2017 Wind Technologies Market Reportii This report is being disseminated by the U.S. Department of Energy DOE. As such, this document was prepared in compliance with Section 515 of the Treasury and General Government Appropriations Act for fiscal year 2001 public law 106-554 and ination quality guidelines issued by DOE. Though this report does not constitute “influential” ination, as that term is defined in DOE’s ination quality guidelines or the Office of Management and Budget’s Ination Quality Bulletin for Peer Review, the study was reviewed both internally and externally prior to publication. For purposes of external review, the study benefited from the advice and comments of 12 industry stakeholders, U.S. Government employees, and national laboratory staff. NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any ination, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof. Available electronically at SciTech Connect http//www.osti.gov/scitech Available for a processing fee to U.S. Department of Energy and its contractors, in paper, from U.S. Department of Energy Office of Scientific and Technical Ination P.O. Box 62 Oak Ridge, TN 37831-0062 OSTI http//www.osti.gov Phone 865.576.8401 Fax 865.576.5728 Email reportsosti.gov Available for sale to the public, in paper, from U.S. Department of Commerce National Technical Ination Service 5301 Shawnee Road Alexandria, VA 22312 NTIS http//www.ntis.gov Phone 800.553.6847 or 703.605.6000 Fax 703.605.6900 Email ordersntis.gov 2017 Wind Technologies Market Report iii Preparation and Authorship This report was prepared for the Wind Energy Technologies Office within the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy. Primary authors of the report are Ryan Wiser and Mark Bolinger, Lawrence Berkeley National Laboratory Contributing authors include Galen Barbose, Nam Darghouth, Ben Hoen, Andrew Mills, Joe Rand, and Dev Millstein Lawrence Berkeley National Laboratory; Kevin Porter, Katherine Fisher, and Nicholas Disanti ter Associates; and Frank Oteri National Renewable Energy Laboratory 2017 Wind Technologies Market Report iv Acknowledgments For their support of this ongoing report series, the authors thank the entire U.S. Department of Energy DOE Wind Energy Technologies Office team. In particular, we wish to acknowledge Patrick Gilman, Rich Tusing, and Valerie Reed. For reviewing elements of this report or providing key , we also acknowledge Patrick Gilman, Liz Hartman, Mikayla Rumph DOE; Christopher Namovicz, Cara Marcy, Manussawee Sukunta U.S. Energy Ination Administration, EIA; Andrew David U.S. International Trade Commission, USITC; John Hensley and Celeste Wanner American Wind Energy Association, AWEA; Charlie Smith Energy Systems Integration Group; Matt McCabe Clear Wind; Ed DeMeo Renewable Energy Consulting Services, Inc.; Danielle Preziuso Pacific Northwest National Laboratory; Tyler Stehly National Renewable Energy Laboratory, NREL; and Lawrence Willey University of Wyoming. For providing data that underlie aspects of this report, we thank the EIA, Bloomberg New Energy Finance BNEF, MAKE Consulting, and AWEA. Thanks also to Donna Heimiller and Billy Roberts NREL for assistance with the wind project and wind manufacturing maps as well as for assistance in mapping wind resource quality; and Carol Laurie NREL and Liz Hartman DOE for assistance with layout, atting, production, and/or communications. Lawrence Berkeley National Laboratory’s contributions to this report were funded by the Wind Energy Technologies Office, Office of Energy Efficiency and Renewable Energy of the DOE under Contract No. DE- AC02-05CH11231. The authors are solely responsible for any omissions or errors contained herein. 2017 Wind Technologies Market Report v List of Acronyms AWEA American Wind Energy Association BNEF Bloomberg New Energy Finance BPA Bonneville Power Administration CAISO COD California Independent System Operator commercial operation date DOE U.S. Department of Energy EDPR EDP Renovveis EIA U.S. Energy Ination Administration ERCOT Electric Reliability Council of Texas FAA Federal Aviation Administration FERC Federal Energy Regulatory Commission GE General Electric Corporation GW gigawatt HTS IEC Harmonized Tariff Schedule International Electrotechnical Commission IOU investor-owned utility IPP independent power producer ISO independent system operator ISO-NE New England Independent System Operator ITC investment tax credit kV kilovolt kW kilowatt kWh kilowatt-hour LCOE levelized cost of energy m 2square meter MISO Midcontinent Independent System Operator MW megawatt MWh megawatt-hour NREL National Renewable Energy Laboratory NYISO