So What Is a Megawatt?

A standard rule of thumb is that one (1) MW provides enough power to supply approximately 1000 homes.  Some commercial consumers have extremely high consumption rates.  The Sheraton Hotel in downtown Seattle uses 4 MW continuously.   According to the 2000 US Census, there are just over 115,000,000 homes in the United States.  And according to federal studies, there is enough wind in the United States to meet more than twice the nation’s total electricity demand.   Tapping low wind speed sites alone (Class 4 sites) would add 45,000 MW to the available wind capacity in the United States.

Current Limitations

Available Cranes and Road Restrictions

The larger the wind turbine, the higher it needs to go so it can cover its swept area without hitting the ground.  And having large wind turbines with large power outputs means that fewer turbines have to be installed in order to reach a desired power output for a particular wind farm. 

The United States imposes many restrictions on the use of the national highway system that include height and oversized load constraints.  The general height restriction is 16 feet (4.83 meters).  Oversized loads restrictions are state specific and can also be date and time specific.

An extensive report on transportation and erection logistics concluded that transportation limitations and costs can have a large impact on the overall cost of a wind turbine project.  In order to ensure cost-effective transportation, involved parties should strive to keep turbine component sizes within the limits of the established tractor-trailer industry’s height and weight capabilities in order to avoid the need for premium priced, specialized equipment.

Crane limitations will continue to pose a problem because of the inherent conflict between the need for turbines to be elevated at great heights and the inability to erect wind turbines without the use of cranes.  A potential remedy for this problem that is currently being researched is the idea of a self-erecting telescoping tower that would use interior hydraulic lifts.   Another possibility being explored is the use of a material other than steel in the tower construction.  But lighter weight materials, such as some type of composite, need more research and development to prove their effectiveness and safety.

Transmission Lines

Transmission lines play a mixed role in the production and distribution of wind energy.  Because of wind’s currently small contribution to the energy consumption in the United States, transmission capacity is not of huge concern.  However, Montana, for instance, has great wind resources but no demand for the extra electricity or the necessary transmission capability to export the power.  So if wind is to be developed to its full potential, additional transmission lines will be required.

On the other hand, lack of capacity in existing transmission lines does worry some.  The National Grid is a power transmission and distribution company that owns and operates 84,000 miles of transmission lines in New England.  The company is improving the efficiency of its transmission lines by using precise instrumentation to reduce load losses.  One could argue that improved transmissions lines with fewer losses could recover thousands of “lost” megawatts thus negating the need for new power generation whether it be wind or fossil fuel energy.  But the flip side to that argument is that the grid system across the whole United States is not connected.  Recovering lost power in one region doesn’t mean that another region will benefit.

Another issue is the denial of access to transmission lines and discrimination in rates given to wind power producers by transmission companies.  The American Wind Energy Association has been lobbying the Federal Energy Regulatory Commission (FERC) to eliminate the unfairness of the current system that favors traditional fossil fuel power generation with its related tariffs.

Ultimately, the biggest current concern for wind power is the location of transmission lines in relation to a potential wind farm site.  Having a site with excellent wind resources that is also located near a transmission line is the ultimate goal of wind project developers.  For this reason, some large scale wind farms have been located next to major hydroelectric facilities so that they can share the transmission facilities that have already been built for the hydropower plants.

Capacity Factors

Critics of wind energy point to the intermittency of wind as a detracting factor.  Power from the wind can only be generated when the wind blows.  Wind can be reliable on a yearly average basis, having a capacity factor of up to 35%.   This means that a wind turbine, on average, produces up to 35% of its rated potential.  Wind can therefore be a reliable part of a utility’s power portfolio.

Current Technology

Overview

Wind turbines are becoming larger, cheaper, and more efficient therefore making wind power more cost competitive.  As the size of turbines increase, the installed cost of a wind farm decreases. The three-blade wind turbine design is proven technology and companies such as Vestas have been building them successfully since 1979.

