Winds of time: Lessons from Utö in the Stockholm Archipelago, 1990–2001

When investigating the success or failure of different wind power projects, it is essential to take into account how they were historically situated. This study focuses on attempts to develop wind power in an archipelago setting, at Utö in Sweden. It has been argued that the development of Swedish wind power slowed during the 1990s; by revisiting the early days of wind power, looking at resistance and support, and connecting success factors, this can be further investigated.Whereas earlier research pointed out institutional conditions and site-specific conditions as crucial for successful wind power development and acceptance, the picture can be made more complete by discussing how wind power projects are affected by time-specific historical conditions. In the case of Utö, these can partly be associated with a newly launched political support program that gave the project political legitimacy and added a “pioneering spirit” to the endeavor. Conversely, when wind power is not seen as “pioneering” or “experimental” any more, but as a mere industrial activity, other incentives may need to be offered to municipalities.     

The rise of community wind power in Japan: Enhanced acceptance through social innovation

The purpose of this paper is to analyze the socio-economic dynamics that are brought about by renewable energy technologies. We call this dynamic “Social Innovation” as it changes the rules of risk–benefit distribution and the roles of social actors. For this purpose, we take up a typical case in Japan, community wind power in which the initial cost is funded by the investment of citizens. Through this case study, we examine how the citizens’ initiative can affect the social acceptance of renewable energy as well as social change. Based on interviews with those involved in these projects, we analyze the interests of the various actors involved in community wind power projects in a framework of “actor network theory”, which enables us to understand the detail of each actor's position. This study also involved a quantitative survey of investors. The case study clarified that there was a remarkable difference in the interests of the main actors in the community wind power projects, the networks are complex and actors share various interests such as economic interests and a sense of social commitment, participation and contribution. These incentives are also clarified in quantitative data. However, the variety of incentives differs in each project.     

Pricing offshore wind power

Offshore wind offers a very large clean power resource, but electricity from the first US offshore wind contracts is costlier than current regional wholesale electricity prices. To better understand the factors that drive these costs, we develop a pro-forma cash flow model to calculate two results: the levelized cost of energy, and the breakeven price required for financial viability. We then determine input values based on our analysis of capital markets and of 35 operating and planned projects in Europe, China, and the United States. The model is run for a range of inputs appropriate to US policies, electricity markets, and capital markets to assess how changes in policy incentives, project inputs, and financial structure affect the breakeven price of offshore wind power. The model and documentation are made publicly available.     

A comparative analysis of business structures suitable for farmer-owned wind power projects in the United States

For years, farmers in the United States have looked with envy on their European counterparts’ ability to profitably farm the wind through ownership of distributed, utility-scale wind projects. Only within the past few years, however, has farmer- or community-owned wind power development become a reality in the United States. The primary hurdle to this type of development in the United States has been devising and implementing suitable business and legal structures that enable such projects to take advantage of tax-based federal incentives for wind power. This article discusses the limitations of such incentives in supporting farmer- or community-owned wind projects, describes four ownership structures that potentially overcome such limitations, and finally conducts comparative financial analysis on those four structures, using as an example a hypothetical 1.5 MW farmer-owned project located in the state of Oregon. We find that material differences in the competitiveness of each structure do exist, but that choosing the best structure for a given project will largely depend on the conditions at hand; e.g., the ability of the farmer(s) to utilize tax credits, preference for individual versus “cooperative” ownership, and the state and utility service territory in which the project will be located.     

Small wind turbines: Can they live up to their potential in the US?

One of the few renewable energy options in which the US still plays a leadership role is small wind turbine technology in terms of technology development and market share, yet their contribution to the US’s total energy supply is miniscule. California and a few other states now offer incentives to customers installing small wind turbines, which is boosting interest in grid-connected applications. However, local governments still often present obstacles to customers because of their unfamiliarity with the technology. Peter Asmus reports.     

Wind power price trends in the United States: Struggling to remain competitive in the face of strong growth

The amount of wind power capacity being installed globally is surging, with the United States the world leader in terms of annual market share for three years running (2005–2007). The rapidly growing market for wind has been a double-edged sword, however, as the resulting supply-demand imbalance in wind turbines, along with the rising cost of materials and weakness in the US dollar, has put upward pressure on wind turbine costs, and ultimately, wind power prices. Two mitigating factors–reductions in the cost of equity provided to wind projects and improvements in project-level capacity factors–have helped to relieve some of the upward pressure on wind power prices over the last few years. Because neither of these two factors can be relied upon to further cushion the blow going forward, policymakers should recognize that continued financial support may be necessary to sustain the wind sector at its current pace of development, at least in the near term. Though this article emphasizes developments in the US market for wind power, those trends are similar to, and hold implications for, the worldwide wind power market.     