New York Independent System Operator O end-of-2017 wind power capacity is estimated to supply the equivalent of 48 of Denmark’s electricity demand, and roughly 30 of demand in Ireland and in Portugal. In the United States, the total wind capacity installed by the end of 2017 is estimated, in an average year, to equate to 7 of electricity demand. Texas installed the most capacity in 2017 with 2,305 MW, while fourteen states exceeded 10 wind energy penetration as a fraction of total in-state generation. New utility-scale wind turbines were installed in 24 states in 2017. On a cumulative basis, Texas remained the clear leader, with 22,599 MW of capacity. Notably, the wind capacity installed in Iowa, Kansas, Oklahoma, and South Dakota supplied 30–37 of all in-state electricity generation in 2017. A record level of wind power capacity entered transmission interconnection queues in 2017; solar and storage also reached new highs in 2017. At the end of 2017, there was 180 GW of wind power capacity seeking transmission interconnection, representing 36 of all generating capacity in the reviewed queues. In 2017, 81 GW of wind power capacity entered interconnection queues, second only to solar capacity additions. Energy storage interconnection requests have also increased in recent years. The Southwest Power Pool, Texas, and Mountain regions experienced especially sizable wind additions to their queues in 2017. 2017 Wind Technologies Market Report viii Industry Trends Vestas, GE, and Siemens Gamesa captured 88 of the U.S. wind power market in 2017. In 2017, Vestas captured 35 of the U.S. market for turbine installations, edging out GE at 29 and followed by Siemens-Gamesa Renewable Energy SGRE at 23. Vestas was also the leading turbine supplier for land-based wind installations worldwide in 2017, followed by SGRE, Goldwind, and GE. Some manufacturers increased the size of their U.S. workforce in 2017 or otherwise expanded their existing facilities, but expectations for significant long-term supply-chain expansion have become less optimistic. Domestic wind sector employment reached a new high of 105,500 full-time workers in 2017. Moreover, the profitability of turbine suppliers has generally been strong over the last four years. Although there have been a number of plant closures over the last 5 years, the three major turbine manufacturers serving the U.S. market have domestic manufacturing facilities. Domestic nacelle assembly capability stood at roughly 11.7 GW in 2017, and the United States had the capability to produce blades and towers sufficient for approximately 8.9 GW and 7.4 GW, respectively, of wind capacity annually. The domestic supply chain faces conflicting pressures, including significant near-term growth, but also strong competitive pressures and an anticipation of reduced demand as the PTC is phased out. Domestic manufacturing content is strong for some wind turbine components, but the U.S. wind industry remains reliant on imports. The United States is reliant on imports of wind equipment from a wide array of countries, with the level of dependence varying by component. Domestic manufacturing content is highest for nacelle assembly 85, towers 70–90, and blades and hubs 50–70. The project finance environment remained strong in 2017. The U.S. wind market raised 6 billion of new tax equity in 2017, on par with the three prior years. Project-level debt finance decreased to 2.5 billion. Tax equity yields held at just below 8 in unlevered, after-tax terms, while the cost of term debt hovered around 4 for much of the year, before pushing higher during the first half of 2018. Looking ahead, 2018 should be another busy year, given the abundant backlog of turbines that met safe- harbor requirements to qualify for 100 PTC, along with another reported 10 GW of safe-harbored turbines at 80 PTC, still to be deployed. Independent power producers own the vast majority of wind assets built in 2017. IPPs own 91 of the new wind capacity installed in the United States in 2017, with the remaining assets owned by investor-owned utilities 9 and other entities 1. Long-term contracted sales to utilities remained the most common off-take arrangement, but direct retail sales and merchant off-take arrangements were both significant. Electric utilities continued to be the largest off-takers of wind power in 2017, either owning wind projects 9 or buying electricity from projects 36 that, in total, represent 45 of the new capacity installed in 2017. Direct retail purchasersincluding corporate off-takersaccount for 24. Merchant/quasi-merchant projects 20 and power marketers 6 make up the remainder with 5 