Wind Energy in California - Report Example

Name Tutor Course title Date Table of Contents Conclusion 9 Works Cited 12 Wind Energy Executive Summary California faces many environmental, economic, and political pressures to develop new sources of clean renewable energy. The demand of electricity is increasing by more than 20 percent after every decade. The demand is still expected to rise by 10 percent even after implementation of standards of efficiency. The state of California currently generates most of its energy from the combustion of fuels having high concentration of carbon and this produces a high percentage of greenhouse gas. Apart from importing additional electricity from other states and countries, the state also imports some of these fuels. It is therefore important for the state to develop its internal sources of renewable energy[Lun07]. The pressure of demand and high prices of electricity has made wind energy an attractive development option in California. Wind provides the largest opportunity for economic development of California out of all alternative sources of electricity. Wind energy in California produced approximately 4258 million kilowatt of energy in the year 2004[Mar15]. This was nearly 1.5% of the total energy of California as a state. This exceeds the amount of energy required for lighting a city as large as San Francisco. Due to the falling prices of electricity and the overall economic downturn, many wind projects have been put on hold. However, with available funding and enough incentives, California could see its installed capacity for wind electricity as the alternative renewable energy quadruple in the next decade. In regards to renewable sources of energy, landfill gas, biomass, hydropower and even geothermal are expected to be profitable[Gip95]. The next logical source of clean energy to be pursued would be wind energy projects because they are characterized with the smallest price premium, which can be bridged through federal incentives like PTC (Production Tax Credit) Introduction Wind electricity power plants, commonly known as wind farms refers to small power plants which are made of multiple wind turbines. In these plants, wind turbines can be added as the demand of electricity grows. The power tapped from these wind farms is added to the already existing national grid. This power is combined with electricity generated from other power plants and then supplied to the consumers for use. Extra income is gained by the land owners as well as the municipalities. It does not affect land uses such as agriculture and others because all these activities can continue undisturbed. The wind energy process flow diagram is as shown below: Figure 1: Wind Energy Flow Diagram The diagram above shows high voltage transmission system carrying power from the power plant and transmits it many miles away. Electricity is drawn from the submission lines by lower voltage distribution system and then distributes it to homes and individual customers. The blades are turned by the winds and these blades spin the shaft which is connected to the generator which makes electricity. In more than 70 countries globally, wind power is considered a major source of electricity. Demand for emission free wind power is continually increasing. Installation of wind power turbines can also be done quickly almost anywhere in the world. The global wind power has been on the rise over the past years, and the capacity has grown and is still continuing to grow at an average cumulative rate of more than 30 percent. However, it is important to note that wind energy has attracted global opposition to its development and use even though it emits no pollutants, consumes no fuel, and shares its land space with other activities such as agriculture. Based on the public opinion, wind power is the most favorable source of alternative clean energy but its development is facing fierce opposition on the basis of aesthetic values, health concerns, fragility of the ecosystem/environment, as well as economic risks in terms of depreciation of the value of real estate and tourism. Background of the Study With the State Energy Action Plan and an Aggressive Renewable Portfolio Standard, PIER – the Public Interest Energy Research in collaboration with the California Energy Commission is trying to pave a strategic pathway for integration and growth of future renewable energy generation and transmission[Mar15]. This laboratory analyzes the wind resources in California, their benefits and economics to the society and the electric system of California as a state. The wind technology base is established as are the current and projected future state of winds economics. In order to identify the most beneficial and economical resources, three scenarios are analyzed: there is modeling of a utility-scale analysis for 2405 MW based on proximity to transmission hotspots over six counties in California. Out of the 2405 MW, 1773 had positive system benefit without having to be upgraded in any manner. On the other hand, if any upgrades, especially transmission upgrades, were to be done, there would be additional 3256 MW by 2017; the second scenario