- Wind currently provides about 2.3 percent of America’s electricity.
- Wind power was 26 percent of all U.S. electricity generation capacity added in 2010.
- The U.S. Department of Energy found that generating 20 percent of U.S. electricity from wind by 2030 would avoid 825 million metric tons of carbon dioxide (CO2) in 2030, a 25 percent reduction relative to a no-new-wind scenario.
- The levelized cost of electricity generation (including tax incentives) from a new wind farm can range from around 6-11 cents per kilowatt-hour (kWh). Actual costs for wind power projects will vary depending on project specifics, and the cost of wind power is sensitive to tax incentives.
Wind power harnesses the energy generated by the movement of air in the earth’s atmosphere to drive electricity-generating turbines. Although humans have used wind power for hundreds of years, modern turbines reflect significant technological advances over early windmills and even over turbines from just ten or twenty years ago.
Wind resource potential varies significantly across the United States with substantial resources found in the Midwest and along the coasts (see Figure 1).
Winds generally blow more consistently and at higher speeds at greater heights. As wind speed increases, the amount of available energy increases following a cubic function, so a 10 percent increase in speed corresponds to a 33 percent increase in the amount of available energy. Modern turbines continue to grow larger and more efficient--two important factors that allow a single turbine to produce more usable energy. Improved materials and design have allowed for larger rotor blades and overall improvements in efficiency (measured as total energy production per unit of swept rotor area, given in kilowatt-hours per square meter) and greater gross generation.
Figure 1: Wind resource potential at 50 meters (164 feet) above ground
Wind technologies come in a variety of sizes (larger turbines can generally produce more electricity), and styles. Since wind is a variable and uncertain resource, wind turbines tend to have lower capacity factors than conventional power plants that provide most of the nation’s energy. A power plant’s “capacity factor” provides a measure of its productivity by comparing its actual power production over a given period of time with the amount of power the plant would have produced had it run at full capacity over that period. Conventional coal- and gas-fired power plants generally have capacity factors between 40% to 60%., Wind turbines generally have capacity factors that are closer to 25 to 40 percent. Wind turbine capacity factors have improved over time with advances in technology and better siting, but capacity factors are fundamentally limited by how much the wind blows.
Technologies to harness wind power can be classified into a number of broad categories:
Offshore wind technology has yet to reach full commercial scale and remains a relatively expensive technology. Even so, projects do exist and more are planned. Offshore wind installations could take advantage of higher sustained wind speeds at sea to increase electricity output by 50 percent compared to onshore wind farms.
- Onshore, utility-scale turbines
A modern utility-scale wind turbine generally has three blades, sweeps a diameter of about 80-100 meters, and is installed as part of a larger wind farm of between 30 and 150 turbines. An individual wind turbine can have a generation capacity of up to 3.0 megawatts (MW).
The National Renewable Energy Laboratory defines “small wind” as projects that are less than or equal to 100 kilowatts, which are much smaller than utility-scale turbines. These systems provide power directly to private residential properties and farms, businesses, industrial facilities, and schools. Small turbines can be utility grid connected or coupled with diesel generators, batteries, and other distributed energy sources for remote use where there is no access to the grid.
As of 2011, are 27 domestic small wind manufacturers operating in the United States. In the past 5 years, there has been a trend towards installing grid-connected small wind turbines with greater capacity. For example, sales of turbines smaller than 1 kW capacity were stable or declined from 2006 – 2011, while sales of 1 – 10 kW and 11 – 100 kW grew four and five-fold, respectively. While capacity additions were steadily increasing each year from 2005 to 2010, there was a 26 percent decline in 2011 from the previous year, returning to 2009 levels of capacity sales. The brief decline has been attributed to a downturn in the general U.S. economy as well as inconsistent state policies, with several states suspending programs in 2011. In 2011, domestic sales of small wind reached 33 MW – a 13 percent increase over 2010.
