Summary

Imagine a time when over half of our power generation is supplied by renewable and sustaining sources of energy. In this imagined time there are ample assets ready and available to generate additional energy.

Wind generation is an important part of renewable power generation and part of the solution for achieving this goal.

Wind generation currently provides one of the largest opportunities to improve renewable energy utilization, create new local jobs and expand affordability to those who leverage it. Part of working to this future is combining storage and orchestration technology to provide significant improvement in real dollars. This combination will also support social goals in clean energy. In addition, these improvements can be implemented for all without the need for additional investment for additional wind power generation. The good news is that we don’t have to wait for an imagined day, all of the required technology and storage is available now, waiting for the right people to integrate technology and wind power generation to build for the future.

Current Wind Generation Statistics

Today, the US has is generating 150¹ gigawatts (GW) of wind power. Based on current plans, this amount has the potential to double in the next five years. As the amount of power is increased, there will be increased requirements for storage capacity. Right now, there is 31.5² GW of storage available to store or charge this energy during non-peak hours. The storage capacity for wind power is also expected to double in the next five years. 

Wind is often being sited with battery storage today.  Some examples of hybrid of 4.4 GW paired with 1.1 GW of storage³.  Wind utilization is approximately 33% to 40%⁴.  This deployment provides an opportunity to increase this utilization as wind energy and pairing continues to increase.  Working with behind-the-meter (BTM) aggregation, grid intelligence and storage technology to potentially add 20-40%⁵ of additional utilization of existing wind generation.  These additions are equivalent to adding 6-12 gigawatts of new generation without building new infrastructure to support it⁶.  This is limited by the amount of storage available today.

Investment Opportunity in Next 5 Years

Implementing an efficient, affordable and resilient integration of existing technology and power generation facilities provides tremendous investment opportunities for utilities, local governments and aggregators. With key investments in integration, it can be used to drive simple value by taking greater advantage of the difference in peak rates and non-peak rates. Peak rates typically run 40-60% more than non-peak rates. With storage of renewable energy, price arbitrage can be used to profit from buying non-peak power and selling or using this energy during peak hours.

Added benefits for customers from this implementation allow them to switch to using their stored energy during peak hours and avoid paying peak rates during that time. For the energy providers, the savings can yield healthy payback on the storage investment of 5 years or less.

The key to realizing the full value of investment it to make use of existing technology and power generation. There are many current and emerging behind the meter (BTM) such as energy management systems (EMS) for buildings that can optimize these savings. Combining these solutions with non-wire technology such as advance meter with grid edge intelligence can optimize these savings.

The investment can also benefit all of a community, adding to the appeal for support of the utility customers. On the economic development front it adds local jobs and advances new skillsets for communities to have more control over their energy and costs. Municipalities that have clean energy objectives can also see a return on greenhouse gas reductions that can exceed $68⁷ a metric ton in carbon. In some states that have cap and trade regulations this supports real financial returns.

Utilities also benefit by shifting additional load during off peak rates to take advantage of any contracts they have purchased or leverage their own investment in their wind assets. Gaining additional utilization from these assets increases their rate of return. This reduces any fuel exposure which usually is 30-35% of the cost to generate electricity compared to wind’s fuels which is free.

In addition, most utilities also have greenhouse gas objectives and can count this energy for those goals. And in some states regulators allow rate recovery on these assets. All of these benefits can be used to get buy-in from multiple parts of the community and reduce the time to implementation and realization of the investment profits.

Challenges to Full Potential of Wind Energy

Based on analysis, there appears to be a great deal of promise in implementing these methods to better manage current wind utilization. Yet the industry has been slow to adopt these changes. There are 4 main challenges in unlocking this value stream as follows:

• Land – Additional land is needed for storage of energy.
• Cost – The current cost of real estate, battery costs and installation make it an issue to finance with a short payback.
• Orchestration of wind with BTM assets and utility system operators – With the need for additional land and the cost there hasn’t been incentive to implement improvements in BTM technology.
• Regulatory Incentives – Current regulations are slow to change so that they encourage development of renewable energy sources such as wind.

The following sections expand out these challenges to realizing the full potential of wind energy.

Land

Since battery storage requires land, this is a limiting factor for growth.  When looking at the problem, there are potential solutions by focusing on commercial and government facilities as places to store these batteries. Residential battery pack systems are an expensive solution, so the use of commercial and government facilities can offer more cost-effective solutions.  Government facilities can provide a fast path as most government entities such as counties, cities, school, and transit districts have a lot of community owned buildings that could also house battery storage.  If designed correctly it can also be stable and resilient asset to the community.

