The small wind energy sector, 5kW-100 kW capacity, is projected to grow significantly in the period 2010-2020 providing new technology and new market sectors can effectively be developed. Market segments are listed with initial assessments on size, projected growth, energy demands and compatibility with renewable energy sources. In order for successful market segment development and market capture there will need to be segment prioritization, strategic plan development and implementation and collaborative partnerships with vested players.
Status: The global telecommunications industry had revenues of $3.85T in 2008 growing at 8% annually with industry leaders including Alcatel-Lucent, British Telecom and China Mobile. There are several key national players in the U.S. telecommunications industry including Qwest, Sprint, Verizon and Motorola that operate tens of thousands of communication nodes. There are approximately 3,500 independent small telecommunications organizations in the U.S. each operating 100-200 remote nodes. Telecom sites require backup power supplies ranging from 10kWh/day to1,000 kWh/day. Pike Research (2010) stated that “energy consumption is one of the leading drivers of operating expense for telecom network operators especially in rural and remote locations.” Remote sites typically utilize battery packs and diesel generators to provide 48v for 72 hours of reserve with disruption in on-grid power. The trend is moving toward a combination of small wind and photovoltaic renewable energy requiring as little as 1 kW -2kW of combined capacity. However, there is a growing interest in having the renewable energy capacity at these sites increased significantly for onsite utilization as well net metering the excess electricity for revenue. A 20kW turbine could provide up to approximately 40,000 kWh of excess electricity per year providing approximately $4,000 in revenue per year at $.10 per kWh.
21,000 small wind units in the period 2011-2015. 10,000 10kW generators @$3000 =$30M.
10,000 20kW generators at $5,000 =$50M. 1,000 100kW generators at $25,000 =$25M. Total $105M
Market capture (generator sales): 20% = $21M sales.
Community Energy Systems
Status: Rural communities are becoming concerned about future blackouts due to grid failure and the massive demand for electricity in the large metro areas and east/west coast populations. Besides energy independence rural communities are also looking for new revenue sources and jobs. Independent community energy systems could meet those needs. Community-Based Energy Development (C-BED) models operate in over 30 U.S states to promote and incentivize community energy systems. These systems are typically partnerships with utilities providing financial and technical resources. Typically, C-BED projects have majority ownership by communities or local investors. Systems tend to rely on a mix of complementary renewable energy technology including small wind, photovoltaic, ground water heat pumps and biomass (syngas). In Minnesota, C-BED legislation is included in the Next Generation Energy Act of 2007 allowing for projects up to 40MW to be supported by “feedin-tariffs.” Through 2008, Ottertail Power Corp and Xcel Energy were partners in 57MW of C-BED renewable energy projects with an additional 124MW of projects under construction or final review. C-BED projects have strong local economic impact. The GAO estimates that 2MW of C-BED project generates $3.3M of new income annually.
10MW of system capacity with 2MW of small wind could potentially produce
20,000,000 kWh of electricity per year generating $2M of revenue per year while supplying enough energy to support 2,000 homes. 20 100kW units = 2MW of capacity.
50 community energy systems per year in the period 2012-2015. 50 x 20 units =1000 units (100kW) x 4 years = 4,000 units.
Market capture (generator sales): 20% 800 units (100kW) @ $25,000= $20M in sales.
