Navigant Research Blog

Wind Energy Innovation: Vortex Generators

— July 15, 2014

The wind energy industry has doggedly pursued higher energy yields and lower costs of energy with each successive generation of wind turbines.  As a result, the wind energy industry has lowered its costs by over 40% in just the past 4 years.  Innovations in wind turbine design, materials, and the sub-component supply chain are continually yielding advances – sometimes from the smallest places.

The mature aerospace industry has provided many complementary solutions to the wind industry in terms of design, materials, manufacturing, and the operation of large rotors.  Among these is the relatively recent introduction of vortex generators (VGs).  These small, simple fins, usually less than 8 centimeters tall and wide, energize airflow directionally around a blade when applied in multiples and keep it from erratically scattering as it passes over the blade surface.

The image below, from LM Windpower, the largest global independent blade manufacturer, shows the difference in airflow over a blade during recent testing.  The benefits are most pronounced close to the thickest section of the blade, near the blade root.

(Source: LM Windpower)

Lower Speed, More Energy

Lessons learned long ago in aviation show that planes with wings equipped with VGs are able to reach slower speeds before stalling out, as the VGs helped increase lift on the wings.  Wind blades operate similarly to aircraft wings, in that wings capture passing wind to create loft for flight, and blades capture passing wind as loft for mechanical turning power of the rotor.  The effects proven in aviation are also more pronounced at lower air speeds, when wing flap angles are more aggressively angled toward the passing wind.

Similarly, the effects of VGs appear to increase the productivity of a wind turbine more during medium and low wind speeds versus high wind speed environments.  This is complementary to the fact that, in recent years, the majority of new turbines installed in the mature markets of North America and Europe are designed for lower wind speed environments.

No wind blades presently are manufactured with VGs attached out of the factory, but a robust retrofit business has evolved among some independent service providers (ISPs) to install VGs during blade maintenance and inspection.

UpWind Solutions, an ISP based in North America, says it has installed 22,000 VGs across multiple wind turbine models and found that assumptions around a General Electric (GE) 1.5 MW turbine, with a power purchase agreement of $50/MWh and operating at a 40% annual capacity factor, would see an increase in annual energy production (AEP) of around 2.2% and recoup the cost of VG installation in 20 months.

From the Factory, Soon

Siemens has discovered the value of VGs and other aerodynamic add-ons and has incorporated these into aftermarket power curve upgrade services, similar to UpWind’s applications.  In early 2014, Siemens added VGs as a retrofit upgrade to the existing 175 wind turbines at the 630 MW London Array offshore wind project.  Siemens says the aerodynamic upgrades will yield about a 1.5% increase in AEP.

Independent blade manufacturer LM Windpower also offers VGs as an add-on service to blades.  With ISPs, turbine vendors and blade manufacturers offering VGs as add-on aftermarket services, it’s only a matter of time before vendors begin offering VGs with their standard blade offerings.

After all, they are already standard offerings on your average mallard duck.

 

Ohio’s Freeze on Renewable Mandates Encourages Clean Energy Foes

— June 20, 2014

In an ominous first for renewable energy policy, Ohio Governor John Kasich signed a bill that freezes Ohio’s Alternative Energy Portfolio Standard (AEPS) and energy efficiency measures for 2 years.  The AEPS has been in place since 2008 and called for all investor-owned utilities to source 25% of their electricity from alternative sources, including 12.5% from renewables, by 2025.  These policies, which are more generally called renewable portfolio standards (RPSs), have been enacted in 29 states and Washington, D.C. and play a key role in driving demand for renewable energy.

Any policy that detracts from the status quo-entrenched fossil fuel interests is an attractive target.  RPS laws have been under sustained attack over the past few years, with no fewer than 15 attempts to scrap them at the state level.  The popularity and dropping cost of renewables have helped fend off these attacks, but this result in Ohio reflects the first time that opponents of renewables have succeeded in rolling back an RPS.  Enactment of the 2-year freeze is likely to be followed by a readjustment of the requirement downward, or the scrapping of it altogether.