GE Wind has become a new television advertisement campaign to promote wind energy and GE Wind in particular.  The cost of a GE 1.5SL wind turbine is $XXX (I’ll call my friend at GE on Tuesday).

Developing a wind farm involves many different costs.  These costs include purchasing the land, permitting the land for a wind farm, obtaining an interconnect agreement with the nearby transmission line, purchasing the turbines, and erecting the turbines.  After that, there are maintenance and operation costs handled by the owner over the twenty year life of the wind farm.  FPL Energy estimates that their cost to develop Phase I of the Stateline Wind Project was $XXX which includes x, y, and z (I don’t know if I’ll be able to get this or not) while Phase II cost $XX. 

General Electric (GE) Wind is currently the only large scale wind turbine manufacturer in the United States.  It manufactures a 1.5 MW turbine, which has quickly become the industry’s standard size.  It is also in the process of developing a 3.6 MW turbine.

GE Wind’s history is interesting in that it explains how the current 3-blade turbine technology is almost completely derived from the Vestas design.  Zond Wind Energy Corporation was formed with former Vestas employees who proceeded to design turbines similar to their former employer’s.  Zond was purchased by Enron Wind in 1997.  Enron Wind was in turn purchased by GE Wind in 2002.

Even with this shared history, manufacturers are finding ways to differentiate their turbines.  The following table compares some of the leading turbines to the WTC’s design:

While bigger turbines are a sign of technological success in the wind industry, they do have their limitations.  Most large turbines are destined for off-shore usage and high speed wind sites.  This leaves a lot of land with moderate wind resources still available.

Low Speed Wind Turbines

Low wind speed is defined as a Class 4 wind at 5.8 meters/second at an elevation of 10 meters.  Class 4 winds cover the Midwestern Great Plains and can also be found along coastal areas.  Wind classes range from one (1) to seven (7) with 7 being the fastest at about 8.8 or more meters/second at 10 meters.  Appendix C presents a wind resource map of the United States to demonstrate the class ratings.

Class 5 and 6 sites are not abundant.  Many have already been developed, are too inaccessible for development, such as in rugged mountain passes, or are too remote to have access to transmission lines.  Class 4 sites are plentiful and are also generally near load centers, such as big cities.  There are 20 times more Class 4 wind sites than Class 6 sites.

Developers already recognize that certain turbines work better in certain areas compared to others.  Matching particular turbines to wind resources is another step in the progress of wind turbine technology as demonstrated by the National Renewable Energy Laboratory’s (NREL) current research of low speed wind turbines.

NREL’s goal in supporting the development of wind turbines better suited for low wind speeds is to make wind energy produced at low wind speed sites (Class 4) cost competitive by bringing the cost down from 5.5¢/kW-hr to 3¢/kW-hr.

As the wind turbine technology matures, the natural evolution is to make resource-specific turbines.  Most turbines manufactured today are designed for high wind speeds and include the necessary design margins to function in high winds and the large generators to capture the power available in high winds.  A turbine designed and rated for a high wind speed but placed in a low wind speed site will work, but the full capacity of the turbine generator will not be reached and therefore is operating inefficiently.  Also, the costly design margins in the turbine may not be necessary for a low wind speed site making the turbine less cost effective.

To make a turbine that operates more effectively in a low wind speed site will in turn enable low wind speed wind power to be more cost competitive.  As described below, the WTC’s turbine can do just that.

Current Research and Development

The Wind Turbine Company of Bellevue, Washington has been working on the design of a two-blade, downwind wind turbine since the company’s inception in 1989.  While two-bladed and downwind designs are not new concepts, the Wind Turbine Company’s combination of the two-blade, downwind design with a hinged rotor (flapping) design has prompted the company to claim its design can cut the cost of manufacturing a wind turbine by 30% and lower the cost of producing wind energy to 3.5¢/kW-hr.

