Electricity from Renewable Resources Status, Prospects, and Impediments (2010) / Chapter Skim
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6 Deployment of Renewable Electric Energy
6 Deployment of Renewable Electric Energy
Pages 241-290
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From page 241... ...
As noted in Chapter 3, in many ways new renewable electricity technolo gies, and the thinking that will enable them, represent disruptive rather than 1A stage after product development but before commercialization when the financial invest ment required to move a new technology to commercialization may exceed the ability of a new business to raise capital.
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From page 242... ...
This chapter explores the logistical and market barriers to commercial scale deployment of renewable electricity. Although individual renewable energy enewable technologies have unique developmental and economic characteristics, there are , common, non-technical challenges as well, including (1)
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From page 243... ...
Thus, to grow the renewable electricity market, which is increasingly driven by the private sector, will require continued and ramped up investment in order to deploy, operate, and maintain these technologies. Materials, Manufacturing, and Development Considerations Raw and Basic Materials Renewable energy technologies potentially can be restricted by a scarcity of key raw materials.
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From page 244... ...
Wind turbine manufacturers are particularly affected by these material shortages. Global competition for essential elements has, in recent years, driven up the costs of commodities and limited the materials available for wind energy projects.
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From page 245... ...
, the solid bar represents U.S. reserves and the dashed lines represent a best guess about world reserves. Source: Feltrin and Freundlich, 2008. Manufacturing and Development Wind Power Industry Developers face shortages of wind turbines due to continuing strong demand for wind power both in the United States and globally (AWEA, 2008)
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From page 246... ...
Electricity from Renewable Resources TABLE 6.2 Yearly Raw Materials Required in 2030 to Meet Wind Turbine Demand in 20 Percent Wind Scenario (in units of thousands of metric tons) Permanent kWh/kga Year Magnet Concrete Steel 2006 65 0.03 1,614 110 2010 70 0.07 6,798 464 2015 75 0.96 16,150 1,188 2020 80 2.20 37,468 2,644 2025 85 2.10 35,180 2,544 2030 90 2.00 33,800 2,308 aProposed scenario for energy density improvement for wind turbine growth during the 2006–2030 period.
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From page 247... ...
have shown increased inter est in wind power projects; IPPs develop a variety of electricity generation facili
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3500 Average Project Cost 3000 Polynomial Trend Line 2500 2000 1500 1000 500 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 Year FIGURE 6.5 Installed wind project costs over time. Source: DOE, 2008b. R 6.5 ties for the wholesale electricity market. IPPs have to compete against developers whose sole focus is the development of wind power projects (termed the pure play wind developers)
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From page 249... ...
Solar PV Industry Like wind power, the large growth rate for solar PV, both within the United States and globally, has caused shortages in manufacturing capacity and raw materials. As with wind power, it has also resulted in increasing prices and changes within the industry.
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From page 250... ...
in both PV prices and demand for manufacturers to increase their manufacturing capacities. PV manufacturing in the United States is dominated by First Solar of Arizona, which has responded to market demand by expanding manufacturing capacity in Ohio and Germany, and it has announced additional capacity expan sion in Malaysia (Prometheus Institute, 2007)
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From page 251... ...
Workforce Requirements Direct Requirements Another limiting variable to the large-scale manufacturing and deployment of new renewable electricity systems is the need for a trained and capable workforce that grows as market demand grows. Educating this workforce requires the develop ment of high-quality training infrastructures that include accredited institutions, skill testing, and certification.
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. However, the renewable energy sector faces a challenge in meeting an increasing demand for educated and skilled workers.
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, the sale of which provides additional value to the solar generation. Table 6.5 delineates selected occupations at a typical wind turbine manufacturing plant in Ohio, illustrating that the renewable energy sector employs a wide range of people at all levels of skills and education.
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Electricity from Renewable Resources TABLE 6.3 Direct Jobs in the Renewable Energy Sector in 2006 Revenues/Budget Industry Segment (billion $) Direct Jobs Wind 3.0 16,000 Photovoltaics 1.0 6,800 Solar thermal 0.1 800 Hydroelectric power 4.0 8,000 Geothermal 2.0 9,000 Biopower 17.0 66,000 Federal government 0.5 800 (including direct-support contractors)
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Used with permission of the American Solar Energy Society. Copyright 2007 ASES.