Small wind’s growth trend is likely the result of an assortment of state policies, with 2011 reporting over $38 million in tax credits, rebates, grants, and low-interest loans – a 27 percent increase from 2010. 35 states offered some form of rebates, tax credits, or grants for renewable energy sources that could be applied to small wind, including the New York State Energy Research and Development Authority (NYSERDA). While only three states have a specific incentive policy for small wind, including Oregon’s Small Wind Incentive Program, more than 25 states offered cash incentives and grants that covered small wind investments. 16 states offered state-wide net-metering, which encourages investment by providing compensation when offsite electricity production exceeds private usage and enters the grid. Finally, 38 states and the District of Columbia have some form of policy that requires a certain percentage of electricity to be from renewable sources, called a Renewable Portfolio Standard (RPS). Many states, including Pennsylvania, allow for distributed energy contributions to RPS fulfillment.
Additional federal government programs contribute to the growth of small wind capacity. In the Wind for Schools program, the Department of Energy funded 33 small wind turbines on educational buildings in 2011. Moreover, a 30 percent Investment Tax Credit for small wind turbines (in effect until December 31, 2016) remained important in 2011, while the U.S. Department of Agriculture provided support to over 200 small wind installations in 30 states, totaling 5.8 megawatts (MW) through the Rural Energy for America Program (REAP).
Table 1. Annual Sales of Small Wind Turbines (? 100 kW) in the United States
Number of Turbines
Source: EERE, http://www1.eere.energy.gov/wind/pdfs/2011_wind_technologies_market_report.pdf
Environmental Benefit / Emission Reduction Potential
Wind power generates almost no net greenhouse gas emissions. Although electricity generation from wind energy produces no greenhouse gas emissions, the manufacture and transport of turbines produces a small amount. Compared to conventional fossil fuel sources, wind energy also avoids a variety of environmental impacts, such as those pertaining to mining, drilling, and air and water pollutants.
- Emissions reduction potential in the United States
The U.S. Department of Energy found that generating 20 percent of U.S. electricity from wind by 2030 would avoid 825 million metric tons of carbon dioxide (CO2) annually in 2030, a 25 percent reduction relative to a no-new-wind scenario. This also represents a cumulative CO2 emissions reduction of more than 7,600 million metric tons by 2030.
- Emissions reduction potential globally
The International Energy Agency’s aggressive technology scenario for reducing GHG emissions included a significant role for wind power—i.e., 1.5 to 4.8 gigatons of annual GHG abatement compared to “business-as-usual,” or 4 percent of total abatement from energy use, and about 12 percent of global electricity production in 2050.
The cost of wind power has fallen significantly over the past few decades. In 1981, the cost of generating electricity from a 50-kW capacity wind turbine was around 40 cents per kWh. Technological and efficiency improvements (such as longer and stronger turbine blades from new advanced materials and designs) allow today’s turbines to produce 30 times as much power at a much lower cost. Technological improvements have the potential to further drive down costs over time.
Wind is cost-competitive with traditional power generation technologies in some U.S. regions. Recent analyses estimate the levelized cost of electricity generation from a new wind power project to be 6-11 cents per kWh. These costs, however, depend on project specifics (such as the wind turbines’ capacity factor) and are sensitive to the inclusion of tax incentives for wind power. For example, the Federal Production Tax Credit for wind power lowers the levelized cost of electricity generation from wind by roughly 2 cents per kWh. Recent estimates for the levelized cost of electricity generation from new coal-fueled generation run from 6.4 cents per kWh to 9.5 cents per kWh., Similar estimates for the levelized cost of electricity from a natural gas combined cycle plant are in the range of 6.9 to 9.6 cents per kWh.
At present, offshore wind turbines are approximately 50 percent more expensive than onshore installations, yet they produce about 50 percent more electricity due to higher wind speeds.
Current Status of Wind
Wind capacity is growing fast and accounts for the largest share of added renewable energy capacity over the last several years. Cumulative global wind capacity has grown at approximately 26 percent per year since 2003.
