional new builds anticipated over next three years in part due to PTC
• Wind has been a significant source of new electric generation capacity
additions in the U.S. in recent years
• Supply chain is diverse and multifaceted, with strong domestic content for
nacelle assembly, towers, and blades
• Turbine scaling is significantly boosting wind project performance, while
the installed cost of wind projects has declined
• Wind power sales prices are at all-time lows, enabling economic
competitiveness (with the PTC) despite low natural gas prices
• Growth beyond current PTC cycle remains uncertain: could be blunted by
declining federal tax support, expectations for low natural gas prices and
solar costs, and modest electricity demand growth

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 4

 Installation Trends

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 5

 Wind Power Additions Continued at a Rapid Pace in 2017, with
7,017 MW of New Capacity, Bringing the Total to 88,973 MW
14 98
13 Southeast (annual, left scale) 91
12 Northeast (annual, left scale) 84
11 Great Lakes (annual, left scale) 77

Cumulative Capacity (GW)

Annual Capacity (GW)

10 70
West (annual, left scale)
9 63
8 Interior (annual, left scale) 56
7 Total US (cumulative, right scale) 49
6 42
5 35
4 28
3 21
2 14
1 7
0 0
2003

2013

2016
1998
1999
2000
2001
2002

2004
2005
2006
2007
2008
2009
2010
2011
2012

2014
2015

2017
• $11 billion invested in wind power project additions in 2017
• Over 80% of new 2017 capacity located in the Interior region
• Partial repowering trend: 2,131 MW of existing plants retrofitted w/ longer blades
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 6
 Wind Power Represented 25% of Electric-Generating Capacity
Additions in 2017, Behind Solar and Natural Gas
50 50%

(% of Total Annual Capacity Additions)

Total Annual Capacity Additions (GW)

40 40%

Wind Capacity Additions

Over the last decade, wind has
30 30%
comprised 30% of capacity
20 20% additions nationwide, and a much
10 10% higher proportion in some regions
0 0%
2009

2011

2013

2015

2017
2008

2010

2012

2014

2016
Wind Solar Other Renewable
Gas Coal Other Non-Renewable
Wind (% of Total, right axis)

2%
100%
Percentage of Generation Capacity

19% 18%
30%
80% 44%
Additions (2008-2017)

55%
60% Northeast
Great
Interior Lakes
40% West

20% Southeast

0%
Interior Great Lakes Northeast West Southeast U.S. Total

Wind Solar Other Renewable Gas Coal Other Non-Renewable

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 7

 Globally, the U.S. Placed 2nd in Annual Wind Power Capacity
Additions in 2017, and in Cumulative Wind Power Capacity

Annual Capacity Cumulative Capacity

(2017, MW) (end of 2017, MW)
China 19,660 China 188,392
United States 7,017 United States 88,973
Germany 6,581 Germany 56,132
United Kingdom 4,270 India 32,848
India 4,148 Spain 23,170
Brazil 2,022 United Kingdom 18,872
France 1,694 France 13,759
Turkey 766 Brazil 12,763
South Africa 618 Canada 12,239
Finland 535 Italy 9,479
Rest of World 5,182 Rest of World 82,391
TOTAL 52,492 TOTAL 539,019

• U.S. also remains a distant second to China in cumulative capacity

• Global wind additions in 2017 were below the 54,600 MW added in 2016 and
the record level of 63,000 MW added in 2015

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 8

 The United States is Lagging Other Countries in Wind as a
Percentage of Electricity Consumption

55%
Approximate Cumulative Wind Penetration, end of 2017
Proportion of Electricity Consumption

50%
Approximate Cumulative Wind Penetration, end of 2016
Estimated Wind Generation as a

45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

Brazil

Canada
Portugal

Netherlands

Poland

Mexico
Belgium

Italy
U.K.

Romania
Ireland
Denmark

Spain

Japan
France

GLOBAL
Australia

India
Austria
Germany

China
Sweden

United States
Turkey

Note: Figure only includes the countries with the most installed wind power capacity at the end of 2017
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 9
 The Geographic Spread of Wind Power Projects Across the United
States Is Broad, with the Exception of the Southeast

Note: Numbers within

states represent
cumulative installed
wind capacity and, in
brackets, annual
additions in 2017
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 10
 Texas Installed the Most Wind Power Capacity in 2017; 14 States
Exceed 10% Wind Energy, 4 States Exceed 30%
Installed Capacity (MW) 2017 Wind Generation as a Percentage of:
Annual (2017) Cumulative (end of 2017) In-State Generation In-State Load
Texas 2,305 Texas 22,599 Iowa 36.9% North Dakota 58.3%
Oklahoma 851 Oklahoma 7,495 Kansas 36.0% Kansas 47.1%
Kansas 659 Iowa 7,308 Oklahoma 31.9% Iowa 43.0%
New Mexico 570 California 5,555 South Dakota 30.1% Oklahoma 40.9%
Iowa 397 Kansas 5,110 North Dakota 26.8% Wyoming 26.3%
Illinois 306 Illinois 4,332 Maine 19.9% South Dakota 25.7%
Missouri 300 Minnesota 3,699 Minnesota 18.2% New Mexico 19.7%
North Dakota 249 Oregon 3,213 Colorado 17.6% Maine 19.5%
Michigan 249 Colorado 3,106 Idaho 15.4% Colorado 17.5%
Indiana 220 Washington 3,075 Texas 14.8% Nebraska 17.4%
North Carolina 208 North Dakota 2,996 Nebraska 14.6% Texas 17.3%
Minnesota 200 Indiana 2,117 New Mexico 13.5% Minnesota 16.7%
Nebraska 99 Michigan 1,860 Vermont 13.4% Montana 14.8%
Wisconsin 98 New York 1,829 Oregon 11.1% Oregon 13.5%
Colorado 75 New Mexico 1,682 Wyoming 9.4% Idaho 10.4%
Ohio 72 Wyoming 1,489 Montana 7.6% Illinois 8.3%
Oregon 50 Nebraska 1,415 California 6.8% Washington 8.3%
California 50 Pennsylvania 1,369 Hawaii 6.5% Hawaii 6.9%
Vermont 30 South Dakota 977 Washington 6.5% California 5.5%
Maine 23 Idaho 973 Illinois 6.2% Vermont 5.2%
Rest of U.S. 7 Rest of U.S. 6,774 Rest of U.S. 1.1% Rest of U.S. 1.2%
TOTAL 7,017 TOTAL 88,973 TOTAL 6.3% TOTAL 6.9%

