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Beyond Fossil Fuels: Leon Steinberg on Wind Power

The CEO of National Wind weighs in on the hurdles facing his industry
wind power, wind energy, renewable energy, alternative energy



LEON STEINBERG/NATIONAL WIND

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Editor's note: This Q&A is a part of a survey conducted by Scientific American of executives at companies engaged in developing and implementing non–fossil fuel energy technologies.

What technical obstacles currently most curtail the growth of wind power? What are the prospects for overcoming them in the near future and the longer-term?
One of the primary obstacles is balancing electrical generation, load, and storage over time, since wind energy is a variable power source. As more utility-scale wind energy projects are developed across the U.S., the number of wind turbines operating in a given area will increase. This has been shown to inherently reduce wind's aggregate production variability, making it more predictable and reliable. Experience has also shown that using well-functioning hour-ahead and day-ahead markets and expanding access to those markets are effective tools for dealing with wind's variability. A deep real-time market is the most economical approach to providing the balancing energy required by wind plants with variable outputs. However, some regions of the U.S. lack centralized markets, so we need to continually pursue ways to provide access to balancing and related services.

Unlike many traditional power sources, wind cannot be accessed on demand. Wind is an energy source, not a capacity resource. Capacity sources are made available on demand, to meet system peak loads. Incorporating wind energy into power system operation and planning requires new ways of thinking about energy sources. To date, no backup capacity for wind energy has been added. Because wind is an intermittent resource, it is used when it is available. Therefore, surplus wind energy can grow substantially during times that do not match customer use patterns. There is a strong need to find ways we can store this surplus energy. Two proposed off-peak electricity uses of this surplus energy are the deployment of plug-in hybrid vehicles with off-peak charging and production of hydrogen to power vehicles.

Another primary technical obstacle is the lack of transmission infrastructure to enable delivery and trade of energy resources efficiently. To utilize the considerable wind resources the U.S. has, a significant amount of new transmission will be required. Every era of the U.S. has been accompanied by construction of new transmission. The last era of significant construction occurred in the 1960s and 1970s. In fact, transmission investment has lagged substantially in the last two decades.

The Department of Energy (DOE) released a report last year called "20% Wind Energy by 2030," delineating how we as a nation can achieve 20 percent of our energy from wind by 2030. One key component was a significant investment in new transmission lines. The DOE proposed that 12,650 miles of 765-kilovolt (kV) lines need to be built to suffice the 20 percent by 2030 scenario. This amounts to an investment of $60 billion between now and 2030, as suggested by the National Renewable Energy Laboratory. This requires significant transmission planning, allocation of the costs of the new transmission investments, assurance of cost recovery, and siting of new transmission lines—all of which will take a good amount of time and effort.

Although it will be a challenge, we are confident that President Barack Obama will make headway in this area with his aggressive clean energy plan. We believe he will set our nation on the right path to reach the 20 percent wind by 2030 goal. As part of this plan, he wants to pursue a major investment in our national utility grid using smart metering, distributed storage, and other advanced technologies to accommodate 21st-century energy requirements. He also wants to deploy a "smart grid," which will utilize advanced technologies to manage peak load reductions, smart metering, distributed generation, and electricity storage systems.

Regional transmission-building plans are also in place. One such effort in our area is CapX2020, which is a joint initiative between 11 transmission-owning utilities in the Minnesota region to build four 230–345 kV transmission lines, connecting Minnesota, Wisconsin and the Dakotas. Although these types of efforts are beneficial for the short-term, it really is the proposed national transmission system that will take our installed wind capacity to the next level.

Are there obstacles to scaling up wind power to serve a larger national or global customer base?
The country's main wind resource is concentrated in the central Plains states of the U.S. This is the same area that is least served by good transmission resources. In order to deliver wind power from the areas with strong resources to areas with the largest population centers, we need a more robust transmission infrastructure.

Can the existing energy infrastructure handle growth in wind power? Or does that, too, need further modification?
The existing infrastructure cannot accommodate adding significant wind power to the current energy mix. The DOE's "superhighway" plan (as described in the reply to the first question) would provide the specific infrastructure needed. This involves building over 12,000 miles of new 765-kV transmission lines to meet wind energy project demands. An added benefit of a national transmission system is the geographic diversity it provides to wind generation. Wind is an intermittent resource. When you connect geographically intermittent resources, you can obtain a more sustainable resource.

Given the current economic crisis, can your industry get the necessary capital (from public or private sources) to adequately finance its growth?
Although none of the financing for our projects has been withdrawn, sourcing capital for new projects has been more challenging. Much of the financing of wind is based upon is based upon receiving the federal Production Tax Credit (PTC). When U.S. businesses are uncertain of their profitability, they have a reduced demand for tax credits. A refundable tax credit or grant program would help alleviate this issue.

From a strategic standpoint, which is the bigger competitor for wind: incumbent coal, oil and gas technologies or other alternative energy technologies?
Solar and geothermal will be the most competitive once the technology evolves to the point where they are more economical.

Is there a cost target that you and others in your industry are aiming to achieve in, say, five years?
We do see the capital cost of wind development start to decrease in the next five years. A single megawatt of wind energy today costs $2 million to $2.5 million to develop. The increased cost of steel and other components for wind turbines has led to this elevated price tag. We believe that as turbine manufacturing increases in the U.S., and as more sufficient transmission is available, along with advancements in turbine technology, the capital cost of wind development will be on a downward scale.

According the American Wind Energy Association, U.S.-based turbine manufacturing facilities have grown by over 20 percent since 2005. This resulted in 70 new or announced facilities in the past two years and 13,000 new jobs last year alone.

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