ABOUT KITE GEN

Kite Gen is the brand for the new wind generation technology created by Kite Gen Research.

Kite Gen wants to offer more efficient solutions to the severe energy shortage of the planet: cheap renewable energy, in large quantity, with no GHG emission and low land use.

Founded in 2007, Kite Gen Research is a privately held company, with headquarters in Milan. Our vision for tomorrow's wind energy is truly international. To help achieve this vision, we want to bring together some of the best scientists and talents in business and technology.

Growth and cost trends

Wind and hydroelectric power generation have negligible fuel costs and relatively low maintenance costs; in economic terms, wind power has a low marginal cost and a high proportion of capital cost. The estimated average cost per unit incorporates the cost of construction of the turbine and transmission facilities, borrowed funds, return to investors (including cost of risk), estimated annual production, and other components, averaged over the projected useful life of the equipment, which may be in excess of twenty years. Energy cost estimates are highly dependent on these assumptions so published cost figures can differ substantially. A British Wind Energy Association report gives an average generation cost of onshore wind power of around 3.2 pence per kilowatt hour (2005). Cost per unit of energy produced was estimated in 2006 to be comparable to the cost of new generating capacity in the United States for coal and natural gas: wind cost was estimated at $55.80 per MWh, coal at $53.10/MWh and natural gas at $52.50. Other sources in various studies have estimated wind to be more expensive than other sources (see Economics of new nuclear power plants, Clean coal, and Carbon capture and storage).

In 2004, wind energy cost one-fifth of what it did in the 1980s, and some expected that downward trend to continue as larger multi-megawatt turbines were mass-produced. However, installed cost averaged €1,300 per kilowatt in 2007, compared to €1,100 per kilowatt in 2005. Not as many facilities can produce large modern turbines and their towers and foundations, so constraints develop in the supply of turbines resulting in higher costs. Research from a wide variety of sources in various countries shows that support for wind power is consistently between 70 and 80 percent amongst the general public.

Global Wind Energy Council (GWEC) figures show that 2007 recorded an increase of installed capacity of 20 GW, taking the total installed wind energy capacity to 94 GW, up from 74 GW in 2006. Despite constraints facing supply chains for wind turbines, the annual market for wind continued to increase at an estimated rate of 31% following 32% growth in 2006. In terms of economic value, the wind energy sector has become one of the important players in the energy markets, with the total value of new generating equipment installed in 2007 reaching €25 billion, or US$36 billion.

Existing generation capacity represents sunk costs, and the decision to continue production will depend on marginal costs going forward, not estimated average costs at project inception. For example, the estimated cost of new wind power capacity may be lower than that for "new coal" (estimated average costs for new generation capacity) but higher than for "old coal" (marginal cost of production for existing capacity). Therefore, the choice to increase wind capacity will depend on factors including the profile of existing generation capacity.

Theoretical potential

Wind power available in the atmosphere is much greater than current world energy consumption. The most comprehensive study to date found the potential of wind power on land and near-shore to be 72 TW, equivalent to 54,000 MToE (million tons of oil equivalent) per year, or over five times the world's current energy use in all forms. The potential takes into account only locations with mean annual wind speeds ≥ 6.9 m/s at 80 m. It assumes 6 turbines per square km for 77 m diameter, 1.5 MW-turbines on roughly 13% of the total global land area (though that land would also be available for other compatible uses such as farming). The authors acknowledge that many practical barriers would need to be overcome to reach this theoretical capacity.

The practical limit to exploitation of wind power will be set by economic and environmental factors, since the resource available is far larger than any practical means to develop it.

Direct costs

Many potential sites for wind farms are far from demand centres, requiring substantially more money to construct new transmission lines and substations. In some regions this is partly because frequent strong winds themselves have discouraged dense human settlement in especially windy areas. The wind which was historically a nuisance is now becoming a valuable resource, but it may be far from large populations which developed in areas more sheltered from wind.