• 2017 Wind Penetration by ISO: SPP: 23.2%; ERCOT: 17.4%; MISO: 7.7%; CAISO:
6.0%; NYISO: 2.7%; PJM: 2.7%; ISO-NE: 2.6%
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 11
 A Record Level of Wind Power Capacity Entered Transmission
Interconnection Queues in 2017; Solar and Storage Also Growing
200
Newly entered queues in that year
Capacity in Queues at Year-End (GW)

Entered queues in previous years

150

100

50

0
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
Wind Solar Nat. Gas Storage Nuclear Coal Other

Note: Not all of

• AWEA reports 33 GW of capacity under construction or in advanced this capacity will
development at end of 1Q2018 be built
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 12
 Larger Amounts of Wind Power Capacity Planned for Southwest
Power Pool, Midwest, Texas, and Mountain Regions

60
Entered queues in 2017
Nameplate Wind Power Capacity (GW)

Entered queues in prior years

50

40

30

20

10

0
SPP MISO ERCOT Mountain PJM Northwest ISO-New New York California Southeast
Midwest England ISO

Note: Not all of this capacity will be built

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 13

 Industry Trends

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 14

 Vestas, GE and Siemens-Gamesa Captured 88% of the U.S.
Market in 2017
Other
100% 20
REpower
90% 18
Turbine OEM US Market Share by MW

# of OEMs Serving >1% of Yearly Market

Clipper
80% 16
Suzlon
70% 14
Mitsubishi
60% 12
Goldwind
50% 10
Vensys
40% 8
Acciona
30% # of OEMs (right scale) 6 Nordex (+Acciona
post-2015)
20% 4 Gamesa

10% 2 Siemens (+Gamesa

post-2016)
0% 0 GE Wind
2010

2013

2016
2005

2006

2007

2008

2009

2011

2012

2014

2015

2017
Vestas

• Globally, Vestas, Siemens Gamesa, Goldwind and GE were the top suppliers of
wind turbines for land-based applications
• Chinese suppliers occupied 4 of the top 10 spots in the global ranking, based
primarily on sales within their domestic market
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 15
 The Domestic Supply Chain for Wind Equipment is Diverse

• Some manufacturers increased the

size of their U.S. workforce in 2017
and/or expanded existing facilities,
but expectations for significant
long-term supply-chain expansion
has become less optimistic
• Continued near-term expected
growth, but strong competitive
pressures and expected reduced
demand as PTC is phased out
• At least three domestic
manufacturing facility closures in
2017; one opening
• Many manufacturers remain; three
largest OEMs serving U.S. market
Note: map not intended to be exhaustive all have at least one U.S. facility
• Wind-related jobs reached a new
all-time high, at 105,500

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 16

 Domestic Manufacturing Capability for Nacelle Assembly, Towers,
& Blades Reasonably Well Balanced Against Historical Demand

18,000 Annual installed wind power capacity

Forecasted annual installed wind capacity (avg, min, max)
16,000 Nacelle assembly manufacturing capacity Past Projected
Tower manufacturing capacity
14,000 Blade manufacturing capacity
Capacity (MW)

12,000

10,000

8,000

6,000

4,000

2,000

0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 17

 Turbine OEM Profitability Has Generally Been Strong in Recent
Years, Compared to Near Breakeven from 2011 through 2013

20%

15%
OEM Proft Margins

10%

5%

0%

-5% Solid line with circle markers = EBITDA

Dashed line with square markers = EBIT

-10%
2009

2010

2011

2016

2017
2008
2010
2011
2012
2013
2014
2015
2016
2017
2008
2009
2011
2012
2013
2014
2015
2016
2017
2008
2009
2010
2012
2013
2014
2015
2017
2008
2009
2010
2011
2012
2013
2014
2015
2016
Gamesa Vestas Nordex Goldwind

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 18

 Imports of Wind Equipment into the United States Are Sizable;
Exports Remained Low in 2017
7
U.S. Imports:
Other wind-related equipment (estimated, 2006−2011)
Imports and Exports (Billion 2017$US)

6 Wind generators (2012−2017)

Wind blades and hubs (2012−2017)
5 Towers (estimated, 2006−2010)
Wind-powered generating sets & nacelles (estimated, 2014−2017)
4
Exports: Wind-powered
generating sets
3

0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2.5 GW 5.3 GW 8.4 GW 10 GW 5.2 GW 6.8 GW 13.1 GW 1.1 GW 4.9 GW 8.6 GW 8.2 GW 7 GW

Notes: Figure only includes tracked trade categories; misses other wind-related imports; see
full report for the assumptions used to generate this figure

• U.S. is net importer of wind equipment

• Exports of wind-powered generating sets = $60 million in 2017
• No ability to track other wind-specific exports, but total ‘tower and lattice mast’
exports equaled $39 million
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 19
 Tracked Wind Equipment Imports in 2017: 50% from Asia, 36%
from Europe, 14% from the Americas

Note: Tracked wind-specific equipment includes: wind-powered generating

sets, towers, hubs and blades, wind generators and parts

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 20

 Source Markets for Imports Have Varied Over Time, and By Type
of Wind Equipment
Wind-Powered Generating Sets
100%
Exporting Country (% of annual imports)

