GE WIND 1.5 MW

Wind Turbines Continue to GrowLarger…Taller…More Productive

World Wide Growth

Plan Now for Coming yet Larger WTGs

A Typical Large Turbine has

Multiple Subsystems and Controls

Cost of Energy Trend

1979: 40 cents/kWh

• Increased Turbine Size

• R&D Advances

• Manufacturing Improvements

NSP 107 MW Lake Benton wind farm4 cents/kWh (unsubsidized)

2004: 3 - 5 cents/kWh

2000:4 - 6 cents/kWh

• Current Situation

– Wind viable at higherwind speed sites(Class 6 – avg. 15 mph @ 10m)

– Limited high wind sites

– Subsidies important

• New Focus Needed

– Shift to future industry needs

– Broaden range of competitive opportunities

– Eliminate the need for subsidies

Motivation for Low Wind Speed Technology R&D

2020

Wind Cost of Energy

0

2

4

6

8

10

12

1990

CO

E (

¢/kW

h [c

onst

ant 2

000

$])

Low wind speed sites

1995 2000 2005 2010 2015

Bulk Power Competitive Price Band

High wind speed sites

Acquiring Wind Least-Cost: Size Matters

Assuming the same wind speed of 8.08 M/S, a large wind farm is more economical

Cost of Energy -- Large Windfarm v. Small

$0.059

$0.036

$0.00

$0.02

$0.04

$0.06

$0.08

3 MW 51 MW

Cos

t of e

lect

rici

ty

Source: AWEA

The NIMBY Equation:“What’s in it for me”

Perceived Project Benefits

Perceived Project Detriment≥ 1

Perceived Detriments:

• Visual Impacts

• Noise

• Health and Public Safety

• Environmental

• Neighborhood Character

Perceived Benefits:

• Reduced Electric Bills

• Jobs

• Community Pride (Sustainability)

• Environmental

• Educational Curriculum Benefit

Getting a Building permit:“You want to put up a what?”

• Obtaining a Building Permit depends on local, county, state and federal regulations. Some, all, or none of the following may apply:

– Town or county zoning regulations– State coastal regulations

• Within the coastal zone– State Dept. of Environmental Management regulations

• Wetlands, or landfills• Wildlife Areas

– Local Historic District regulations– State historic or cultural resource commissions

• Designated historic area• Areas with archeological significance• Designated viewshed area

– Federal Land or National Historic Register designation– State building and electrical codes

California Distributed Generation (DG) Wind

• Pros– Most Economical Renewable Technology– Self Generation Incentive Program (SGIP)

• Incentive of $1,500 per kW (I MW maximum)• Total Project Size Increased to 5 MW

– Net Metering Law (1 MW)– High Electric Rates– “Progressive” State– Desert Heating Effect – Turbine Power Coincides with Peak

• Cons– Limited Number of Large Loads in Windy Locations– Only 2 Utility-Scale DG Wind Turbines installed to date. – Incentive Funds Administered by Utilities. Conflict of Interest.– Renewable Energy Credits (RECs) or “Green Tags” not yet

actively traded. REC’s “monetize” Environmental Benefits.

Simplifying Wind Resource Simplifying Wind Resource Assessments Assessments

Wind Resource Assessment Tools Becoming More Sophisticated

Energy Usage vs Turbine Production

2005 Plant Energy Usage (3,044,784 kWh/Yr)

Average of 347 kW / 465 HP

Predicted Turbine Production(2,000,000 kWh/Yr)

Average of 217 kW / 290 HP

66% of Electricity provided by

turbine

The environmental equivalent of:

Taking 90 cars off the road

Or

Planting 1,900 trees

Desert Heating Effect

“Accounting” (15 minute monthly basis) treatment in utility tariff does not reflect the underling reality (economics/statistics).

Benefits of Peak System Summer Load Reduction from Wind Turbine will go to Ratepayers & Utility NOT Elementis Specialties.

Annual Energy Production Wind vs. SolarEqual Installed Cost Basis

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

$280,000 $325,000 $600,000

Installed Cost after Incentive

An

nu

al E

ne

rgy

P

rod

uc

tio

n(k

Wh

/yr)

WindTurbineSystemSolar PVSystem

Payback Comparison Wind vs. SolarEqual Energy Production Basis

0.0

5.0

10.0

15.0

20.0

32,607 81,517 326,070

Annual Energy Production (kWh)

Pay

bac

k

Wind Turbine System

Solar PV System

SolarPowerPark

Geo-thermal

Roof Top &Industrial PV

SolarPowerPark

WindPowerPark

SolarPowerPark

SolarPowerPark

WindPowerPark

WindPowerPark

San Diego County Could Provide Sites For Solar & Wind Power Parks,Where Environmental Assessment, Permits, Power Lines & Water are