The role of taxation policy and incentives in wind-based distributed generation projects viability: Ontario case study

Taxation policy and incentives play a vital role in wind-based distributed generation projects viability. In this paper, a thorough techno-economical evaluation of wind-based distributed generation projects is conducted to investigate the effect of taxes and incentives in the economic viability of investments in this sector. This paper considers the effects of Provincial income taxes, capital cost allowance (CCA), property taxes, and wind power production Federal incentives. The case study is conducted for different wind turbines and wind speed scenarios. Given turbine and wind speed data, the Capacity Factor (CF) of each turbine and wind speed scenario was calculated. Net Present Value (NPV) and Internal Rate of Return (IRR) for different scenarios were then used to assess the project's viability considering Ontario Standard Offer Program (SOP) for wind power.     

Evaluation of methodologies for remunerating wind power's reliability in Colombia

Colombia strives to have enough firm capacity available to meet unexpected power shortages and peak demand; this is clear from mechanisms currently in place that provide monetary incentives (in the order of nearly US$ 14/MW h) to power producers that can guarantee electricity provision during scarcity periods. Yet, wind power in Colombia is not able to currently guarantee firm power because an accepted methodology to calculate its potential firm capacity does not exist. In this paper we argue that developing such methodology would provide an incentive to potential investors to enter into this low carbon technology. This paper analyzes three methodologies currently used in energy markets around the world to calculate firm wind energy capacity: PJM, NYISO, and Spain. These methodologies are initially selected due to their ability to accommodate to the Colombian energy regulations. The objective of this work is to determine which of these methodologies makes most sense from an investor's perspective, to ultimately shed light into developing a methodology to be used in Colombia. To this end, the authors developed a methodology consisting on the elaboration of a wind model using the Monte-Carlo simulation, based on known wind behaviour statistics of a region with adequate wind potential in Colombia. The simulation gives back random generation data, representing the resource's inherent variability and simulating the historical data required to evaluate the mentioned methodologies, thus achieving the technology's theoretical generation data. The document concludes that the evaluated methodologies are easy to implement and that these do not require historical data (important for Colombia, where there is almost no historical wind power data). It is also found that the Spanish methodology provides a higher Capacity Value (and therefore a higher return to investors). The financial assessment results show that it is crucial that these types of incentives exist to make viable wind projects in Colombia at US$ 2000/installed kW. With the absence of these incentives the Project's NPV would be negative before and after-taxes. Additionally, it is demonstrated that wind power projects would only be viable in Colombia if the price of CERs is at least US$ 20/CO₂e ton. Furthermore, it is concluded that income tax exemptions are not enough to encourage wind power development in Colombia.     

Social barriers in wind power implementation in The Netherlands: Perceptions of wind power entrepreneurs and local civil servants of institutional and social conditions in realizing wind power projects

The primary social factors for the implementation of wind energy projects in a liberalized market are entrepreneurs willing to invest. Understanding conditions that trigger entrepreneurs to invest in these projects, and understanding conditions that determine the chance of success for entrepreneurs to implement and exploit their projects, is vital for setting up effective policies to stimulate wind electricity generation. This paper analyses the way in which wind power entrepreneurs and local civil servants experience social and institutional conditions in the operational process of realizing wind power projects, and their perceptions of policy implications. A groups support system in an electronic board room was used to analyze the perceptions. From the analysis it was concluded that wind power entrepreneurs and civil servants share the opinion that the institutionally embedded power position of local politicians, and the sensitiveness of the local political debate for the popular opinion are most critical for project realization. With regard to the proposed solutions, both groups differ in their approach. Entrepreneurs stress procedural solutions, such as limiting the possibilities to appeal, reducing the complexity of the formal authorization trajectory and using a top down planning approach. Civil servants stress more strategic solutions, such as providing more public information on the necessity of wind power for local politicians and citizens, and community involvement in planning processes. Finally, the analysis explains that steering strategies that have been developed at the national level to solve the planning problems at the operational level do not address the right problems.     

Preliminary evaluation of the Section 1603 treasury grant program for renewable power projects in the United States

This article evaluates the first year of the Section 1603 Treasury cash grant program, which enables renewable power projects in the US to elect cash grants in lieu of the federal tax credits that are otherwise available. To date, the program has been heavily subscribed, particularly by wind power projects, which had received 86% of the nearly $2.6 billion in grants that had been disbursed as of March 1, 2010. As of that date, 6.2 GW of the 10 GW of new wind capacity installed in the US in 2009 had applied for grants in lieu of production tax credits. Roughly 2.4 GW of this wind capacity may not have otherwise been built in 2009 in the absence of the grant program; this 2.4 GW may have supported approximately 51,600 short-term full-time-equivalent (FTE) gross job-years in the US during the construction phase of these wind projects, and 3860 long-term FTE gross jobs during the operational phase. The program’s popularity stems from the significant economic value that it provides to renewable power projects, relative to the otherwise available tax credits. Although grants reward investment rather than efficient performance, this evaluation finds no evidence at this time of either widespread “gold-plating” or performance problems.     