- Wind in the United States
Wind currently provides about 2.3 percent of America’s electricity, but this relative share is growing quickly. Twenty-six percent of all electricity generation capacity added in the United States in 2010 was wind power, while it accounted for 39 percent in 2009. The amount of electricity generated from wind in the United States increased by 61 percent between 2007 and 2008 and by 28 percent between 2008 and 2009. In 2010, United States dropped to second globally in terms of installed wind power capacity (40.2 gigawatts (GW)) after China more than tripled its installed capacity since 2008 (12 GW to 44.7 GW by the end of 2010).
In February 2011, the Departments of Energy and the Interior released A National Offshore Wind Strategy: Creating an Offshore Wind Industry in the United States, calling for the deployment of 54 GW of offshore wind capacity by 2030, with 10 GW of offshore wind capacity by 2020 as an interim target. Offshore wind projects in Massachusetts and New Jersey could begin construction in 2011, and several other coastal states are in the process of approving possible projects.
Since 1996, global installed wind power capacity has grown by a factor of 32, reaching 197.0 GW in 2010, which could meet approximately 2.5 percent of global electricity demand in 2010. The United States accounts for about 20.4 percent of installed global wind power capacity.
Even assuming no new policy interventions – such as renewable portfolio standards or carbon emissions constraints – wind will continue to grow quickly, with installed capacity expected to quintuple in size by 2035. Though some projections estimate it could account for as little as 5 percent of global electricity production in 2035, this share could be as high as 13 percent if policies are put in place to aggressively reduce greenhouse gas emissions and spur technological developments in renewable energy.
A number of offshore wind farms are currently in operation or development globally. The United Kingdom has the world’s largest offshore capacity (1,341 MW), followed by Denmark (854 MW). Additional offshore wind projects in Europe and China began electricity generation in 2010. The London Array, the world’s largest offshore development, is expected to have a capacity of 1,000 MW.
Obstacles to Further Development or Deployment of Wind
A number of factors pose barriers to the further development of wind resources.
- Variability and uncertainty
Wind power is inherently variable and uncertain due to weather factors, since winds vary in strength and sometimes do not blow at all. Wind power is uncertain insofar as wind speeds can be forecast with only limited accuracy. These issues can be overcome to some extent by developing better wind forecasting methods and addressing electricity grid interconnection issues between regions. The U.S. DOE estimates that the U.S. could generate 20 percent of its electricity from wind without any new energy storage. To achieve even higher levels of generation, wind power will require enabling technologies such as energy storage and demand-response. Storage options for wind energy include pumped hydroelectric storage, compressed air energy storage, hydrogen, and batteries.
- Geographic distribution and transmission
Wind resources are unevenly distributed and many of the best wind resources are located far from the population centers that require electricity. New transmission infrastructure is necessary to bring electricity generated by wind resources in remote areas to end users.
Related to issues over geographic distribution of wind resources, siting of wind power projects can face opposition from local communities who see wind farms as a form of visual pollution that spoils views and property or have concerns about the potential impacts of the wind farm on wildlife (especially birds and bats) and habitat.
Recent wind power growth rates in the United States have been volatile – largely driven by the cycle of lapses and reinstatements of tax policy support, namely the Federal Production Tax Credit. Such uncertainty hurts investment in wind power projects.
Policy Options to Help Promote Wind
A price on carbon would raise the cost of electricity produced from fossil fuels, making wind power more cost-competitive.
- Tax credits and other subsidies
Stabilizing Federal Production Tax Credit cycles can help sustain investment and growth in wind power (for example, by putting into place incentive programs with longer periods before required Congressional renewal). Other forms of assistance include grant programs and loan guarantees to wind power project developers.
- Renewable portfolio standards
A renewable portfolio standard (RPS), sometimes called a renewable or alternative energy standard, requires that a certain amount or percentage of a utility’s power plant capacity or generation come from renewable sources by a given date. At present, 29 U.S. states and the District of Columbia have adopted an RPS, while 8 U.S. states have renewable portfolio goals. RPSs encourage investment in new renewable generation and can guarantee a market for this generation. States and jurisdictions can further encourage investment in specific resources, such as wind power, by including a “carve-out” or set-aside in an RPS, as is the case in Illinois, Minnesota, and New Mexico.