Distributed Energy Systems (DES)
Status: DES is by definition energy generated in the proximity of a targeted user group in non-metro areas reducing the expense of transmission and marketing costs. Typically DES focuses on renewable energy sources since conventional energy sources tend to be developed in the proximity of high population urban areas. The targeted market sector tends to be individual homes on acreages, farm/ranches and businesses interested in sustainable, independent renewable energy systems. Successful DES rely on complementary renewable sources including PV and wind. This combination provides the capacity to switch between sources based on intermittency, cost, peak demand, reserves and power quality. Diesel or natural gas generators can act as reserves in DES. Fuel cell technology is showing promise in replacing those conventional fuel generators. Homes will generally utilize 5kW to 20 kW systems producing from 10,000kWh to 40,000kWh of electricity per year. As the average home utilizes approximately 10,000 kWh per year this could leave an excess of up to 30,000kWh per year for net metering generating revenue up to $3,000 per year in this scenario. Farms/ranches will utilize renewable 20kW to 100 kW systems producing from 45,000 kWh to 250,000 kWh per year. Revenue will vary depending on net metering of excess electricity. There would likely be a complementary mix of small wind and solar. Businesses will utilize 50kW to 250kW systems depending upon the intensity of electricity consumption. These systems will likely integrate complementary renewable energy technology including wind, solar, ground water heat pumps and biomass.
25,000+ installations, 2011-2015
15,000 10kW units @ $3,000 = $45M
10,000 20kW units @ $5,000 = $50M
500 50 kW units @ $13,000 = $32.5M
100 100kW units@ $25,000= $12.5M
Total generator sales = $140M
Market capture : 20% = $19M in sales
Existing Wind Fields
Status: There is approximately 25,000 MW of commercial wind farm capacity developed in the US with another 100,000 MW of commercial wind field capacity globally. There is the potential to increase an estimated 2.0%-2.5% capacity to these wind farms by adding (in-fill) small wind units at the perimeters and selected locations within the wind farms. While this may seem like a small amount of additional generation, costs of permitting, electrical infrastructure, transmission, roads and PPAs are already in place and expensed. AWEA studies (2008) determined that 33%-40% of wind farm costs were non-turbine hardware costs. It is assumed that existing wind farms are located at the prime wind locations. Assume the addition of 24 50kW VAWT units (1.2MW) at a 100MW wind farm. This would add 1.2% 0f capacity. If it were a 50MW wind this would result in 2.4% increase in capacity.
20% of the estimated 750 commercial wind farms in the US= 150 x 24 units = 3,600
50kW units @$13,000 = $46.8M
Market capture: 20% = $9.4M in sales
High Wind Environments
Status: High wind environments offer special business development opportunities as increased electrical output provides for increased revenue and accelerated ROI. The energy in a 26mph (rated) wind 8x that of a 13mph wind. In the example of a 100kW turbine, the annual output at a 13mph average wind would be 222,000kWh as compared to 1,776,000 kWh with a 26mph average wind (AWEA, 2008). The differential of 1,554,000 kWh would have retail value of $155,000/year at $.1/kWh. In the US, high wind environments include the entire Midwest from ND to TX, coastal areas, the Great Lakes, AK and HI. These Class 7-8 winds areas averaging 25mph+ average winds with 60 mph winds common, require state-of-the-art wind turbines (VAWT) and generator technology to function. Limited access may limit the types of structures that can be installed and reliance on distributed energy systems. Scenario #1 utilizing 20 50kW turbines, 1MW capacity, could produce an additional 3,000,000 kWh per year. Scenario #2 utilizing 40 100kW turbines, 4 MW capacity, could produce an additional 12,000,000 kWh per year.
Scenario #1: 10 projects per year (2012-2015), 10x20 units x4 years = 800 50kW units x$13,000=$10.4M
Scenario #2: 10 projects per year (2012-2015), 10x40 units x 4 years = 1600 100kW units
x $25,000= $40M
Market capture (generator sales): 20% = $10.1M
Status: Irrigation pumping systems are widespread throughout the Midwest, southwest and western US and are significant consumers of electricity. There were 55M acres irrigated in the U.S. in 2008 on210,000 farming units consuming $2.68B of energy including $1.5 B of electricity. That averaged out to approximately 72,000+ kWh per irrigation unit. In 2008, 13,000+ irrigation systems expensed in excess of $50,000 for energy costs. Another 15,000+ irrigations systems expensed between $20,000-$50,000 for electricity. The five states with the largest number of irrigated acres are in order: Nebraska, California, Texas, Arkansas and Iowa. (Reference:USDA National Agricultural Statistics Service). Wind and solar energy are abundant resources in these areas and are extremely complementary. Distributed energy is important in these areas due to the rural setting. There are inherent concerns over grid failures, grid losses, electrical rate hikes and electricity quality. Irrigation tends to be seasonal although demand curves tend to follow daily energy demand curves thus generally competing with other uses. A typical irrigation practice would require a minimum 50kWh capacity system. RE systems would likely be set up to meet the needs of multiple irrigation practices in an immediate area. .