Wind power technology diffusion analysis in selected states of India

The theory of diffusion of innovation is used to study the growth of wind power technology in different states of India. Though the policies of the central government of India encouraged growth of the wind power sectors, individual states had varying policy measures which influenced the rates of diffusion in wind energy in different states. The state level data of cumulative wind power installed capacity is used to obtain the diffusion parameters using a mixed influence diffusion model (Bass model). The diffusion parameters obtained, especially the point of time when an inflection occurs in the diffusion curve (t¹) and the rate of diffusion at the point of inflection (RPI) can be used to rank the different states. As different states have different policies for promotion of wind power, an attempt was also made to calculate a composite policy index based on parameters such as land availability, preferential tariffs, wheeling and banking, Third Party Sales (TPS) and state specific incentives. It is found that there is a correlation between the diffusion parameters and the composite policy index. This methodology can be used to study or even predict diffusion of renewable energy technologies in future.     

Wind farm investment risks under uncertain CDM benefit in China

China has set an ambitious target to increase its wind power capacity by 35 GW from 2007 to 2020. The country’s hunger for clean power provides great opportunities for wind energy investors. However, risks from China’s uncertain electricity market regulation and an uncertain energy policy framework, mainly due to uncertain Clean Development Mechanism (CDM) benefits, prevent foreign investors from investing in China’s wind energy. The objectives of this paper are to: (1) quantify wind energy investment risk premiums in an uncertain international energy policy context and (2) evaluate the impact of uncertain CDM benefits on the net present values of wind power projects. With four scenarios, this study simulates possible prices of certified emissions reductions (CERs) from wind power projects. Project net present values (NPVs) have been calculated. The project risk premiums are drawn from different and uncertain CER prices. Our key findings show that uncertain CDM benefits will significantly affect the project NPVs. This paper concludes that the Chinese government needs revising its tariff incentives, most likely by introducing fixed feed-in tariffs (FITs), and re-examining its CDM-granting policy and its wind project tax rates, to facilitate wind power development and enable China to achieve its wind energy target.     

Queuing Up

The interconnection queue is the mechanism for grouping and ordering prospective generation projects for evaluating impacts on the bulk system. These days, with record-setting installations of wind generation capacity in the United States, it is difficult to find an interconnection queue that does not contain at least some wind generation projects; in the areas of the country with good or better wind resources, there may be dozens of prospective projects awaiting study. The result has been a much broader exposure within the electric power engineering community to the technical issues and challenges associated with wind generation.     

The capacity credit of wind power: A theoretical analysis

A probabilistic model of capacity credit (or value) is constructed for wind power in an electricity grid, The model-which is initially based on the assumptions that electricity supply, electricity demand and the output of a system of aerogenerators are Normally distributed and that the conventional power plant in the grid comprises units of identical capacity—provides simple analytical expressions for four different concepts of capacity credit and elucidates the qualitative differences between them.Two of these concepts of wind power capacity credit, the “equivalent conventional capacity” and the “equivalent firm capacity”, are then studied in more detail by introducing a much more realistic probability distribution of wind power output than the Normal distribution and by calculating the Loss of Load Probability. For small penetrations of wind power into the grid, the capacity credit is approximately equal to the average wind power output, while for large penetrations the credit tends to a limit which is determined by the probability of zero wind power and the conventional plant characteristics.     

Solar and wind energy applications in Hawaii

The study on solar radiation and wind power applications is a facet of the total State of Hawaii solar assessment program. Engineering consultants, governmental authorities from the Department of Energy, State of Hawaii, and counties, technology assessments specialists, and buinessmen were contacter for input into this paper. The resultant late 1977 survey is a broad implementation plan highlighting seven typical applications—three solar, three wind and one combination.It was not the intention of this study to produce refined engineering/economic analyses. However a principal objective was to stimulate the development of solar energy by assisting in the first crucial steps of the planning process.This investigation selected projects which had potential for immediate implementation in the State of Hawaii. Variety in form of application, type of engineering analysis and location within the State was sought. To a large extent these basic premises were well met, as applications range from agriculture to aquaculture to tourism to education on three islands.In varying degrees, each project is recommended either for further study or immediate implementation. Some of the economics may be dubious, as would be the situation in most original applications. However, with appropriate governmental aid or incentives, these pilot projects could serve to improve economy of scale, spur associated developments, and in the long run, improve Hawaii's balance of trade.     

Can the future EU ETS support wind energy investments?