is the identification between 13 MW and 26MW of low wind speed capacity that are placed near generation hotspots that are distributed. The third and the last scenario analyzes the importance of low wind speed resources which are not appropriated under the utility scale analysis. Due to the summer peak load of approximately 282 MW, there was a net system benefit of 81 MW[Gip95]. Aim The main aim of Strategic Value Analysis vision is to come up with a ploy for preventing and addressing future grid problems. This will call for both consideration of non-energy benefits for the environment and also the economy through integration of renewable generation at strategic hotspots and locations across the state. It will require renewable assessment of renewable energy resources as well as power flow analysis, the transmission modeling associated with this and examination of the distributed generation potential. The findings and solutions takes into consideration the timeframes and magnitudes of transmission as well as the necessary upgrades. The benefits of other renewable technologies are also taken into consideration including solar, biomass, geothermal, and hydro. Wind Energy in California The wind energy generation in California comprises of residential scale wind turbine systems and utility scale wind generation facilities. There are five strategic areas in California where the existing utility scale wind power generation facilities are established: San Gorgonio, Pacheco, Altamont, Solano, and Tehachapi. Approximately 95 percent of the commercial wind power generation in California comes from comes from three of these strategic regions mentioned (Tehachapi, Altamont, and San Gorgonio)[Gip95]. Generation from these three strategic points also accounts for nearly 11% of the wind generated electricity in the world. California household uses an average of 6500hWh of electricity annually, and 3.5 billion kWh of electricity produced annually from wind is enough for lighting more than 530,000 homes[ElK15]. Technology Performance Characteristics The status of wind technology in California is divided by turbine size. This results into two categories of: large turbines generating more than 250kW and which are also considered large or utility scale; and turbines producing less than 250kW that are characterized with farms, individual homes or rural electrification. The sizes of turbines are however increasing and may become as large as 500kW. The past few years have seen an increase in the efficiency, reliability and sizes of the wind turbines. This has made their development to be more cost effective hence making wind power to be ranked among the most preferable and appealing choice for upcoming generation facilities. For the past ten years, wind power has been considered as the fastest growing source of energy in the industry[Lun07]. Due to the continued advancement, growth in the industry is accelerating. The total wind power capacity installed has been growing. From the time of project development to the time of power generation, the average time frame ranges from 9 months to 1 year. This has made wind electricity economically viable and the most rapidly deployable[Pim02]. Economic Analysis and Prioritizations of a New Wind Farm Evaluation of the economic benefits for development of a new wind resource for the State of California calls for the use of both temporal and geographical perspectives. Potential sites are determined and identified geographically based on the cost effectiveness and transmission impact. The factors considered when doing transmission analysis included: Beneficial impact of the transmission grid Proximity of resource to transmission interconnection points Future need for investing in new infrastructure The upgrades that will be required for the transmission lines that are already in place. When a site is being developed, the following must be taken into consideration: wind energy costs compared to the costs of other sources of electricity, generation costs of combined cycle, and market price referents. Geographic Evaluation of Wind Sites A summary of filtered technical potential for wind generation should be provided by the authorities based on the high resolution maps of the county. There should be separate high wind speed, considered to be greater than class 5, as well as low wind speed resources that falls in class 3 and 4 winds. The current technology has enabled low speed wind turbines. When doing geographical evaluation of wind sites, there must be significant consideration of the land use. Geographical Information System can be used for evaluating site suitability for wind turbines as well as for predicting the extent of available land and the locations for feasible wind power development. This feasibility study will include physical requirements, human impact factors as well as environmental factors. The following criterion was used for modeling wind farm suitability: Table 1: Criterion for Modeling Wind Farm Suitability Criteria Reasons for Selection Slope Slopes will affect the ease of construction and maintenance of a wind farm Wind Energy Potential Wind potentiality of an area will be