What is the future of wind energy on the road to a carbon neutral world?

In response to the broad and dire impact of climate change, individuals, organizations, and governments are taking actions. The Paris Agreement aimed to keep the increase in the global average temperature below 2oC above pre-industrial level via greenhouse gas emission reduction1 and the UN targeted at a world of carbon neutrality by 20502. To achieve these goals, transitioning from fossil fuels to cleaner and more sustainable energy is imperative.

The global energy consumption has been trending upward. It increased by 40% in 2017 from 1990, largely driven by the rising consumption in Asia3. Despite that the global energy demand dropped about 5% in 2020 from 2019 due to the Covid-19 pandemic, the demand is expected to rebound to the pre-pandemic level in a few years4. Due to the cost reduction through technology advancement and government support, renewable energy has played a more important role in the total energy mix. The share of renewables for global electricity generation increased to about 28% in 2020 from about 25% in 20173. Despite the increasing share, renewables are still much less than the combined coal and gas, which supplies 60% of global electricity generation5. Of renewables, hydropower accounts for almost 60%, followed by the combination of solar and wind for 30%. In the U.S., renewable supplied 21% of electricity demand in 2020 and are projected to double the share in 20406, which will take over the share from retired coal and nuclear power plants.

Solar and wind energy has dominated the growth of renewable energy as hydropower is constrained by geographical requirements. In 2020, solar PV was the fastest growing renewable energy source globally, followed by wind. Wind energy will be the largest contributor to the renewable growth in the U.S. through 2024 before its tax credit phases out7. Considering its rising importance globally and in the U.S., the following content will focus on wind energy.

As of 2020, the global cumulative wind power capacity was 743 GW which included 35 GW from offshore wind. Although the expiration of incentive schemes will slow down installations, newly added wind capacity is projected to reach over 469 GW in the next five years under the present policies and pipelines, according to GWEC’s annual report8. The U.S. is one of the leading countries in onshore wind power, however, it lags behind the league in the offshore wind sector. There was about 122 GW of onshore wind capacity in 2020 in the U.S., which far exceeds 42 MW of offshore wind. The landscape of US wind industry may change under the current Biden administration, which commits to develop more offshore wind9. In the East Coast, offshore wind development will grow rapidly in the next five years as a pipeline of 34.8 GW has been planned and under construction. In comparison, the offshore wind development in the West Coast is much slower as no offshore wind farms are in operation so far. There are several proposals in the coast of California and Oregon, though they are currently at a nascent stage and could take years for siting and permitting before construction begins.

The cost of wind power generation can be quantified by a common metric, the levelized cost of energy (LCOE). In general, the LCOE is the lowest for land-based wind, followed by fixed-bottom offshore wind, and the highest for floating offshore wind in which wind turbines are installed in deep ocean. Such cost ranking is true for many countries including the U.S., although the LCOE of each project varies from location to location. For offshore wind, the LCOE increases with ocean depth and distance from grid connection. Due to different requirements and challenges facing each sector, the primary component of the LCOE differs. The dominant cost of land-based wind projects is wind turbine components, whereas that of offshore wind projects, regardless of fixed-bottom or floating, is the balance of the system including electrical infrastructure, substructure and foundation10.

The estimated LCOE of wind energy projects has declined substantially over the last decade and the downward trend will likely continue with its increasing share in the market. The primary driver of cost reduction differs between land-based and offshore wind10. For land-based wind, the future LCOE reduction is likely to be driven by the increasing power generation through larger turbines, improved control strategies, and decreasing losses. For offshore wind, it is operation and maintenance expenditure.

Compared to other energy sources, wind energy and other variable renewables such as solar energy are already cost effective and have cheaper price tags than traditional fossil fuels in many places, though the costs vary with national, regional, and local conditions. According to a report published by IEA11, the three energy sources with the lowest median LCOE from least to greatest are nuclear with long-term operation, onshore wind with installed capacity greater than 1 MW, and solar PV on utility scale. Offshore wind energy is still more expensive than its low-carbon technology counterparts, but its cost has fallen substantially from over $150 per MWh five years ago to below $100 per MWh now.

The whole world is moving toward more sustainability and less carbon emissions. Our reliance on renewables in daily life can only be greater as their shares in the total energy mix increase and the electricity sector expands due to more demand and electrification of transport and heat. Wind has been a key renewable source in many countries particularly those with abundant resources. However, it is not easy to generate more wind energy and supply it whenever needed. There are many challenges and obstacles. Some can be resolved in the near future while others cannot. For example, the flexibility and reliability of wind power, which varies with weather conditions, can be improved by its connection to more energy storages when their technology becomes more mature and cost falls in coming years. However, it takes years to study the long-term impact of offshore wind farms on the environment and economy. It also takes time and effort to have transparent and continuous conversation among stakeholders and to build the trust and comprehensive compensation for the communities that will be impacted. Government support in subsidy and regulations are critical and government decision making should balance wind power development, biodiversity protection, and economic growth. Climate literacy and the involvement of citizens and community at early stages are equally critical to build wind development with maximum benefits and minimum impacts to avoid more dire damage by climate change.

Reference:

  1. https://unfccc.int/sites/default/files/english_paris_agreement.pdf
  2. https://www.un.org/sg/en/content/sg/articles/2020-12-11/carbon-neutrality-2050-theworld%E2%80%99s-most-urgent-mission
  3. T. Ahmad, D. Zhang: A critical review of comparative global historical energy consumption and future demand: the story told so far Energy Rep., 6 (2020), pp. 1973-1991
  4. https://www.iea.org/reports/global-energy-review-2020/global-energy-and-co2-emissions-in-2020#energy-demand
  5. https://www.iea.org/reports/global-energy-review-2020/renewables#abstract
  6. https://www.eia.gov/todayinenergy/detail.php?id=46676
  7. https://www.eia.gov/outlooks/aeo/
  8. https://gwec.net/global-offshore-wind-report-2020/
  9. https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/29/fact-sheet-biden-administration-jumpstarts-offshore-wind-energy-projects-to-create-jobs/
  10. T.J. Stehly, D.M. Heimiller, G.N. Scott: 2016 cost of wind energy review, Tech. rep. National Renewable Energy Lab.(NREL), Golden, CO (United States) (2017) (https://www.nrel.gov/docs/fy21osti/78471.pdf)
  11. https://www.iea.org/reports/projected-costs-of-generating-electricity-2020

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