There were some localized issues that propelled the attack.  A new generation of wind turbines optimized for lower wind speeds has allowed the expansion of wind energy from its traditional home in the more sparsely populated heartland to the more densely populated eastern Midwest markets like Ohio.  This led to increasing NIMBY (not in my backyard) and BANANA (build absolutely nothing anywhere near anyone) opposition.

Domino Effect?

Entrenched fossil fuel interests worried about competition fanned these flames.  And to be sure, the accompanying energy efficiency measures appeared to be a legitimate problem for large industrial users who were not given credit for improvements in process efficiency.  The energy efficiency issues, in fact, may have provided the most momentum behind the RPS attack.

But beyond the state-specific critiques, opposition to renewables comes from fossil fuel interests and conservatives who oppose any government support for alternative energy.  The Energy & Policy Institute has illuminated an increasingly orchestrated nationwide effort that includes the American Legislative Exchange Council (ALEC), with financial backing from the Koch brothers.  ALEC was reportedly active in helping gain support among state lawmakers in Ohio for pushing back against the renewable energy mandates.

Emboldened by victory in Ohio, attacks on state RPSs are likely to increase.   It will be hard to slow the clean energy momentum, though.  Renewables deployments have grown so fast in the United States (and globally) that analysis by Navigant Consulting director Bruce Hamilton shows that around 15 states with RPS mandates, or RPS goals, have already achieved 100% compliance in recent years and another 8 are at 75% to 99%.

Government support remains essential for the future of renewable energy in the United States – but the thousands of wind turbines and solar panels installed in recent years provide a strong foundation of fuel-free energy resources, and today’s increasingly popular and cost-competitive renewables will drive continued deployment whether politicians demand it or not.

 

U.S. Wind Market Buffeted by Boom-Bust Cycles

— May 28, 2014

The wind energy market in the United States operates in a boom and bust environment that, this year, once again, highlights the absurdity of U.S. policies around clean energy – or the lack thereof.  The Production Tax Credit (PTC) and its accompanying Investment Tax Credit (ITC) are the central pillars of government support for the U.S. wind market.  The PTC provides $0.23/kWh for 10 years from project commissioning, while the ITC provides a roughly equivalent cash grant.  Both credits are worth approximately 30% of the full installed cost of a wind plant, although the PTC is more valuable in areas of high wind speed (more kilowatt-hours relative to installed cost).

Both of these incentives are currently expired.  And yet, the wind industry is booming, with as much as 13 GW in various stages of construction in over 20 states and over 95 projects.  This is the result of the PTC being enacted on January 1, 2013, for 1 year.  Special safe harbor guidance from the Internal Revenue Service (IRS) allows for wind plants that began construction during the enacted PTC to qualify, as long as developers either began construction in 2013 – the physical work test – or spent at least 5% of the project capital costs.  Projects that went either route then have 2 years to come online in order to qualify for the PTC or ITC.

Time Running Short

In an ideal scenario, the 13 GW of construction reportedly underway may come online by the end of the 2-year window ending December 31, 2015.  Navigant Research forecasts around 12 GW of the 13 GW will come online, roughly split between 2014 and 2015.  A few items of uncertainty around this build cycle are in play.  Around 9 GW of power purchase agreements (PPAs) were signed during 2013 and through 1Q 2014.  PPAs, in almost all cases, are essential for wind plants in the United States to secure financing.  That’s not to say a further 3 GW to 4 GW of PPAs cannot be signed for this build cycle, but time is running out.

Time is also running out for turbine purchases, with top executives of major turbine vendors saying that only a few months remain to secure turbines for end-2015 installation.  They also worry that many developers that started construction, but did not put down payments on turbines by the end of 2013, may ultimately not secure PPAs, turbines, financing, or qualify under the IRS safe harbor stipulations during this build cycle.