90%
China
80%
• Majority of imports of wind-
70%
60% powered generating sets
50% historically from home
40%
30%
Spain countries of OEMs,
20% dominated by Europe
10%
0%
• Decline in imports of towers
Annual
Imports
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
0.6 1.5 2.8 2.9 2.6 1.4 1.3 1.0 0.0 0.3 0.2 0.1 0.2
from Asia over time, in part
due to tariff measures
(billion
2017$) Generators & Parts
Towers Blades & Hubs
100%
90% • Majority of imports of blades
Spain
80% Spain Mexico
& hubs from China
Canada
70%
60%
India • Globally diverse sourcing
S. Korea
50%
Canada
strategy for generators &
40%
Mexico
Spain
Germany
parts, but with drop from
30%
China & growth from Mexico
China
20% S. Korea
Vietnam
10% Indonesia
0% China
2011 2017 2012 2017 2012 2017
0.5 0.9 0.1 0.3 0.3 0.3 0.2 1.0 0.3 0.5 0.8 0.9 1.0 0.5 0.2 0.3 0.4 0.4 0.3

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 21

 Domestic Manufacturing Content is Strong for Nacelle Assembly,
Towers, and Blades, but not Equipment Internal to the Nacelle

Domestic Content for 2017 Turbine Installations in the United States:

Towers Blades & Hubs Nacelle Assembly

70–90% 50–70% > 85%

• Imports occur in untracked trade categories, including many nacelle

internals; nacelle internals generally have domestic content of < 20%

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 22

 The Project Finance Environment Remained Strong in 2017

12%

10%
Tax Equity Yield (after-tax)
8%

15-Year Debt Interest Rate (pre-tax)

6%

4%

2%
15-Year Debt Interest Rate (after-tax)
0%
Jul-08
Jul-05

Jul-06

Jul-07

Jul-09

Jul-10

Jul-11

Jul-12

Jul-13

Jul-14

Jul-15

Jul-16

Jul-17
Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18
• Sponsors raised $6 billion of tax equity and $2.5 billion of debt in 2017
• Tax reform legislation contained a number of provisions with implications for
wind finance, but general consensus that the overall impact will be benign
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 23
 Independent Power Producers Own the Majority of Wind Assets
Built in 2017

100% 100%
2017 Capacity by
90% 90%
% of Cumulative Installed Capacity

Owner Category
80% 80%
70% 70%
60% 60% IPP:
6,400 MW (91%)
50% 50%
40% Other 40%
30% Publicly Owned Utility (POU) 30%
IOU:
20% Investor-Owned Utility (IOU) 20% 615 MW
(9%)
10% Independent Power Producer (IPP) 10%
Other:
0% 0% 2 MW (0%)
2000
1998
1999

2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

• Utility ownership should increase in the coming years as many utilities have recently
announced plans to build and own new wind assets.
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 24
 Long-Term Sales to Utilities Remained Most Common Off-Take,
but Direct Retail Sales and Merchant Were Significant

100% 100%
90% 90%
% of Cumulative Installed Capacity

80% 80%
70% 70%
Merchant: IOU:
60% 60% 1,406 MW 1,896 MW
(20%) (27%)
50% 50%
40% Merchant/Quasi-Merchant 40% Retail: POU:
On-Site 1,692 MW 1,242 MW
30% 30% (24%) (18%)
Direct Retail
20% Power Marketer 20%
Undisclosed
10% POU 10%
Power Marketer Undisclosed
IOU
0% 0% 401 MW (6%) 373 MW (5%)
1999

2010

2015
1998

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

2011
2012
2013
2014

2016
2017

• 24% of added wind capacity in 2017 are from direct retail sales; 40% of total wind
capacity contracted through PPAs in 2017 involve non-utility buyers
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 25
 Technology Trends

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 26

 Turbine Capacity, Rotor Diameter, and Hub Height Have All
Increased Significantly Over the Long Term, and in 2017

2.4 120

Average Hub Height & Rotor Diameter (m)

2.2 110
Average Nameplate Capacity (MW)

2.0 100
1.8 90
1.6 80
1.4 70
1.2 60
1.0 50
0.8 40
0.6 30
Average Nameplate Capacity (left scale)
0.4 20
Average Rotor Diameter (right scale)
0.2 Average Hub Height (right scale) 10
0.0 0
2002−03

2004−05
1998−99

2000−01

2006

2011

2012

2013
2007

2008

2009

2010

2014

2015

2016

2017
Commercial Operation Year

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 27

 Growth in Rotor Diameter and Nameplate Capacity Have
Outpaced Growth in Hub Height over the Last Two Decades

Nameplate Capacity
100% 2.4
90% 2.2

Average Nameplate Capacity (MW)

2.0
80%
(% of total turbines for year)
Turbine Nameplate Capacity

70%
1.8
1.6 Rotor Diameter
60% 1.4
≥ 3.0 MW 100% 120
50% 2.5−3.0 MW 1.2
40%
2.0−2.5 MW 1.0 90% 110

Average Rotor Diameter (meters)

1.5−2.0 MW
0.8 100
30% 1.0−1.5 MW
80%

(% of total turbines for year)

<1.0 MW 0.6
90

Turbine Rotor Diameter

20%
Average 0.4
10%
70%
0.2 80
0% 0.0 60% 70
1998−99

2000−01

2002−03

2004−05

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

50% ≥120 m 60
Commercial Operation Year
110−120 m 50
40%
Hub Height 30%
100−110 m
90−100 m
40
80−90 m 30
100% 100 20% 70−80 m 20
90% 90
10% <70 m
10
Average Hub Height (meters)
(% of total turbines for year)

80% 80
Average
0% 0
Turbine Hub Height

70% 70

1998−99

2000−01

2002−03

2004−05

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017
60% 60
50% 50
≥100 m
40% 90−100 m 40 Commercial Operation Year
30% 80−90 m 30
70−80 m
20% <70 m 20
10% Average 10
0% 0
1998−99