Since the primary cost of producing wind energy is construction and there are no fuel costs, the average cost of wind energy per unit of production depends on a few key assumptions, such as the cost of capital and years of assumed service. The marginal cost of wind energy once a plant is constructed is usually less than 1 cent per kilowatt-hour. Since the cost of capital plays a large part in projected cost, risk (as perceived by investors) will affect projected costs per unit of electricity. The commercial viability of wind power also depen

ds on the pricing regime for power producers. Electricity prices are highly regulated worldwide, and in many locations may not reflect the full cost of production, let alone indirect subsidies or negative externalities. Customers may enter into long-term pricing contracts for wind to reduce the risk of future pricing changes, thereby ensuring more stable returns for projects at the development stage. These may take the form of standard offer contracts, whereby the system operator undertakes to purchase power from wind at a fixed price for a certain period (perhaps up to a limit); these prices may be different than purchase prices from other sources, and even incorporate an implicit subsidy.

In jurisdictions where the price for electricity is based on market mechanisms, revenue for all producers per unit is higher when their production coincides with periods of higher prices. The profitability of wind farms will therefore be higher if their production schedule coincides with these periods. If wind represents a significant portion of supply, average revenue per unit of production may be lower as more expensive and less-efficient forms of generation, which typically set revenue levels, are displaced from economic dispatch. This may be of particular concern if the output of many wind plants in a market have strong temporal correlation. In economic terms, the marginal revenue of the wind sector as penetration increases may diminish.

External costs

Most forms of energy production create some form of negative externality: costs that are not paid by the producer or consumer of the good. For electric production, the most significant externality is pollution, which imposes social costs in increased health expenses, reduced agricultural productivity, and other problems. In addition, carbon dioxide, a greenhouse gas produced when fossil fuels are burned, may impose even greater costs in the form of global warming. Few mechanisms currently exist to internalise these costs, and the total cost is highly uncertain. Other significant externalities can include military expenditures to ensure access to fossil fuels, remediation of polluted sites, destruction of wild habitat, loss of scenery/tourism, etc.

If the external costs are taken into account, wind energy can be competitive in more cases, as costs have generally decreased due to technology development and scale enlargement. Supporters argue that, once external costs and subsidies to other forms of electrical production are accounted for, wind energy is amongst the least costly forms of electrical production. Critics argue that the level of required subsidies, the small amount of energy needs met, the expense of transmission lines to connect the wind farms to population centers, and the uncertain financial returns to wind projects make it inferior to other energy sources. Intermittency and other characteristics of wind energy also have costs that may rise with higher levels of penetration, and may change the cost-benefit ratio.

Incentives

Wind energy in many jurisdictions receives some financial or other support to encourage its development. A key issue is the comparison to other forms of energy production, and their total cost. Two main points of discussion arise: direct subsidies and externalities for various sources of electricity, including wind. Wind energy benefits from subsidies of various kinds in many jurisdictions, either to increase its attractiveness, or to compensate for subsidies received by other forms of production which have significant negative externalities. In the United States, wind power receives a tax credit for each kilowatt-hour produced; at 1.9 cents per kilowatt-hour in 2006, the credit has a yearly inflationary adjustment. Another tax benefit is accelerated depreciation. Many American states also provide incentives, such as exemption from property tax, mandated purchases, and additional markets for "green credits." Countries such as Canada and Germany also provide incentives for wind turbine construction, such as tax credits or minimum purchase prices for wind generation, with assured grid access (sometimes referred to as feed-in tariffs). These feed-in tariffs are typically set well above average electricity prices. The Energy Improvement and Extension Act of 2008 contains extensions of credits for wind, including microturbines.

Secondary market forces also provide incentives for businesses to use wind-generated power, even if there is a premium price for the electricity. For example, socially responsible manufacturers pay utility companies a premium that goes to subsidize and build new wind power infrastructure. Companies like the Borealis Press print millions of greeting cards every year using this wind-generated power, and in return they can claim that they are making a powerful "green" effort, in addition to using recycled, chlorine-free paper, soy inks, and safe press wash. The organization Green-e http://www.green-e.org monitors business compliance with these renewable energy credits.