- Development of new transmission infrastructure
One of the greatest barriers to investment in new renewable generation and tapping the full potential of resources such as solar and wind is the lack of necessary electricity transmission infrastructure. While estimated wind and solar resources are vast, frequently the areas with the most abundant concentrations of these resources are remote and far removed from end-users of electricity. Policies that promote the build-out of new electricity transmission lines allow access to these resources and can provide additional incentives for utilities to invest in them.
Related Business Environmental Leadership Council (BELC) Company Activities
Related C2ES Resources
Climate Change 101: State Action, 2011
Wind and Solar Electricity: Challenges and Opportunities, 2009
Further Reading / Additional Resources
American Wind Energy Association (AWEA)
Congressional Research Service
InterAcademy Council, Lighting the Way: Toward a Sustainable Energy Future, 2007
International Energy Agency (IEA), Energy Technology Perspectives 2010: Scenarios and Strategies to 2050, 2010
“Levelized Cost of Energy Analysis Version 3.0” Lazard, June 2009
U.S. Department of Energy (DOE)
 The levelized cost of electricity is an economic assessment of the cost of electricity generation from a representative generating unit of a particular technology type (e.g. wind, coal) including all the costs over its lifetime: initial investment, operations and maintenance, cost of fuel, and cost of capital. The levelized cost does not include costs associated with transmission and distribution of electricity. For all resources, levelized cost estimates vary considerably based on uncertainty and variability involved in calculating costs for electricity. This includes assumptions made about the size and application of the system, what taxes and subsidies are included, location of the system, and others.
 The power (P) available in the area swept by the wind turbine rotor can be calculated using the following equation: P (in Watts = J/s = (kg*m2)/s3))= 0.5 * (air density, ~1.225 kg/m3) * (area of rotor in m2) * (wind speed in m/s) 3. The 33 percent increase in power from a 10 percent increase in speed can be illustrated using a sample calculation (simplifying the equation to represent the first three variables on the left, which are simply multipliers, as X). At 10 meters per second (m/s), P = X*(10)3 = 1000X. If we increase the wind speed by 10 percent, to 11 m/s, P = X*(11)3 = 1331X. Windspeed has increased 10 percent, and available power has increased by 33 percent.
 This is the area covered by the rotor blades as they make a rotation. More efficient turbines produce more energy for a given amount of area covered.
 Note that natural gas power plants have lower capacity factors not due to technical limitations but because they are used for load-following and intermediate load duty rather than baseload generation, which is what coal plants are typically used to provide.
 DOE EERE, Wind Technologies Market Report, 2011.
 DOE EERE, Wind Technologies Market Report, 2011.
 Reported assistance for 2010 was $30 million, AWEA, 2011.
 One fifth used funds from the American Recovery and Reinvestment Act (ARRA) as a primary or secondary source, AWEA, 2012.
 IEA 2010, BLUE Map scenario.
 Schiermeier Q., J. Tollefson, T. Scully, A. Witze, and O. Morton. “Electricity Without Carbon.” Nature 454 (2008): 816-822.
 The PTC is currently 2.2¢/kWh, however one cannot simply add 2.2¢/kWh to cost estimates to yield a cost without the PTC, as the PTC is limited to 10 years and is furthermore not available to all investors. The analysis is further complicated by the 2009 stimulus bill, which extended the PTC and provided the option of an investment tax credit in lieu of the PTC. Nonetheless, a rough estimate is that the non-PTC price would be 2 cents per kWh higher than the PTC price. The in-service deadline for the PTC is December 31, 2012.
 These, again, are levelized costs of generation, and do not include transmission and distribution costs.
 Low estimate taken from Logan, Jeff and Stan Mark Kaplan, Wind Power in the United States: Technology, Economic, and Policy Issues, Congressional Research Service, June 2008, see http://fas.org/sgp/crs/misc/RL34546.pdf. High estimate comes from communication with Jeffrey Jones (Energy Information Administration) regarding the levelized cost of electricity generation in the Annual Energy Outlook 2009.