2000−01

2002−03

2004−05

2006

2007

2010

2011

2014

2015
2008

2009

2012

2013

2016

2017

Commercial Operation Year

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 28

 Turbines Originally Designed for Lower Wind Speed Sites Have
Rapidly Gained Market Share
IEC Class
100%
90% Class 3
Class 2/3

(% of total turbines for year)

80%
Class 2
70% Class 1/2

Turbine IEC Class

60% Class 1

50%
Specific Power 40%

100% 400 30%

20%
90% 350 10%

Average Specific Power (W/m2)

(% of total turbines for year)

80% 0%
300
Turbine Specific Power

2000−01

2002−03

2004−05
1998−99

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017
70%
250 Commercial Operation Year
60%
≥180−200 W/m2
50% ≥200−250 W/m2 200
40%
≥250−300 W/m2
150
Specific Power by
≥300−350 W/m2
30% ≥350−400 W/m2
100
Selected IEC Class
20% ≥400−700 W/m2
Average 450
10% 50 IEC Class 2

2, 2/3, and 3 Wind Turbines (W/m2)

Average Specific Power for IEC Class
400 IEC Class 2/3
0% 0 IEC Class 3
Avg. Specific Power (all turbines)
2000−01
1998−99

2002−03

2004−05

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

350

Commercial Operation Year 300

250
• Specific power: turbine nameplate capacity divided by
200
swept rotor area; lower specific power leads to higher
capacity factors, as shown later 150

• IEC Class 1/2/3 represent turbines designed originally for 100

1998−99

2004−05
2000−01

2002−03

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017
high, medium, and low wind speed, respectively Commercial Operation Year

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 29

 Wind Turbines Were Deployed in Somewhat Lower Wind-Speed
Sites in 2017 in Comparison to the Previous Three Years

100 8.8
Average 80m Wind Resource Quality (left scale)
Index of Wind Resource Quality at 80m

8.6

Average Wind Speed at 80m (m/s)

Average 80m Wind Resource Quality for Future Projects
95 Average Wind Speed at 80m (past and future projects, right scale) 8.4
8.2
(1998−1999=100)

90
8.0
7.8
85
7.6
7.4
80
7.2
75 7.0
6.8
70 6.6
2006

2009
2010

2013
2014
2015

2017
2007
2008

2011
2012

2016

Pending
Proposed
1998−99

2004−05
2000−01
2002−03

Commercial Operation Year

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 30

 Low Specific Power Turbines Are Deployed in Low & High Wind
Speeds; Taller Towers Predominate in Great Lakes & Northeast
By Region
Hub Height Specific Power IEC Class
<90 m ≥250 W/m2 Class 2, 1/2 and 1
90-<100 m 200-<250 W/m2 Class 2/3
≥100 m ≥180-<200 W/m2 Class 3
100%
Percent of Turbines Installed Within

90%
Each Region from 2015−2017

80%
70%
60%
50%
40%
30%
20%
10%
By Wind Resource Quality
0%
Hub Height Specific Power IEC Class
West

West

West
Northeast

Northeast

Northeast
Interior

Interior

Interior
Great

Great
Great

Lakes

Lakes
Lakes

<90 m ≥250 W/m2 Class 2, 1/2 and 1

90−<100 m 200−<250 W/m2 Class 2/3
≥100 m ≥180-<200 W/m2 Class 3

Each Resource Class from 2015−2017

Percent of Turbines Installed Within 100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Lower

Lower

Lower
Higher
Higher

Higher
Highest

Highest

Highest
Medium
Medium

Medium
Estimated Wind Resource Quality at 80 Meters

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 31

 Wind Power Projects Planned for the Near Future Are Poised to
Continue the Trend of Ever-Taller Turbines

700 35%
Median Tip Height (with 25th and 75th percentiles)
600 % of FAA applications >500 ft (right axis) 30%

% of FAA Applications > 500 Feet

Turbine Tip Height (feet)

500 25%

400 20%

300 15%

200 10%

100 5%

0 0%
2004−05
2002−03

(partial)
2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017
2018
Application Year

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 32

 A Large Number of Projects Continued to Employ Multiple
Turbine Configurations from a Single Turbine Supplier

30%
% of All Projects (≥6 turbines) Using Multiple
Turbine Configurations From a Single OEM

GE Wind
25% Vestas
Siemens Gamesa
20% Other OEMs

15%

10%

5%

0%
2010 2011 2012 2013 2014 2015 2016 2017
(n=56) (n=72) (n=123) (n=11) (n=38) (n=56) (n=56) (n=45)
Commerical Operation Year (n = all projects with ≥6 turbines)
Note: Turbine configuration = unique combination of hub height, rotor diameter, and/or capacities
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 33
 Turbines that Were Partially Repowered in 2017 Now Have
Significantly Larger Rotors and Lower Specific Power
100 2.0
 left axis right axis 

Average Nameplate Capacity (MW)

90 1.8
90.4
80 1.6
Rotor Diameter (meters)
Average Hub Height &

1.62 1.63
70 77.9 77.9 78.2 1.4
60 1.2
50 1.0
40 0.8
30 0.6
20 0.4
10 0.2
0 0.0
Original Repowered Original Repowered Original Repowered
Hub Height Rotor Diameter Capacity

Turbine Specifications

• Average specific power declined from 335 W/m2 to 252 W/m2 for the 2,131 MW
of turbines partially repowered in 2017
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 34
 Performance Trends

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 35

 Sample-Wide Capacity Factors Have Gradually Increased, but
Are Impacted by Curtailment & Inter-Year Resource Variability

