TODAY’S STUDY: Big Growth In Customer-Sited Wind
2016 Distributed Wind Market Report
Alice C Orrell, Nikolas F Foster, Scott L Morris, Juliet S Homer, August 2017 (Pacific Northwest National Laboratory/Battelle/U.S. Department Of Energy)
From 2003 through 2016, a total of 992 MW in cumulative capacity from over 77,000 wind turbines was deployed in distributed applications across all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands (USVI), and Guam. In 2016, 25 states and Guam added a combined 45.4 MW of new distributed wind capacity, representing 2,585 turbine units and $163 million in investment. Of the 45.4 MW, 43 MW is from turbines greater than 100 kW, and 2.4 MW is from small wind (turbines up through 100 kW). Rhode Island, Minnesota, and Massachusetts led the United States in new distributed wind power capacity in 2016.
The 43 MW from turbines greater than 100 kW installed in distributed applications in 2016 represents $149 million in investment, an increase from 23.7 MW and $81 million in 2015. The increase was driven mainly by the installation of multiple large (greater than 1 MW) turbine projects, mostly installed behind the meter, or remote net metered, for industrial operations and municipalities.
The 2.4 MW of small wind deployed in the United States in 2016 represents 2,560 units and more than $14 million in investment. This continued the downward trend of recent years and was the lowest small wind annual capacity addition recorded since this annual report was started in 2012. However, while overall capacity is down—driven by the decrease in sales of units sized from 11 kW to 100 kW —sales of units 10 kW and less increased from 2015.
Since 2012, the number of small wind turbine manufacturers, both operating and participating in the U.S. market, has decreased. U.S. small wind manufacturers accounted for 98% of 2016 U.S. domestic small wind sales; non-U.S.-based small wind turbine manufacturers continue to have limited sales in the United States and typically focus on international markets. New York led the nation for small wind capacity deployment in 2016, accounting for 25% of documented small wind capacity for the year.
As certification requirements are becoming increasingly common across the globe, small wind manufacturers continue to pursue the certification process for their turbine models. Certification is also consistent with industry and Department of Energy goals to promote the use of proven technology; raise its competitiveness; and increase consumer, government agency, and financial institution confidence and interest in distributed wind.
Three new small wind turbine models were certified in 2016. A total of 15 different small wind turbine models are fully certified to the American Wind Energy Association (AWEA) Standard 9.1-2009 as of July 2017, whereas no turbine models were certified in 2010. Three medium wind turbine models have published power performance and acoustics certifications to International Electrotechnical Commission (IEC) 61400-12-1 (power) and IEC 61400-11 (acoustics).
In January 2016, United Wind, a distributed wind leasing company, announced that it had secured $200 million in project equity capital from Forum Equity Partners to expand its lease program. A year later, United Wind announced that it had purchased 100 Excel 10 Bergey WindPower wind turbines, the largest order ever—by number of units—for either company.
In December 2016, One Energy Enterprises LLC secured $80 million in financing from Prudential Capital Group, signaling institutional capital acceptance of One Energy Enterprises’ approach to providing distributed wind to industrial and commercial customers.
Other highlights of the report include:
• U.S.-based small wind turbine manufacturers continued to favor U.S. supply chain vendors for most of their wind turbine components. Self-reported domestic content levels for 2016 ranged from 80% to 100%.
• U.S. small wind turbine manufacturers continued to focus on international markets as a source of revenue. While exports doubled from 2014 to 2015, exports in 2016 were back to a level comparable with 2014 at 10.3 MW with an estimated value of $62 million from six manufacturers.
• Reflecting the increase in sales of units 10 kW and less in size, an estimated 95% of turbine units in 2016 distributed wind applications were deployed to charge batteries or power off-grid sites such as remote homes, oil and gas operations, telecommunications facilities, boats, rural water or electricity supply, and military sites. However, grid-tied wind turbines accounted for nearly 99% of the annual distributed wind capacity (in terms of MW).
• Based on small wind turbine manufacturers’ reports, the overall capacity-weighted average installed cost for small wind turbines sold in the United States in 2016 was $5,900/kW. After slightly declining the past three years, this cost metric has increased slightly from $5,760/kW in 2015.
• Based on surveys of international government and industry publications, total global small wind installed cumulative capacity was estimated to be at least 1.4 GW in 2016.
• The top three U.S. small wind turbine manufacturers, based on 2016 sales in terms of capacity (MWs of domestic sales and exports), in order were Northern Power Systems of Vermont, Xzeres Wind of Oregon, and Bergey WindPower of Oklahoma.
• The combined value of federal, state, and utility incentives given for distributed wind projects in 2016 was $12.8 million (excluding repaid loans, the federal investment tax credit, and federal depreciation). This reflects a relatively modest increase from the $10.6 million of 2015 funding awards, while still being significantly lower than in the preceding years, when funding levels fluctuated between $100 million (2012), $15.4 million (2013), and $20.4 million (2014).
• The overall number of wind turbine manufacturers supplying turbines for distributed wind projects has contracted significantly since 2012. In 2016, reported U.S. distributed wind projects encompassed 29 different wind turbine models ranging from 160 W to 2.3 MW from 17 manufacturers. This is comparable to 2015, during which U.S. distributed wind projects used 24 different wind turbine models ranging from 160 W to 2.85 MW from 15 manufacturers and suppliers, but a decline from the peak of 74 different turbine models from 30 manufacturers and suppliers in 2012.
• For documented projects in 2016, residential and agricultural installations accounted for the majority of 2016 projects (34% and 29%, respectively), but only for 7% of the total distributed wind capacity installed in 2016. Institutional projects, mainly utilities and schools, accounted for 64% of the distributed wind capacity installed in 2016.
Processed for posting by Jessica Wunder