Small scale wind power is the name given to wind generation systems with the capacity to produce 50 kW or less of electrical power. Isolated communities, that otherwise rely on diesel generators, may use wind turbines to displace diesel fuel consumption. Individuals may purchase these systems to reduce or eliminate their dependence on grid electricity for economic or reasons, or to reduce their carbon footprint. Wind turbines have been used for household electricity generation in conjunction with battery storage over many decades in remote areas. Increasingly, U.S. consumers are choosing to purchase grid-connected turbines in the 1 to 10 kilowatt range to power their whole homes. Household generator units of more than 1 kW are now functioning in several countries, and in every state in the U.S. Grid-connected wind turbines may use grid energy storage, displacing purchased energy with local production when available. Off-grid system users can either adapt to intermittent power or use batteries, photovoltaic or diesel systems to supplement the wind turbine. In urban locations, where it is difficult to obtain predictable or large amounts of wind energy (little is known about the actual wind resource of towns and cities), smaller systems may still be used to run low power equipment. Equipment such as parking meters or wireless internet gateways may be powered by a wind turbine that charges a small battery, replacing the need for a connection to the power grid, making the potential carbon savings of small wind turbines difficult to determine.

A new Carbon Trust study into the potential of small-scale wind energy has found that small wind turbines could provide up to 1.5 Terawatt Hours (TWh) per year of electricity (0.4% of total UK electricity consumption) and 0.6 million tonnes of carbon dioxide (MtCO2) emission savings. This is based on 10% of households installing turbines at costs competitive with grid electricity, which is currently around 12p per kWh.

Distributed generation from renewable resources is expected grow as a consequence of the increased awareness of climate change. The electronic interfaces required to connect renewable generation units with the utility system can be designed with additional functions such as active filtering which will allow surplus power to be fed back to the grid.

The modern wind power industry began in 1979 with the serial production of wind turbines by Danish manufacturers Kuriant, Vestas, Nordtank, and Bonus. These early turbines were small by today's standards, with capacities of 20 to 30 kW each. Since then, they have increased greatly in size, while wind turbine production has expanded to many countries all over the world. There are now many thousands of wind turbines operating, with a total capacity of 73,904 MW of which wind power in Europe accounts for 65% (2006). Wind power is the fastest growing energy source. World wind generation capacity more than quadrupled between 2000 and 2006. 81% of wind power installations are in the US and Europe, but the share of the top five countries in terms of new installations fell from 71% in 2004 to 62% in 2006. In 2007, the countries with the highest total installed capacity were Germany, the United States, Spain, India, and China (see chart). By 2010, the World Wind Energy Association expects 160GW of capacity to be installed worldwide, up from 73.9 GW at the end of 2006, implying an anticipated net growth rate of more than 21% per year. Denmark generates nearly one-fifth of its electricity with wind turbines -- the highest percentage of any country -- and is fifth in the world in total wind power generation. Denmark is prominent in the manufacturing and use of wind turbines, with a commitment made in the 1970s to eventually produce half of the country's power by wind. In recent years, the United States has added more wind energy to its grid than any other country; U.S. wind power capacity grew by 45% to 16.8 gigawatts in 2007. By mid-2008, U.S. wind power installed nameplate capacity was still second behind Germany's, but the U.S. became the world's largest wind power producer by having better average winds over its wind farms, and thus a higher average capacity factor. Texas has recently surpassed California's installed capacity developed or under construction. In 2007, the state expects to add 2 gigawatts to its existing capacity of approximately 4.5 gigawatts. Iowa and Minnesota are expected to each produce 1 gigawatt by late-200

7. Wind power generation in the U.S. was up 31.8% in February, 2007 from February, 2006. The average output of one megawatt of wind power is equivalent to the average electricity consumption of about 250 American households. According to the American Wind Energy Association, wind will generate enough electricity in 2008 to power just over 1% (4.5 million households) of total electricity in U.S., up from less than 0.1% in 1999. U.S. Department of Energy studies have concluded wind harvested in the Great Plains states of Texas, Kansas, and North Dakota could provide enough electricity to power the entire nation, and that offshore wind farms could do the same job. In addition, the wind resource over and around the Great Lakes, recoverable with currently available technology, could by itself provide 80% as much power as the U.S. and Canada currently generate from non-renewable resources, with Michigan's share alone equating to one third of current U.S. electricity demand.

India ranks 4th in the world with a total wind power capacity of 8,000 MW in 2007, or 3% of all electricity produced in India. The World Wind Energy Conference in New Delhi in November 2006 has given additional impetus to the Indian wind industry. Muppandal village in Tamil Nadu state, India, has several wind turbine farms in its vicinity, and is one of the major wind energy harnessing centres in India led by majors like Suzlon, Vestas, Micon among others.