Index of Inter-Annual Variability in Wind Generation

40% 120%
Average Capacity Factor in Calendar Year

35% 115%

30% 110%

25% 105%

20% 100%

15% 95%
Capacity Factor Based on Estimated Generation (if no curtailment)
10% 90%
Capacity Factor Based on Actual Generation (with curtailment)
5% Capacity Factor Normalized for Inter-Annual Variability (if no curtailment) 85%
Index of Inter-Annual Variability in Wind Generation (right scale)
0% 80%
Year: 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
# of GW: 0.6 0.9 2.7 3.1 4.5 5.1 8.0 10.0 14.9 23.6 33.3 38.5 44.6 58.2 59.4 64.3 72.6 79.6

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 36

 Wind Curtailment Varies by Region; Was Highest in MISO in
2017, but Highest-Ever in ERCOT in 2009
20% 25%
18% Wind Curtailment (left axis)

Wind Penetration (as a % of load)

16% Wind Penetration (right axis) 20%
Wind Curtailment

14%
12% 15%
10%
8% 10%
6%
4% 5%
2%
0% 0%
2014-17 2007-17 2009-17 2015-17 2012-17 2014-17 2012-17 2007-17
SPP ERCOT MISO CAISO NYISO ISO-NE PJM Total

• In areas where curtailment has been particularly problematic in the past—

principally in Texas—steps taken to address the issue have born fruit
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 37
 Capacity Factors Have Increased Significantly Over Time, by
Online Date (i.e., Commercial Online Date, COD)

60%
Generation-Weighted Average
Capacity Factor in 2017 (by project COD)

Individual Project
50%

40%

30%

20%

10%

0%
COD: '98-99 '00-01 '02-03 '04-05 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
# of GW: 0.9 1.8 2.0 2.3 1.6 5.3 7.9 9.3 4.7 5.8 13.5 1.0 5.0 8.0 8.2

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 38

 Trends Explained by Competing Influences of Lower Specific
Power, Higher Hub Heights, Varying Quality Wind Resource Sites

55% Weighted-Average Capacity Factor in 2017 (left scale) 180

Index of Capacity Factor Influences (1998-99=100)

50% Index of the Inverse of Built Specific Power (right scale) 170
Index of Built Turbine Hub Height (right scale)
45% 160
Average Capacity Factor in 2017

Index of Built Wind Resource Quality at 80m (right scale)

40% 150
35% 140
30% 130
25% 120
20% 110
15% 100
10% 90
5% 80
0% 70

2014
2006

2007

2008

2009

2010

2011

2012

2013

2015

2016

2017
1998-99

2000-01

2002-03

2004-05

Commercial Operation Date

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 39

 Controlling for Wind Resource Quality and Specific Power
Demonstrates Impact of Turbine Evolution
50%
Average Capacity Factor in 2017

45%
40%
35%
30%
25%
20%
Specific Power ≥ 400 (2.9 GW)
15% Specific Power range of 350–400 (6.9 GW)
10% Specific Power range of 300–350 (35.1 GW)
Specific Power range of 250–300 (17.9 GW)
5%
Specific Power < 250 (14.1 GW)
0%
Lower Medium Higher Highest
15.5 GW 17.2 GW 22.3 GW 21.8 GW
Estimated Wind Resource Quality at Site

• Turbine design changes are driving capacity factors higher for projects located in
given wind resource regimes
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 40
 Controlling for Wind Resource Quality and Commercial Operation
Date Also Illustrates Impact of Turbine Evolution

50%
45%
Average Capacity Factor in 2017

40%
35%
30%
25%
20%
Highest Wind Resource Quality
15%
Higher Wind Resource Quality
10%
Medium Wind Resource Quality
5% Lower Wind Resource Quality
0%
1998- 2000- 2002- 2004- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
99 01 03 05 Commercial Operation Date

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 41

 Change in Performance as Projects Age Also Impacts Overall
Trends; Performance Degradation Shown After Year Nine

120%
Indexed Capacity Factor (Year 2=100%)

110%

100%

90%

80%

Sample includes projects with COD from 1998 to 2016

70%

60%
Median (with 10th/90th percentile error bars)
Capacity-Weighted Average
50%
Years post-COD: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Sample GW: 70.8 70.8 62.6 57.8 56.6 42.9 37.3 32.3 22.4 14.7 9.4 6.7 4.6 4.2 2.7 2.3 0.6 0.6

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 42

 Regional Variations in Capacity Factors Reflect the Strength of
the Wind Resource and Adoption of New Turbine Technology
55%
Sample includes projects built in 2015 or 2016
50%
45%
Capacity Factor in 2017

40%
35%
30%
25%
20%
15% Weighted Average (by region)
10% Weighted Average (total U.S.)

5% Individual Project (by region)

0%
Southeast Northeast West Great Lakes Interior
133 MW 629 MW 308 MW 709 MW 14,412 MW
Note: Limited sample size in some regions 45%
Specific Power ≥ 400 (3.0 GW)
Specific Power range of 350–400 (6.9 GW) Regional averages
Average Capacity Factor in 2017 40% Specific Power range of 300–350 (35.1 GW)
Specific Power range of 250–300 (17.8 GW)
35% Specific Power < 250 (14.1 GW)

30%
25%
20%
15%
10%
5%
0%
West Northeast Great Lakes Interior
12.6 GW 4.5 GW 8.6 GW 50.2 GW
Region

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 43

 Cost Trends

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 44

 Wind Turbine Prices Remained Well Below the Levels Seen a
Decade Ago

2,600 U.S. Orders <5 MW

Turbine Transaction Price (2017$/kW)

2,400 U.S. Orders 5 - 100 MW

2,200 U.S. Orders >100 MW
2,000 Vestas Global Average
SGRE Global Average
1,800
BNEF Global Index
1,600
MAKE U.S. Index
1,400
1,200
1,000
800
600
400
200
0
Jan-99
Jan-00