Start Up, Again

Would that be a disaster?  Not necessarily.  If just over 9 GW is commissioned between 2014 and 2015, that still represents a healthy baseline of wind installation.  But it shows again the inefficiency of the U.S. system of stop-start development cycles, driven by the federal government’s inability to provide the wind industry long-term stability.  Most tax and other subsidy incentives for the fossil fuel sectors are written into permanent tax law and do not require contentious re-authorizations from a dysfunctional Congress every 1 or 2 years.

The PTC doesn’t have to exist forever.  Wind is increasingly competitive with new national gas plants in windy areas of the country.  But for now, the PTC needs to be extended to continue wind’s momentum.  In the longer term, the PTC should be reduced in value in exchange for a long-term multiyear phaseout when gas prices have recovered to realistic and sustainable cost levels.  Otherwise, the insane and inefficient boom and bust cycles will continue.

 

Big Business Buys into Big Wind

— May 23, 2014

Thirteen billion Snickers bars.  That’s how many chocolate treats can be produced annually from the wind power purchase agreement (PPA) that Snickers-maker Mars Inc. signed in late April that effectively underwrites a new 200 MW wind plant near Lamesa, Texas.

Mars thus joined a swelling chorus of big corporations that are investing in, and powering their businesses with, wind power.  Corporate purchases of renewable energy certificates (RECs) aren’t new.  But several tech-savvy firms are increasingly going beyond REC purchases and are opting for direct purchases of bulk wholesale renewable energy from individual wind plants and making equity investments in projects – effectively becoming new customers for wind plants beyond the traditional utility base.

Utilities have typically been the only customers that sign PPAs with wind plant developers and owners.  However, companies like Mars Inc., Google, Intel, Ikea, and Facebook (just to name a few) represent a new customer base for wind plant developers.  And these are not small, symbolic greenwashing pursuits.  These are real and substantial investments enabling the construction of significant new wind power plants.

Earth Day Deal

Google in particular has been on a wind buying spree.  Fittingly, on Earth Day, April 22, Google announced it had inked a deal with MidAmerican Energy to purchase 407 MW of wind power.  Unlike most utilities, which purchase wind power from independent power producers, the Iowa-based utility has strongly embraced wind by becoming a wind plant developer and owner itself.  With Google’s PPA in support, MidAmerican will build out its wind plant capacity by the end of 2015 and will sell the equivalent amount of power and bundled RECs to Google to partially power its data centers in Iowa.

This comes on the heels of Google signing PPAs totaling 101 MW in Sweden, 239.2 MW in Texas, 100.8 MW in Oklahoma, and 114 MW in Iowa, as well as the equity purchase of a 161 MW wind plant in Texas.  All told, the search engine giant has over 1 GW of wind PPAs in addition to equity investments.  None of these deals are behind the meter arrangements providing direct power, but these deals are structured in markets close to where Google operates its power-hungry data centers, thus ensuring that its investments are greening the electricity grid where the company operates facilities and that some proportion of the facilities’ consumption is produced from these local wind investments.

No Assembly Required

The Lamesa plant underwritten by Mars Inc.’s PPA is being developed in partnership with Sumitomo and BNB Renewable Energy, and is expected to go online by the end of 2015.  The expected 800,000 MWh of annual electricity generated by the facility is more than the Mars Inc. company’s annual electricity needs at its 37 U.S. factories and 70 workplaces.

Somewhere in those Mars Inc. offices, most likely, sits some furniture from Ikea.  The Swedish furniture giant also announced in April that it would purchase a 98 MW wind plant developed by Apex Clean Energy in Illinois.  No doubt, the equity investment is sweetened by the company’s appetite for tax credits, but it also offsets the equivalent of 165% of the electricity consumed by Ikea’s 38 stores in the United States.

Social media giant Facebook is not far behind.  In late 2013, Facebook announced a deal – also with MidAmerican Energy – to buy all the output from a 138 MW wind plant developed by RPM Access that would offset the energy needs of the company’s new data center under construction in Altoona, Iowa.

These deals demonstrate that large energy users are increasingly educating themselves on the role wind energy can play in their efforts to achieve a sustainable triple bottom line that balances social, environmental, and economic business needs.

 

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