This article discusses how the future Emissions Trading Scheme legislation should be designed to allow the European Union to comply with the 20% CO₂ emissions reduction target, while at the same time promoting wind energy investments. We examine whether CO₂ prices could eventually replace the existing support schemes for wind and if they adequately capture its benefits. The analysis also looks at the effectiveness of the clean development and joint implementation mechanisms to trigger wind projects and technology transfer in developing countries. We find out that climate policy is unlikely to provide sufficient incentives to promote wind power, and that other policies should be used to internalise the societal benefits that accrue from deploying this technology: CO₂ prices can only reflect the beneficial impact of wind on climate change but not its contribution to the security of supply or employment creation. A minimum price of around €40/tCO₂ should be attained to maintain present support levels for wind and this excludes income risks and intermediation costs. Finally, CDM improves the return rate of wind energy projects in third countries, but it is the local institutional framework and the long-term stability of the CO₂ markets that matters the most.     

The predominance of economic development in the support for large-scale wind farms in the U.S. Great Plains

Wind energy is one of the fastest growing sources of power generation in the world. While general public and political support for wind energy is often high, siting wind farms frequently raises concerns in local communities, and individual projects often fail because of effective public opposition. This paper presents the results of a postal and online survey questionnaire that explores public perceptions of wind energy in two of the most important states for wind development, Texas and Iowa. The goal is a better understanding of public reactions to large-scale wind developments as a prerequisite of more widespread use of renewable energy resources. We found a high level of public support for wind energy, with more than two-thirds of respondents being in favor of building more wind farms either in their community or within the U.S. as a whole. Given that the majority of respondents had a very high level of concern for the general environment, we also found that almost two-thirds of respondents counter-intuitively indicated that producing electricity using fossil fuels is not detrimental to the environment, and that they had little concern for global climate change. Our results suggest that arguing for more renewable sources of energy based on reducing our carbon footprint is less persuasive in these communities than simply approaching it from the perspective of wind being a clean and safe source of energy. More than two-thirds of respondents felt their county had benefited economically from the wind farms and that they were a source of job creation in the county. Support for wind power in these communities is associated far more with socioeconomic factors than foundational aesthetic or moral values, with wind farms perceived as the vehicle that will reverse economic decline.     

State renewable energy tax incentives: monetary values,correlations, policy questions

Most states have enacted tax incentive programmes to accelerate renewable energy use independent of federal efforts. The monetary value of each state's incentives to purchasers of solar water, wind energy, or photovoltaic cell systems is calculated to compare state programmes. While the value of the incentives varies dramatically, the amounts appear unrelated to state energy and non-energy characteristics. The variations in state commitments and their independence from state energy conditions raise several policy questions that need to be addressed as the states assume the major role in renewable energy commercialization.     

Fostering a renewable energy technology industry: An international comparison of wind industry policy support mechanisms

This article examines the importance of national and sub-national policies in supporting the development of successful global wind turbine manufacturing companies. We explore the motivations behind establishing a local wind power industry, and the paths that different countries have taken to develop indigenous large wind turbine manufacturing industries within their borders. This is done through a cross-country comparison of the policy support mechanisms that have been employed to directly and indirectly promote wind technology manufacturing in 12 countries. We find that in many instances there is a clear relationship between a manufacturer's success in its home country market and its eventual success in the global wind power market. Whether new wind turbine manufacturing entrants are able to succeed will likely depend in part on the utilization of their turbines in their own domestic market, which in turn will be influenced by the annual size and stability of that market. Consequently, policies that support a sizable, stable market for wind power, in conjunction with policies that specifically provide incentives for wind power technology to be manufactured locally, are most likely to result in the establishment of an internationally competitive wind industry.     

Review of US ESCO industry market trends: an empirical analysis of project data

This comprehensive empirical analysis of US energy service company (ESCO) industry trends and performance employs two parallel analytical approaches: a survey of firms to estimate total industry size, and a database of ∼1500 ESCO projects, from which we report target markets and typical project characteristics, energy savings and customer economics. We estimate that industry investment for energy-efficiency related services reached US$2 billion in 2000 following a decade of strong growth. ESCO activity is concentrated in states with high economic activity and strong policy support. Typical projects save 150–200 MJ/m²/year and are cost-effective with median benefit/cost ratios of 1.6 and 2.1 for institutional and private sector projects. The median simple payback time (SPT) is 7 years among institutional customers; 3 years is typical in the private sector. Reliance on DSM incentives has decreased since 1995. Preliminary evidence suggests that state enabling policies have boosted the industry in medium-sized states. ESCOs have proven resilient in the face of restructuring and will probably shift toward selling “energy solutions”, with energy efficiency part of a package. We conclude that appropriate policy support—both financial and non-financial—can “jump-start” a viable private-sector energy-efficiency services industry that targets large institutional and commercial/industrial customers.