In 2005, China announced it would build a 1000-megawatt wind farm in Hebei for completion in 2020. China reportedly has set a generating target of 20,000 MW by 2020 from renewable energy sources — it says indigenous wind power could generate up to 253,000 MW. Following the World Wind Energy Conference in November 2004, organised by the Chinese and the World Wind Energy Association, a Chinese renewable energy law was adopted. In late 2005, the Chinese government increased the official wind energy target for the year 2020 from 20 GW to 30 GW. By 2008, wind power was growing faster in China than the government had planned, and indeed faster in percentage terms than in any other large country, having more than doubled each year since 2005. Policymakers doubled their wind power prediction for 2010, after the wind industry reached the original goal of 5 GW three years ahead of schedule. Current trends suggest an actual installed capacity near 20 GW by 2010, with China shortly thereafter pursuing the United States for the world wind power lead.

Mexico recently opened La Venta II wind power project as an important step in reducing Mexico's consumption of fossil fuels. The 88 MW project is the first of its kind in Mexico, and will provide 13 percent of the electricity needs of the state of Oaxaca. By 2012 the project will have a capacity of 3500 MW.

Another growing market is Brazil, with a wind potential of 143 GW. The federal government has created an incentive program, called Proinfa, to build production capacity of 3300 MW of renewable energy for 2008, of which 1422 MW through wind energy. The program seeks to produce 10% of Brazilian electricity through renewable sources.

South Africa has a proposed station situated on the West Coast north of the Olifants River mouth near the town of Koekenaap, east of Vredendal in the Western Cape province. The station is proposed to have a total output of 100MW although there are negotiations to double this capacity. The plant could be operational by 2010.

France has announced a target of 12,500 MW installed by 2010.

Canada experienced rapid growth of wind capacity between 2000 and 2006, with total installed capacity increasing from 137 MW to 1,451 MW, and showing an annual growth rate of 38%. Particularly rapid growth was seen in 2006, with total capacity doubling from the 684 MW at end-2005. This growth was fed by measures including installation targets, economic incentives and political support. For example, the Ontario government announced that it will introduce a feed-in tariff for wind power, referred to as 'Standard Offer Contracts', which may boost the wind industry across the province. In Quebec, the provincially-owned electric utility plans to purchase an additional 2000 MW by 2013.

ps: click here to view the rank of installed windpower capacity

As of 2008^[update], Europe leads the world in development of offshore wind power, due to strong wind resources and shallow water in the North Sea and the Baltic Sea, and limitations on suitable locations on land due to dense populations and existing developments. Denmark installed the first offshore wind farms, and for years was the world leader in offshore wind power until the United Kingdom gained the lead in October, 2008 with 590 MW of nameplate capacity installed. The United Kingdom planned to build much more extensive offshore wind farms by 2020. Other large markets for wind power, including the United States and China focused first on developing their on-land wind resources where construction costs are lower (such as in the Great Plains of the U.S., and the similarly wind-swept steppes of Xinjiang and Inner Mongolia in China), but population centers along coastlines in many parts of the world are close to offshore wind resources, which would reduce transmission costs.

On 21 December 2007, Q7 (later renamed as Princess Amalia Wind Farm) exported first power to the Dutch grid, which was a milestone for the offshore wind industry. The 120MW offshore wind farm with a construction budget of €383 million was the first to be financed by a nonrecourse loan (project finance). The project comprises 60 Vestas V80-2MW wind turbines. Each turbine's tower rests on a monopile foundation to a depth of between 18-23 meters at a distance of about 23 km off the Dutch coast.

Transporting large wind turbine components (tower sections, nacelles, and blades) is much easier over water than on land, because ships and barges can handle large loads more easily than trucks/lorries or trains. On land, large goods vehicles must negotiate bends on roadways, which fixes the maximum length of a wind turbine blade that can move from point to point on the road network; no such limitation exists for transport on open water. Construction and maintenance costs per wind turbine are higher for offshore wind farms, motivating operators to reduce the number of wind turbines for a given total power by installing the largest available units. An example is Belgium's Thorntonbank Wind Farm with construction underway in 2008, featuring 5MW wind turbines from REpower, which were among the largest wind turbines in the world at the time.