Pre-arranged For All Solar Power Plant Developers

SolarPowerPark

The Iowa Stored Energy Plant (ISEP)

3 Proven Technologies3 Proven Technologies

1. Renewable wind energy

2. Aquifer storage of gas

3. Combustion turbine

CAES drive train (Dresser Rand)

Motor/Generator and Combustion

Turbine

---------

Motor/Generator and Compressor

Train

The Alabama CAES plant

CAES Plant at AEPCAES Plant at AEP

Alabama Electric

Cooperative

McIntosh Power Plant

Aerial View

Electric Power Substation at CAES

Power Plant

CAES Power Plant

Operation During Energy Storage or Compression PhaseWind Generation Used to Compress Air

No Extra Grid Power Used

TAW 7/18/2002

Power Flow

Air Flow

Local Wind Farm

Underground AquiferCompressed Air Storage

50 MW

50 MW

0 MW

San Diego Wind Resource

Wind HarvestVertical Axis Wind Turbines

George Wagner (415) 663-8565

Wind Harvest’s turbines located in Palm Springs.

Maintaining Turbine Performance Artificial Rain

Sky WindPower Dave Shepard - 619 265-

3434

Recycled Energy

In 2004 this plant generated more clean power than we estimate was produced by all of the solar collectors throughout the world

Recycled Energy• What is Recycled Energy?

– Distributed Generation– Recovering heat or pressure energy from a process

• Proven Technology. 9,900 megawatts in operation in US. Equivalent of 10 large nuclear plants. This is 10% of the potential predicted by the EPA

• Recycling waste energy could have produced about 20% of the US electricity in 2003. This would have displaced about 25% of the fuel that was used to generate electricity

WHY ARE WE NOT DOING THIS?

• Conventional central generation plants dump 2/3 of their energy into lakes, rivers and cooling towers while factories and commercial facilities burn more fuel to produce the heat just thrown away.

How did we get here?

• Unquestioned belief that central generation is optimal

• Protected from competition and rewarded by obsolete rules the power industry continues to ignore opportunities to recycle energy.

• “The power industry consistently made sub-optimal choices over the past three decades.”

WHAT CAN BE DONE?

“The best electric-only technology now converts more than 50 percent of the

fuel to power, but the industry’s average efficiency has not improved in

forty-three years. No other industry wastes two-thirds of its raw material;

no other industry has stagnant efficiency; no other industry gets less

productivity per unit output in 2004 than it did in 1904.”

Source: Tom Casten – Critical Thinking About Energy

Regulated Monopoly Utilities

Source: Tom Casten – Critical Thinking About Energy

Regulated Monopoly Utilities

Source: Tom Casten – Critical Thinking About Energy

Monopoly Efficiency Gap

• 5,242 generation plants were evaluated to compare plants built under monopoly protection vs Independent Power Producers to determine if optimal decisions had been made.

Central Generation vs Distributed GenerationRegulated Monopoly vs Private Sector

Recommended Actions

1. Comprehensive Reform – ERRATA (Energy Regulatory Reform and Tax Act)

2. National Fossil Fuel Efficiency Standard– Give an allowance for incremental fossil fuel.

Start with national average from last year– Force all generators to purchase adequate

allowances of shut them down.– Reduce the fossil fuel allowances each year.

Conclusion of Tom Casten and Brennan Downes Study

• The Distributed Generation Case saves $5 Trillion of capital investment

• Reduces power cost by 40%

• Cuts greenhouse gas emissions in half.

Do we need Mandatory Requirements from the Government?

Should government pass standards to make buildings earthquake-proof or should we just assume that the market will build them for the next earthquake

Obstacles to Change

• Entrenchment of the “Utility Regulatory Complex”

• Lack of understanding of the issues. This can seem overly complex but it is Economics 101

• Fringe Elements of the “Environmental Movement” with the Following Traits– Purists with Extreme/Inflexible Views– Anti-globalists, Anti-capitalists.

You get what you reward!

“The best electric-only technology now converts more than 50 percent of the

fuel to power, but the industry’s average efficiency has not improved in

forty-three years. No other industry wastes two-thirds of its raw material;

no other industry has stagnant efficiency; no other industry gets less

productivity per unit output in 2004 than it did in 1904.”

Source: Tom Casten – Critical Thinking About Energy

Regulated Monopoly Utilities

Source: Tom Casten – Critical Thinking About Energy

Monopoly Efficiency Gap