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From page 256... ...
• Green Energy Ohio. A partnership of the Great Lakes Renewable Energy Association and Florida Solar Energy Center, Green Energy Ohio has a 5-day Photovoltaic (PV)
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From page 257... ...
This legislation also establishes a grant program within the DOE's Office of Solar Energy Technologies to create and strengthen solar-industry workforce training and internship programs for installation, operation, and maintenance of solar-energy devices. To improve the workforce, there is a critical need to develop quality training programs that test and certify skill acquisition and capability.
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From page 258... ...
Large-scale integration of renew ables into the electricity system may require improved technologies to expand and upgrade the transmission and distribution system capabilities, and changes to utility and grid operations that can occur during system upgrades. This sec tion discusses the potential impacts on utility and grid operations associated with renewable electricity deployment.
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From page 259... ...
Because they are manufactured technologies, renewable energy generating systems can be constructed much more rapidly than can baseload fossil-fuel or nuclear plants. Dramatic expansion of the renewable electricity base in the United States implicates the need for improvement and expansion of the transmission grid.
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From page 260... ...
These benefits might be sufficient to offset some of the costs of building large-scale transmission systems in advance of generation inter connection demand, but further study is required. In Texas, rapid growth of the development of west Texas wind resources without a coordinated transmission development plan has led to curtailment of renewable electricity generation and system congestion.
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The benefits from an improved grid as discussed by the AEF T&D subgroup include economic, security, and environmental benefits, extending beyond additional needs for increased renewable electricity generation. Studies on the Integration of Renewables Numerous studies of the integration of renewables into the electric system have looked almost exclusively at integration of wind power, because wind is the intermittent renewable with generation capacity approaching levels where integration becomes important.
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. New York State conducted perhaps the most com prehensive domestic study to date to examine the potential impacts of integrat ing wind power equal to 10 percent of the state's estimated peak load for 2008 (NYSERDA, 2005)
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Similarly, Hawkins and Rothleder (2006) found that having wind generation spread into five separate geographical areas with different weather patterns and power production patterns improved the management of the wind power production in California.
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Two (or More) Renewable Electricity Generators In certain locations within the United States, two (or more)
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The last is particularly relevant if the resource is remotely located from the load centers, though it would have similar value for local wind resources. Several types of electricity storage used or under consideration for supplementing renewable electricity include pumped hydropower, compressed air energy storage (CAES)
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security, reduced health care • Energy security costs, enabling green building sector, economic development, education, and so on) Stakeholders • Customers • Manufacturers • Regulators (power, environmental)
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Basic Market Structure Renewable energy markets have some distinctive attributes compared to traditional electricity markets. Markets for renewable electricity can be viewed from two perspectives: distributed power production, where the electric power is generated and used on-site; and wholesale power production,8 where the electricity is sold and distributed to customers through the transmission and distribution grid.
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From page 268... ...
the ability of the third-party entity to raise capital at rates well below the IRR hurdle of the private companies. Other factors include the availability of federal and state incentives; the existence of a time-of-use utility tariff in which the utility's high-price rate tiers match well with the solar electricity output; and an exist ing market for renewable energy credits, which provides additional value.
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Retail Electricity Choice In relatively few jurisdictions, customers may choose their retail electricity supplier. Some of these suppliers offer renewable electricity options.2 Given the mechanics of electricity markets, these suppliers are typically selling a retail product comprised of generic system power combined with renewable energy credits.
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, all customers contribute indirectly to increasing the renewable electricity in the grid. The notion behind the RPS con cept is that customers acting together can procure more renewable energy at a lower individual cost than they would as individual retail purchasers.
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From page 271... ...
The large, interconnected nature of established industries, especially one as large as the electric service sec tor, also distributes risk broadly and efficiently through a well-developed value chain. Renewable electricity is only beginning to realize this kind of stability, and only in parts of the United States.
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From page 272... ...