essential for energy production Land Use Land use id considered to be a criterion for representing the environmental impacts of the wind farm Population Density This concerns the public outcry on the noise impacts and visuals of the wind farms. Distance of a region to the power transmission lines This will be necessary towards reduction of the costs for constructing new distribution lines. Distance to roads Distance to roads should be consider in order to allow for better access during the construction of the wind farm and its maintenance in future. Exclusionary regions like Towns This must be taken into consideration in order to avoid conflicting land use preoccupied by human infrastructure. Exclusionary regions like wetlands This is necessary towards avoiding ecological sensitive areas Exclusionary regions such as airports This must be taken into consideration in order to avoid conflicting land use preoccupied by human infrastructure. Other exclusionary areas such as railroad This is to be considered in order to avoid areas on the railroads. Other considerations Other considerations may be the position of the Defense Department on how the wind farm projects may interfere with the military radars, the position of the Wildlife Department on how the wind farm may endanger wildlife especially birds. Economic Analysis The approach use in the economic analysis concentrated on the areas with local and regional benefits of wind power generation. This analysis involved the evaluation of counties in California with large potentiality for wind power and which are also closer to power transmission lines, transmission congestion hotspots and areas also. Determining these hotspots require running a contingency analysis that will look at more than 5000 transmission lines, power plants and transformers in California. We will take into consideration a 10 mile radius buffer zone around the local hotspot. Resources outside the initial hotspot focus regions would be identified and significant transmission upgrades anticipated. Financial Analysis Evaluation of the firm’s financial benefit calls for conducting of a Net present Value (NPV). The Net Present Value will be equivalent to the investment’s future net cash flows deducted from the initial investment capital. The result is therefore the difference between an investment’s market value as well as its costs. This presents estimate of the amount of value created by undertaking an investment in the wind farm. For the investment analysis, the following assumptions were made: The power output will be calculated based on a total of 20 turbines The assumption of the system’s life time is 20 years The electricity output will be inclusive of 10 percent loss over the length of your HVDC links. Installation costs and annual operation costs are to be identified. The table below shows the approximated cost of installation per turbine: Table 2: Cost of Installation Installation Cost Cost per Turbine ($) Total ($) Cost of turbines 3,307,000 66,140,00 Foundation 279,465 5,589,300 Roads and pads 132,732 2,654,640 Erection of turbines 186,310 3,726,200 BOP electric w/Transformer 419,197 8,383,940 Spare parts 50,000 1,000,000 Maintenance and Engineering 232,887 4,657,740 Early stage development costs 93,155 1,863,100 Accounting and legal 5000 100,000 Miscellaneous Professional Fees 1000 20,000 Insurance 1500 30,000 Permits and Licenses 1500 30,000 Working capital reserve 275,000 5,500,000 Sub Total 99,694,920 Development fee 8,000,000 Education center 2,500,000 TOTAL 110,194,920 The table below shows the monthly expenses of the operations of the wind farm. Table 3: Monthly Expenses Expenses Amount ($) Maintenance and operations 75000 Maintenance and operations Contingency fund 41600 Project management fee Salaries Insurance 35000 Property tax 16600 Payment to land owners and lease 20000 Financial/admin/legal management Warranty expense 33300 Monthly expenses 221,667 Conclusion Wind power is the most preferred source of alternative energy over other sources because it has a low cost per watt hour in a good location, and it is associated with low maintenance cost. It is characterized by predictable power output in some locations. This is contrary to solar power of which despite being a good source of renewable energy, it cannot be relied on. Solar power is characterized with high initial costs for solar panels, variable power output in some areas, especially the areas without good solar exposure. Hydro power on the other hand is not suitable in many locations because of lack of resources. It also requires modification of water resources and this is an implication that the installation cost is high. In colder climates, freezing of pipes may pose a huge problem[Joh93]. Works Cited Lun07: , (Simmons, Yonk and Hansen 13), Mar15: , (California Energy Commission par 1), Gip95: , (Folkman, Hodge and Hutchison 24), Mar15: , (California Energy Commission par 8), Gip95: , (Folkman, Hodge and Hutchison 17), Gip95: , (Folkman, Hodge and Hutchison 10), ElK15: , (Jacobson and Delucchi 1158), Lun07: , (Simmons, Yonk and Hansen 19), Pim02: , (Pimentel, Herz and Glickstein 1114), Joh93: , (Cullen 17), Read More