Jan-02
Jan-03
Jan-04

Jan-06
Jan-07

Jan-10
Jan-11

Jan-14
Jan-15

Jan-18
Jan-97
Jan-98

Jan-01

Jan-05

Jan-08
Jan-09

Jan-12
Jan-13

Jan-16
Jan-17
Announcement Date

• Recent turbine orders in the range of $800-950/kW

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 45
 Lower Turbine Prices Have Driven Reductions in Reported
Installed Project Costs

6,000 Interior (49.7 GW)

Installed Project Cost (2017 $/kW)

West (12.4 GW)

5,000 Great Lakes (8.3 GW)
Northeast (4.5 GW)
4,000 Southeast (1.1 GW)
Capacity-Weighted Average
3,000

2,000

1,000

0
1998

2003

2008
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997

1999
2000
2001
2002

2004
2005
2006
2007

2009
2010
2011
2012
2013
2014
2015
2016
2017
Commercial Operation Date

• 2017 projects had an average cost of $1,610/kW, down $795/kW since 2009-2010
• Limited sample of under-construction projects suggest somewhat lower costs in 2018
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 46
 Economies of Scale Are Apparent, Especially when Moving from
Small- to Medium-Sized Projects
4,500
Capacity-Weighted Average Project Cost
4,000 Individual Project Cost
Installed Project Cost (2017 $/kW)

3,500
Sample includes projects built in 2016 or 2017
3,000

2,500 Project Size

2,000

1,500

1,000

500

0
Project size: ≤5 MW 5-20 MW 20-50 MW 50-100 MW 100-200 MW >200 MW
# of MW: 21 MW 15 MW 201 MW 1,401 MW 4,557 MW 6,215 MW

4,500
Capacity-Weighted Average Project Cost
Installed Project Cost (2017 $/kW)

4,000 Individual Project Cost

3,500
Sample includes projects built in 2016 or 2017
3,000

2,500

2,000 Turbine Size

1,500

1,000

500

0
Turbine size: ≥1 & <2 MW ≥2 & <3 MW ≥3 MW
# of MW: 1,142 MW 9,344 MW 1,923 MW Note: Includes 2016 and 2017 projects
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 47
 Regional Differences in Average Wind Power Project Costs Are
Apparent, but Sample Size Is Limited

4,500 Capacity-Weighted Average Project Cost

Individual Project Cost
Installed Project Cost (2017 $/kW)

4,000
Capacity-Weighted Average Cost, Total U.S.
3,500
Sample includes projects built in 2016 or 2017
3,000

2,500

2,000

1,500

1,000

500

0
Interior Great Lakes Southeast West Northeast
10,487 MW 1,081 MW 311 MW 66 MW 466 MW

Note: Includes 2016 and 2017 projects

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 48
 Most Projects—and All of the Low-Cost Projects—Are Located in
the Interior; Other Regions Have Higher Costs

18 3600
Southeast Southeast
16 3200
Northeast Northeast
14 2800
Number of Projects

Great Lakes 2400 Great Lakes

12

Number of MW
10 West 2000 West

8 Interior 1600 Interior

6 1200
4 800
2 400
0 0
1800
1200
1500

2100
2400
2700
3000
3300
3600
3900
4200

4200
1200
1500
1800
2100
2400
2700
3000
3300
3600
3900
Installed Cost ≥ (2017 $/kW) Installed Cost ≥ (2017 $/kW)

Note: Includes 2016 and 2017 projects

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 49
 O&M Costs Vary By Project Age and Commercial Operations Date

160
Projects with no 2017 O&M data
150
Average Annual O&M Cost 2000-2017

140 Projects with 2017 O&M data

130
120
110
(2017 $/kW-yr)

100
90
80
70
60
50
40
30
20
10
0
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Commercial Operation Date
Note: Sample is limited; few projects in sample have complete records of O&M costs
from 2000-17; O&M costs reported here DO NOT include all operating costs

• Capacity-weighted average 2000-2017 O&M costs for projects built in the 1980s
equal $70/kW-year, dropping to $58/kW-year for projects built in the 1990s, to
$28/kW-year for projects built in the 2000s and since 2010
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 50
 O&M Costs Are Lower for More-Recent Projects, and Increase
with Age for the Older Projects
75
Commercial Operation Date:
Median Annual O&M Cost (2017 $/kW-year)

70
65 1998-2004
60 2005-2010
55 2011-2016
50
45
40
35
30
25
20
15
10

n=34

n=25
n=39
n=16

n=39
n=16

n=11
n=39
n=39
n=33

n=23

n=39
n=39
n=31

n=23
n=37

n=21
n=28
n=18

n=5
n=6
n=6
n=5
n=6

n=8
n=7
n=9

n=2
n=6

n=8
n=6
n=4
n=4

5
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Project Age (Number of Years Since Commercial Operation Date)
Note: Sample size is limited
• O&M reported in figure does not include all operating costs: statements from
one public company with a large U.S. wind portfolio reports total operating costs
in 2017 for projects built in the 2000s of ~$53/kW-year
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 51
 Wind Power Price Trends

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 52

 Sample of Wind Power Sales Prices
• Berkeley Lab collects data on historical wind power sales
prices, and long-term PPA prices
• PPA sample includes 435 contracts totaling 40,360 MW
from projects built from 1998 to 2017, or planned for
installation in 2018 or beyond
• Prices reflect the bundled price of electricity and RECs as
sold by the project owner under a PPA
– Dataset excludes merchant plants, projects that sell renewable energy
certificates (RECs) separately, and direct retail sales
– Prices reflect receipt of state and federal incentives (e.g., the PTC or
Treasury grant), as well as various local policy and market influences;
as a result, prices do not reflect wind energy generation costs

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 53

 Wind PPA Prices Remain Very Low, and Are Competitive with the
Levelized Fuel Cost of a Gas Plant

$120 Interior (26.5 GW)

West (7.5 GW) 150 MW
Levelized PPA Price (2017 $/MWh)