Cost

Cost is also a large factor in implementing solutions for better utilization. Current residential battery pack systems can cost $15,000-$18,000 for a small 5-10 kwh battery pack solution. This breaks down to a cost of $1500 to $2000 per kilowatt hour (kwh). By focusing on commercial and government facilities they offer the best opportunities for expansion due to the ability to reduce costs due to purchasing at scale. As an example, even a small commercial building would likely need 50 kwh and a medium size would use between 100-300 kwh solutions. With these larger installations, the cost can be reduced by 50-75% per kwh.

Orchestration of Wind with BTM Assets and Utility System Operators

Orchestration is key as wind, like other renewables, varies in output depending on the time of day and weather conditions. This input has to be matched with demand signals from a BTM aggregator. The BTM aggregator would use a utilities Distribution Energy Resource Management System (DERMS) and Advance Distribution Management Systems (ADMS) to balance supply and demand at any given moment.  Grid intelligence would be built in existing advance metering infrastructure to provide an option for better management of this variable energy source. Algorithms would be built to reduce the latency or time needed to dispatch or discharge energy at optimal times.  To increase the implementation and adoption of this technology, incentives can be provided for suppliers of these technologies to encourage quicker adoption.

Regulatory Incentives

Finally state energy offices and policy makers have a role in developing the proper performance-based rates (PBR) incentives for utilities and communities to take the risk. These incentives would help to balance out the risk of implementing these technologies and maturing these types of solutions. In addition, incentives can be set up to encourage support of established community benefit indicators. These community benefit indicators would be used for metrics for improvement in affordability, clean, and resilient energy. The intent is to have regulations that support investment and profit while also supporting communities using the energy resulting from the investments. States like Washington, Hawaii, California and other forward-thinking states are actively looking at the right policy mix to encourage and incentivize the industry to meet these key objectives.

Non-Financial Value Consideration

Working to support government, energy companies and individuals to work together while increasing the usage of wind energy provides other intangible benefits to local communities. These benefits include creating local jobs to maintain these assets, share and support energy equitably for disadvantaged community members. A well planned and collaborative effort offers the opportunity for communities to come together to solve their community energy needs in an affordable, clean and resilient manner. It supports and provides a path forward for communities to build for future generations.

Conclusion

The current utility and energy sector is struggling with implementing and obtaining these goals and objectives. This opens opportunities for those who can pull together solutions and different entities to work for a common solution. The end solution can be designed and implemented so it is a win-win solution for all parts of investors, utilities, municipalities and consumers. Innovation and collaboration are key to achieving the best solutions in the utility and energy sector. By taking action now, the solutions can work to minimize increasing costs for communities and future generations while building resilient solutions that will work in a rapidly changing world.

Glossary

• ADMS – Advance Distribution Management Systems
• BTM – Behind-the-Meter
• DERMS – Distribution Energy Resource Management System
• Orchestration – Orchestration is coordinating the demand available behind the meter with the supply that grid operator are managing at the utilities. Utilities use software such DERMS plus advance distribution management systems (this is where the signals are matched with the operators see as available or contracted supply.
• PBR – Performance-Based Rates

1. U.S. Energy Information Administration.  Installed wind power generating capacity has increased substantially in the United States over the last 25 years, growing from 2.4 gigawatts (GW) in 2000 to 150.1 GW in April 2024. ↩︎
2. According to the Business Council for Sustainable Energy’s Sustainable Energy in America 2025 Factbook. ↩︎
3. Berkley Lab Land Based Market Report 2024 Edition “There were 46 hybrid wind power plants in operation at the end of 2023 representing 4.1 GW of wind and 1.1” ↩︎
4. U.S. Energy Information Administration.  Electricity generation from wind turbines also grew steadily, at a similar rate to capacity, until 2023. Last year, the average utilization rate, or capacity factor, of the wind turbine fleet fell to an eight-year low of 33.5% (compared with 35.9% in 2022, the all-time high). ↩︎
5. National Renewal Energy Lab Hybrid renewable energy systems: The value of storage as a function of PV-wind variability.(September 2023)  “We found that coupling PV, wind, and battery technologies allows for more effective utilization of interconnection capacity by increasing capacity factors to 60%–80%+” ↩︎
6. National Renewable Energy Laboratory, Appalachian State University PA Knowledge, Hybrid Distributed Wind and Battery Energy Storage Systems (June 2022) “If the hybrid plant is self-scheduled, it needs an algorithm to use forecasts of distributed wind and prices to dispatch the hybrid wind and storage, considering the maximal utilization of the storage SOC for multiple look-ahead periods” ↩︎
7. Washington State Transportation and Utilities Commission Social Cost of Carbon https://www.utc.wa.gov/regulated-industries/utilities/energy/conservation-and-renewable-energy-overview/clean-energy-transformation-act/social-cost-carbon ↩︎