The inherent technology problem for wind turbines is controlling the out of plane bending moments caused by the wind interacting with the turbine’s blades.  These moments cause stress, strain, and drag on the turbine and therefore a turbine’s design must include supports, materials, and allowances to counter these forces.  With the Wind Turbine Company’s hinged rotor design, the blades can flex and move independently of each other thus reducing the load on the turbine caused by the out of plane forces.

This reduction in load translates into a cost reduction because design allowances (extra or stronger materials) included to counter the loads can be eliminated.  In addition, the removal of the third blade and yaw drive, which is not needed in a downwind design, also reduces the cost.

The Wind Turbine Company’s current design has a rated capacity of 750 kW.  With a rotor diameter to 60 meters, the swept area of the turbine is increased.  Large swept areas are particularly important for low wind speed sites because they help to capture more energy.  The WTC’s turbine is not intended to be used in a high wind site, but is better suited for a moderate wind resource site.  Its large swept area and medium sized generator will make it an effective turbine in a Class 4 wind site.

As with any new technology, there is risk involved, especially for an early adopter.  The biggest obstacle in bringing the turbine to the market is that the Wind Turbine Company must overcome reliability concerns that are intrinsic to new technology.  Acquiring a lead customer for the technology would drastically improve the Wind Turbine Company’s ability to commercially deploy its turbine. 

Competition

Competition for the wind turbine market derives from three sources.  First, other technologies that produce electrical power like coal or hydroelectricity compete with wind power to win the right to supply electricity for the growing needs of the world’s economy.  Second, competition exists within the wind industry itself, between contending developers, manufacturers and secondary businesses from fields like data acquisition and consulting.  Lastly, indirect competition from transmission line technologies and other industries continue to threaten the growth of the wind industry.

JOSH - Gretchen asked, how much of the market share do the top 5 have? Who has distribution channels in place? Think about criteria to compare the companies so we can pick which one we would recommend WTC goes after as a partner? What are the things that are important to know?

The Wind Industry

In addition to competition amongst the energy technologies, wind turbine companies compete in countries across the globe.  The main competition in each country usually lies between either manufacturers or developers.

Utilities initiate the wind projects due to desires for an diversified energy portfolio or due to local and national government policies.  If the utilities want to reduce risk, they contract out with a developer and buy wind power for, hypothetically speaking, 5 cents/kWh from the developer.  This transfers the risk of picking a site, hiring a construction crew, picking a wind turbine manufacturer, etc. to the developer.

Often utilities believe they can produce wind power for less than the developer’s rate.  If the difference between what the utility believes it can produce the wind power for and the developer’s rate is large enough to validate the risk, the utility company will instead build and maintain the plant themselves.  In this case, the wind turbine manufacturers vie for the contract with the utility, which creates the competitive rivalries.

Due to the wind power industry establishing wind as a reliable energy source in Europe, utilities take on most of the projects there because of the lower risk.   Thus, in Europe, the manufacturing of wind turbines becomes the most competitive market.  In contrast, most American utilities believe taking on a wind project carries much risk.  The developers, in turn, become the competitive wind industry entities in the U.S.

Other secondary wind industries serve utilities, manufacturers and developers.  Some examples include consulting and data acquisition firms.  Although the secondary industries do not compete as strongly, competition does exist at every level of the wind turbine industry.

Focusing in on Wind Turbine Manufacturers

A Danish consulting company, BTM Consult ApS, releases a report on the world wind industry each year .  The report states that the largest ten wind turbine manufacturers supplied 95% of all the wind turbines installed in 2002.  Seven of these top ten manufacturers increased their market share last year as well.

These numbers allude to a consolidation of wind turbine manufacturers.  Due to the advantages of economies of scale such as lower manufacturing costs and worldwide sales and support networks, the larger wind turbine manufacturers find the most success in the world market.

Twenty-five companies produce wind turbines in the world, reports BTM.  The top five manufacturers in order are: Vestas from Denmark, Enercon from Germany, NEG Micon from Denmark, Gamesa from Spain and GE Wind Energy from the U.S.