$100 Great Lakes (4.4 GW)

Northeast (1.5 GW) 50 MW
Southeast (0.5 GW)
$80
25 MW

$60 200 MW

$40

$20
Levelized 20-year EIA gas price projections (converted at 7.5 MMBtu/MWh)
$0
Jan-97

Jan-04

Jan-11

Jan-18
Jan-96

Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03

Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10

Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
PPA Execution Date

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 54

 A Smoother Look at the Time Trend Shows a Steep Decline in
Pricing Since 2009; Prices Below $20/MWh in Interior Region

$100
Average Levelized PPA Price (2017 $/MWh)

$90
$80
$70
$60
$50
$40
$30
$20 Nationwide Interior
Great Lakes West
$10 Northeast
$0
PPA Year: 96-99 00-01 02-03 04-05 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GW: 0.6 1.2 1.4 2.2 2.4 1.8 3.5 4.0 4.9 4.8 1.2 5.4 2.0 2.6 1.6 0.8

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 55

 The Relative Competitiveness of Wind Power Has Been Affected
by Declines in the Wholesale Market Value of Wind Energy
120
Wind Wholesale Energy Market Value

ISO-NE
100
Average Levelized Wind PPA Price with 10th/90th
and PPA Prices (2017 $/MWh)

NYISO
Percentiles (by year of PPA execution)
80 PJM
SERC
60 MISO
SPP
40 ERCOT
WECC
20
CAISO

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

• Wholesale market value considers hourly local wholesale energy price and regional hourly
wind output profile; additional capacity value ~$3/MWh available in some regions
• Price comparisons shown are far from perfect—see full report for caveats
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 56
 The Wholesale Energy Market Value of Wind Energy in 2017
Varied by Region: Lowest in SPP, Highest in CAISO

30
Wind Wholesale Energy Market Value in

25
2017, by Region (2017 $/MWh)

20

15

10

0
CAISO ISO-NE PJM MISO NYISO ERCOT WECC SERC SPP

• Price comparisons shown are far from perfect—see full report for caveats
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 57
 Recent Wind Prices Are Competitive with the Expected Future
Cost of Burning Fuel in Natural Gas Plants

80 Generation-weighted average wind PPA price among 46 PPAs signed in 2015–2017

Median wind PPA price (and 10th/90th percentiles) among 46 PPAs signed in 2015–2017
70

60
2017 $/MWh

50 Range of AEO18 natural gas fuel cost projections

AEO18 reference case natural gas fuel cost projection
40

30

20

10

0
2019

2026

2033

2040

2047
2018

2020
2021
2022
2023
2024
2025

2027
2028
2029
2030
2031
2032

2034
2035
2036
2037
2038
2039

2041
2042
2043
2044
2045
2046

2048
2049
2050
• Price comparisons shown are far from perfect—see full report for caveats
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 58
 Renewable Energy Certificate (REC) Prices in Key RPS Markets
Fell Significantly in 2017, Reflecting Growing Supplies
New England PJM Texas & Voluntary Market
$80 $40 $10
CT MA DC DE TX
ME NH IL MD Vol. (nat'l)
RI NJ OH Vol. (west)
$8
PA
$60 $30
2017$/MWh

$6

$40 $20
$4

$20 $10
$2

$0 $0 $0

2010
2011
2012

2017
2018
2013
2014
2015
2016
2010
2011

2013
2014

2017
2012

2015
2016

2018

2013
2014
2015
2010
2011
2012

2016
2017

• REC prices vary by: market type (compliance vs. voluntary); geographic region; 2018
specific design of state RPS policies
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 59
 The Levelized Cost of Wind Energy Is at an All-Time Low

$140

$120
Average LCOE (2017 $/MWh)

$100

$80

$60
Nationwide (75.4 GW)
$40 Interior (49.6 GW)
Great Lakes (8.3 GW)
West (11.8 GW)
$20
Northeast (4.5 GW)
Southeast (1.1 GW)
$0
COD Year: 98-99 00-01 02-03 04-05 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GW: 0.9 1.7 1.9 2.0 1.8 3.6 6.3 9.6 5.1 6.3 9.5 0.9 5.1 8.2 7.1 5.3

• Estimates reflect variations in installed cost, capacity factors, operational costs,

and cost of financing; include accelerated depreciation but exclude PTC
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 60
 Policy and Market Drivers

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 61

 The Federal Production Tax Credit (PTC) Remains One of the
Core Motivators for Wind Power Deployment
Effective PTC
Date Start of End of Planning Window
Legislation
Enacted PTC Window PTC Window (considering lapses and early
extensions)
Energy Policy Act of 1992 10/24/1992 1/1/1994 6/30/1999 80 months • 5-year extension of PTC
>5-month lapse before expired PTC was extended
Ticket to Work and Work in 2015, plus guidance
Incentives Improvement Act of 12/19/1999 7/1/1999 12/31/2001 24 months
1999 allowing 4 years for
>2-month lapse before expired PTC was extended
Job Creation and Worker
3/9/2002 1/1/2002 12/31/2003 22 months
project completion after
Assistance Act
>9-month lapse before expired PTC was extended the start of construction
The Working Families Tax
Relief Act
10/4/2004 1/1/2004 12/31/2005 15 months
• PTC phase-out, with
Energy Policy Act of 2005 8/8/2005 1/1/2006 12/31/2007 29 months
Tax Relief and Healthcare Act
12/20/2006 1/1/2008 12/31/2008 24 months
progressive reduction in
of 2006
Emergency Economic
10/3/2008 1/1/2009 12/31/2009 15 months
the value of the credit for
Stabilization Act of 2008
The American Recovery and
2/17/2009 1/1/2010 12/31/2012 46 months
projects starting
Reinvestment Act of 2009
2-day lapse before expired PTC was extended construction after 2016
American Taxpayer Relief Act Start construction 12 months (in which to start
of 2012
1/2/2013 1/1/2013
by 12/31/2013 construction) • PTC phases out in 20%-
>11-month lapse before expired PTC was extended
Tax Increase Prevention Act of
12/19/2014 1/1/2014
Start construction 2 weeks (in which to start per-year increments for
2014 by 12/31/2014
>11-month lapse before expired PTC was extended
construction)
projects starting
Start construction
by 12/31/2016
12 months to start construction
and receive 100% PTC value
construction in 2017
Consolidated Appropriations
Start construction
by 12/31/2017
24 months to start construction
and receive 80% PTC value
(80% PTC value), 2018
12/18/2015 1/1/2015
Act of 2016 Start construction
by 12/31/2018
36 months to start construction
and receive 60% PTC value
(60%), 2019 (40%)
Start construction 48 months to start construction
by 12/31/2019 and receive 40% PTC value