Ultimately, renewable electricity will have to compete in this market environment, and investors and policy makers will assess the risks associated with the possible profit outcomes for renewable electricity business ventures against risks in other electricity sources, or in other investment opportunities in general. Perspectives of Risk by Public and Private Sector Investors Bringing increased renewable energy technologies to market requires public and private sector investment and commitment to overcome the various market barri ers.
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sets of industry investor • insights/ Macro market perspectives on energy applications Market competition expertise/ needs and trends • Perspectives on public policy and public • Specific market perspectives and trends for strengths good needs and trends, as well as the energy and other applications including potential for impact market beachhead, and entry strategies • Standards development • Ability to factor public policy impacts into investment and business formation decisions effectively • Investment collaborations must abide by • Investment collaborations should reduce Key constraints on governmental regulations including those the risk and improve the profitability of collaborations for fairness of opportunities, and not investments competing with the private sector • Commercialization viewed as responsibility of private sector • Collaborations that accelerate the • Access to the information, people, Key enablers needed deployment and use of the technology in knowledge, and data necessary for sound which the public sector invests investments • Entrepreneurs that are predisposed to, and/or already focused on, market/customer product and business development issues
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. Product Cost Evolution New products, including renewable energy technologies, experience high initial cost in the market.
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This trend can be an indicator of future decreases; however, the panel recog nizes the difficulty of achieving this goal. Other energy technologies have experi enced similar cost decreases, as shown in the slope of the cost reduction curve for the natural gas combustion turbine in Figure 6.9.
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. Diffusion Curve Technology deployment is a combination of market pull, where early stage con sumers create a demand for the technology, and scientific push, where the tech nology developer actively promotes the technology to the market.
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In addition, the shape of the diffusion curve varies by the characteristics of the technology and the local market, as shown in the diffusion curve in Figure 6.10. Diffusion Curve Laggards (16%)
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For clean energy technologies, this occurs during the transition from public sector financing to pri vate sector funding.
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A few examples of where growth in renewable electricity market penetration may conflict with the current rate structure and where regulatory risk associated with rates may be significant include: 11A government-approved contract rate.
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Any period of expansion in the amount of renewable electricity will therefore be accompanied by risk related to how the rate structure treats renewables. Policy and Regulatory Risk The relationships among markets to policy and regulation can be contributory, supportive, symbiotic, and parasitic.
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Renewable electricity will always be fundamentally affected by wider regulatory and policy conditions existing in electricity markets for several reasons. First, of course, is the ubiquity of electric service in the United States.
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Renewable energy industries should benefit greatly from comprehensive and effective regulation to reduce or avoid greenhouse gas emissions. Greenhouse gas regulation will likely affect the relative costs of renew able electricity and non-renewable fossil-fuel and nuclear power options and spur more rapid technology improvement in renewables.
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From page 283... ...
In addition to enhanced technological capabilities, adequate manufacturing capacity, predictable policy conditions, acceptable financial risks, and access to capital are all needed to greatly accelerate the deployment of renew able electricity. Improvements in the relative position of renewable electricity will
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Successful technology deployment in emerging energy sectors such as renew
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However, renewable energy requires a greater allocation of capital than do the conventional fossil-based energy technologies to manufacturing and infrastructure requirements. Integration of the intermittent characteristics of wind and solar power into the electricity system is critical for large-scale deployment of renewable electricity.
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From page 286... ...
renewable resources, such as wind and solar resources, which might on average interact synergistically with respect to their temporal patterns of power generation and needs for transmission capacity. Finally, it is important to note that the deployment needs and impacts from renewable electricity deployment are not evenly distributed regionally.
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From page 287... ...
Wind Power Installation, Cost, and Performance Trends. Office of Energy Efficiency and Renewable Energy.
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From page 288... ...
2007. Design and operation of power systems with large amounts of wind power: State-of-the-art report.
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From page 289... ...
2005. The Effects of Integrating Wind Power on Transmission System Planning, Reliability, and Operations: Report on Phase 2 -- System Performance Evaluation.
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From page 290... ...
2004. Wind Power Plant Behaviors: Analyses of Long-Term Wind Power Data.
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