undisclosed. Technology Trends Average turbine capacity, rotor diameter, and hub height increased in 2017, continuing the long- term trend. To optimize wind power project cost and perance, turbines continue to grow in size. The average rated nameplate capacity of newly installed wind turbines in the United States in 2017 was 2.32 MW, up 8 from the previous year and 224 since 1998−1999. The average rotor diameter in 2017 was 113 meters, a 4 increase over the previous year and a 135 boost over 1998−1999, while the average hub height in 2017 was 86 meters, up 4 over the previous year and 54 since 1998−1999. Growth in average rotor diameter and turbine nameplate capacity have outpaced growth in average hub height over the last two decades. Rotor scaling has been especially significant in recent 2017 Wind Technologies Market Report ix years. In 2008, no turbines employed rotors that were 100 meters in diameter or larger; in contrast, by 2017, 99 of newly installed turbines featured rotors of at least that diameter, with 80 of newly installed turbines featuring rotor diameters of greater than 110 meters, and 14 greater than or equal to 120 meters. Turbines originally designed for lower wind speed sites have rapidly gained market share, and are being deployed in a range of wind resource conditions. With growth in swept rotor area outpacing growth in nameplate capacity, there has been a decline in the average “specific power”1in W/m 2 , from 394 W/m 2among projects installed in 1998–1999 to 231 W/m 2among projects installed in 2017. In general, turbines with low specific power were originally designed for lower wind speed sites. Another indication of the increasing prence of lower wind speed turbines is that, in 2017, the overwhelming majority of new installations used IEC Class 3 and Class 2/3 turbinesturbines specifically certified for lower wind speed sites. Wind turbines were deployed in somewhat lower wind-speed sites in 2017 in comparison to the previous three years. With an estimated long-term average wind speed of 7.7 meters per second at a height of 80 meters above the ground, wind turbines installed in 2017 were located in lower wind-speed sites than in the previous three years; however, the 2017 average exceeds that for turbines installed from 2009 to 2013. Federal Aviation Administration data suggest that near-future wind projects will be located in similar or slightly better wind resource areas than those installed in 2017. Low specific power turbines continue to be deployed in both lower and higher wind speed sites; taller towers predominate in the Great Lakes and Northeast. Low specific power and IEC Class 3 and 2/3 turbines continue to be employed in all regions of the United States, and at both lower and higher wind speed sites. In parts of the Interior region, in particular, turbines designed for lower wind speeds continue to be deployed across a wide range of resource conditions. Meanwhile, the tallest towers continue to be deployed in the Great Lakes and Northeastern regions, in lower wind speed sites, with specific location decisions likely driven by the wind profile at the site. Wind power projects planned for the near future continue the trend of ever-taller turbines. Federal Aviation Administration permit data suggest that near-future wind projects will deploy progressively taller turbines, with a significant portion 35 of permit applications in early 2018 over 500 feet. A large number of wind power projects continued to employ multiple turbine configurations from a single turbine supplier. Nearly a quarter of the larger wind power projects built in 2016 and 2017 utilized turbines with multiple hub heights, rotor diameters and/or capacitiesall supplied by the same original equipment manufacturer OEM. This development may reflect increasing sophistication with respect to turbine siting and wake effects, coupled with an increasing willingness among turbine suppliers to provide multiple turbine configurations, leading to increased site optimization. Turbines that were partially repowered in 2017 now have significantly larger rotors and correspondingly lower specific power ratings. In 2017, 1,317 turbines totaling 2,131 MW of capacity were partially repowered. Larger rotors were installed on all of these repowered turbines, with an average increase of 12 meters, while only 10 saw increases in rated capacity. On average, these changes resulted in a 25 decrease in specific power, from 335 W/m 2to 252 W/m 2 . All of these turbines had been in service for just 9–14 years prior to being repowered, with the primary motivation for partial repowering being to increase operation