In the period 2012-2015, 500 50kW units @ $13,000= $6.5M year x 4 years = $26M;
500 100kw units @$25,000 = $12.5M x4 years= $50M Total $76M
Market capture (generator sales): 20% = $15.2M in sales.
Status: These would include military installations, mining operations, forestry operations and remote communities in developing countries. Complementary energy sources would be solar and diesel. 40 100kW units =4MW capacity capable of producing 8,000,000 kWh per year. Some of these locations would be in harsh environments with high demand during winter months. Solar energy generation is limited in the winter months in the extreme northern and southern latitudes. Other remote locations in developing countries may not even have access to diesel generators so would have total dependence on renewable.
In the period 2012-2015, 10 projects per year = 400 50Kw units x$25,000 = $10M x 4 years=$40M
Market capture (generator sales): 20% = $10M in sales.
Status: NREL and the MN West Central Research and Outreach Center have been supporting research in hydrogen production from wind energy. Wind turbine generated electricity passed through water utilizing electrolizers separates H from O. H can then be utilized in a hydrogen internal combustion engine or a fuel cell or can be converted into a hydrogen-based fertilizer. (Most hydrogen-based fertilizer today is converted from natural gas.) Transmission costs are minimized as both end products are utilized in the region. 20 100kW units = 2MW of capacity producing 4,000,000 kWh per year.
In the period 2012-2015, 100 projects x 20 100 kW units = 2000 units @ $25,000= $50M.
Market capture (generator sales): 20% = $10M in sales.
Anhydrous Ammonia Production
Status: NREL and the University of Minnesota have supported research into utilizing wind power to produce anhydrous ammonia converted into nitrogen based fertilizer. This has the potential to significantly increase profit margins in agriculture and have impacts on rural economies.
100 projects with 10 100kW turbine systems each= 1000 100kW @ $ 25,000= $25M
Market capture (generator sales): 20% =$5M in sales
Status: Power Companies need to address the development and integration of renewable in order to meet mandated RES, target distributed energy demand and to reduce the need for additional transmission lines. A typical scenario would call for an additional 10,000 kw of capacity dispersed at 100 sites. This would provide for 100 100kw capacity installations located along existing transmission lines, at substations, near communities and in proximity of major agricultural/industrial/business /residential clusters. An installation would include complementary capacity of wind, PV and reserve generators or battery storage systems capable of generating 200,000-300,000 kWh per year. The installation of an onsite 100kw wind turbine such as the Northwind 100 with a hub height of 37m (121 feet) would have intrinsic value in the tower in being able to support a network of regional communications needs.
In the period 2013-2015, 30 projects of 100 100kW turbine systems each = 3000 @$25,000 = $75M. Market capture: 20% = $15M in sales
The fundamental question becomes how do we identify the 2-3 business opportunities with the greatest potential and design and implement a strategic plan to develop these new markets. The successful plan will be the first to comprehend the interests of the interests of the power companies and their customers, understand the technical and logistical barriers, assess the regulatory constraints, resolve the financial needs, detailing cost benefit ratios and ROI, and project marketing. The key is to build capacity and credibility by assembling a collaborative team of experts to address all issues and deliver turn-key solutions.
This Team would have as a minimum the following collaborative components/members
- Project management
- Regulatory affairs
- Financial planning/funding
- Costs benefits analysis
- Wind technology (turbines, generators, blades, invertors, controls)
- Electrical engineering
- Electrical storage and backup systems.