Below is a summary of the report:
December 2007 — October 31, 2008
R. Kwartin, A. Wolfrum, K. Granfield, A. Kagel, and A. Appleton
ICF International Fairfax, Virginia
This report examines the development potential of mid-scale distributed wind projects. Its purpose is to analyze why this segment of the wind market has not enjoyed the same growth as central-station wind, and to assess the market potential for this technology under current market and policy conditions.
One of the most significant barriers to the development of distributed wind is a general scarcity of turbine choices and turbine inventory available for purchase. Most turbine manufacturers have scaled back their involvement in the mid-scale market segments in favor of larger turbines suitable for large, central-station wind farms. Those distributed-scale turbines that are available are often relatively expensive, hard to order in single units or small lots, and suffer from long delivery delays.
In addition to product scarcity, distributed wind is challenged by relatively poor productivity, siting issues, burdensome interconnection rules, aesthetic concerns, and fragmented state rules regarding net metering. Several other factors favoring distributed wind include areas of high and rising retail electricity prices, increasingly favorable public policies, and greater community interest in the environmental and economic benefits of renewable energy.
The study evaluated the economic potential for distributed wind in the contiguous United States. After screening out ineligible sites, more than 3.6 million surviving sites were evaluated to determine whether distributed wind would be financially feasible. It was necessary to exclude certain customer types from the study, because they lacked data necessary for the analysis. The financial model considered:
Wholesale and retail power prices;
Renewable Energy Credit prices;
Turbine technical and financial characteristics;
Onsite and offsite energy use; and
The results varied significantly by customer class. Overall, the study showed that 67,100 out of the 3,611,655 sites/areas that were analyzed for economic viability yielded a positive net present value under current market conditions and policies and including all applicable state and federal incentives.
To assess the potential of new technology, two virtual wind turbines — the NREL 250 and NREL 500 — were included in the analysis. These virtual turbines were compared to existing 250 kW and 500 kW turbines. Overall, the study showed that 204,677 sites analyzed had positive net present values with the virtual turbines compared with 10,407 economically successful projects with existing 250 kW and 500 kW turbines. These numbers do not include the application of capped state and federal incentives.
The authors conclude that improvements in technology, reductions in cost, greater productivity at lower wind speeds; and improved policy support could expand distributed wind development into the future.