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 62

 State Policies Help Direct the Location and Amount of Wind
Development, but Wind Growth is Outpacing State Targets

ME: 40% by 2017

WA: 15% by 2020 MN: 26.5% by 2025
MT: 15% by 2015 Xcel: 31.5% by 2020 NH: 24.8% by 2025

MI: 15% by 2021 VT: 75% by 2032 MA: 11.1% by 2009 +1%/yr
OR: 50% by 2040 (large IOUs) WI: 10% by 2015 NY: 50% by 2030 RI: 38.5% by 2035
5-25% by 2025 (other utilities)
PA: 8.5% by 2020 CT: 23% by 2020
NV: 25% by 2025 IA: 105 MW by 1999 OH: 12.5% by 2026 NJ: 50% by 2030

IL: 25% by 2025 DE: 25% by 2025

DC: 50% by 2032
CO: 30% by 2020 (IOUs) MO: 15% by 2021
CA: 50% by 2030 MD: 25% by 2020
20% by 2020 (co-ops)
10% by 2020 (munis)
NC: 12.5% by 2021 (IOUs)
10% by 2018 (co-ops and munis)
AZ: 15% by 2025 NM: 20% by 2020 (IOUs)
10% by 2020 (co-ops)

TX: 5,880 MW by 2015

HI: 100% by 2045

• 29 states and D.C. have mandatory RPS programs, which can support ~4.5 GW/yr
of renewable energy additions on average through 2030 (less for wind specifically)
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 63
 System Operators Are Implementing Methods to Accommodate
Increased Penetrations of Wind

$20

Integrating wind energy into $18

WECC (Non-CA)

power systems is manageable,

$16 California ISO

Integration Cost ($/MWh)

$14 ERCOT
Eastern Interconnection
but not free of additional costs $12 Midcontinent ISO
Southwest Power Pool
$10

$8

$6

$4

$2

Transmission Barriers Remain $0

0% 10% 20% 30% 40% 50% 60% 70%
Wind Penetration (Capacity Basis)
5000
≥500 kV Notes: Because methods vary and a consistent set
4500
of operational impacts has not been included in
Completed Transmission (miles/year)

345 kV
4000
≤ 230 kV
each study, results from the different analyses of
3500 integration costs are not fully comparable.
3000
2500
2000
1500
1000
500
0
2009 2010 2011 2012 2013 2014 2015 2016 2017

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 64

 Future Outlook

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 65

 Sizable Wind Additions Anticipated for 2018–2020 Given Federal
Tax Incentives; Downturn and Uncertainty Beyond 2020
14
BNEF (2018d)
12 MAKE (2018)
Navigant (2018)
Annual Capacity (GW)

10 IHS (2018)

0
1999
2000

2002
2003

2006
2007

2009
2010

2013
2014

2016
2017

2020
2021

2023
2024
1998

2001

2004
2005

2008

2011
2012

2015

2018
2019

2022

2025
Historical Wind Power Capacity Additions Forecasts (bar = average)

• Wind additions through 2020 consistent with deployment trajectory analyzed in

DOE’s Wind Vision report; not so after 2020
U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 66
 Future Outlook, Beyond Current PTC Cycle, is Uncertain

Current Low Prices for Wind, Future Technological

Advancement, and Direct Retail Sales May Support
Higher Growth in Future, but Headwinds Include:
• Phase-out of federal tax incentives
• Continued low natural gas and wholesale electricity prices
• Potential decline in market value as wind penetration increases
• Modest electricity demand growth
• Limited near-term demand from state RPS policies
• Limited transmission infrastructure in some areas
• Growing competition from solar in some regions

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 67

 Conclusions
• Wind capacity additions continued at a rapid pace in 2017, with significant
additional new builds anticipated over next three years in part due to PTC
• Wind has been a significant source of new electric generation capacity
additions in the U.S. in recent years
• Supply chain is diverse and multifaceted, with strong domestic content for
nacelle assembly, towers, and blades
• Turbine scaling is significantly boosting wind project performance, while
the installed cost of wind projects has declined
• Wind power sales prices are at all-time lows, enabling economic
competitiveness (with the PTC) despite low natural gas prices
• Growth beyond current PTC cycle remains uncertain: could be blunted by
declining federal tax support, expectations for low natural gas prices and
solar costs, and modest electricity demand growth

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 68

 For More Information

See full report for additional findings, a discussion of the

sources of data used, etc.:
– windreport.lbl.gov
To contact the primary authors:
– Ryan Wiser, Lawrence Berkeley National Laboratory
510-486-5474, RHWiser@lbl.gov
– Mark Bolinger, Lawrence Berkeley National Laboratory
603-795-4937, MABolinger@lbl.gov

Berkeley Lab’s contributions to this report were funded by the Wind Energy
Technologies Office, Office of Energy Efficiency and Renewable Energy of the U.S.
Department of Energy under Contract No. DE-AC02-05CH11231. The authors are
solely responsible for any omissions or errors contained herein.

U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY 69