Detailed Information on the
Wind Energy Assessment

Develop guidance that specifies a consistent framework for analyzing the costs and benefits of research and development investments, and use this information to guide budget decisions.

Update and enhance methodology used to evaluate R&D goals, incorporating explicit risk analysis and industry data.

Continue emphasis on wind technology development for low wind-speed areas.

Provide funding consistent with meeting performance targets by redirecting funds from low-priority earmarks.

Focus on improving performance of outreach activities that promote commercial development of wind power, and consider new measures to assess performance.

Measure: Modeled cost of wind power in Class 4 wind speed areas (i.e., 13 mph annual average wind speed at 33 feet above ground), in cents per kilowatt-hour (??/kWh).

Explanation:Reducing cost of wind power diminishes a major barrier to domestic use of wind energy resources, which will contribute to the Department's goal of increased domestic energy supplies. When cost of energy assessments are not available from actual prototype turbine systems developed through the program's partnerships, annual cost of energy improvements will be based on expert assessment of R&D and partners' progress to provide needed input for turbine system cost modeling. The 2001 baseline is based on conversion of pre-existing Class 6 wind speed turbine data.

Measure: Cost of wind power for residential-sized (3 to 10 kilowatt) distributed energy applications in Class 3 wind speed areas (i.e., 12 mph annual average wind speed at 33 feet above ground), in cents per kilowatt-hour (??/kWh).

Explanation:Reducing cost of wind power can help increase domestic use of wind energy resources, which will contribute to the Department's goal of increased domestic energy supplies. When cost of energy assessments are not available from actual prototype turbine systems developed through the program's partnerships, annual cost of energy improvements will be based on expert assessment of R&D and partners' progress to provide needed input for turbine system cost modeling.

Measure: Number of States with at least 100 megawatts (MW) of wind power capacity installed

Explanation:This measure tracks success of program outreach activities. As wind capacity in a state approaches the 100 MW scale, the scale of investment enters a new regime in the financial community, and utilities must account for the effects of variable generation. Reaching 100 MW installed capacity threshold shows that wind is being accepted as a true large-scale generating option by the State's utilities, regulators, and investors, and thus can further contribute to the DOE goal of increased domestic energy supply.

Measure: Modeled cost of wind power in Class 6 wind speed areas (i.e., 15 mph annual average wind speed at 33 feet above ground) for shallow offshore systems, in cents per kilowatt-hour (??/kWh)

Explanation:Reducing cost of wind power diminishes a major barrier to domestic use of wind energy resources, which will contribute to the Department's goal of increased domestic energy supplies. When cost of energy assessments are not available from actual prototype turbine systems developed through the program's partnerships, annual cost of energy improvements will be based on expert assessment of R&D and partners' progress to provide needed input for turbine system cost modeling.

Measure: Cost of wind power for commercial-sized (100 kilowatt) distributed energy applications in Class 3 wind speed areas (i.e., 12 mph annual average wind speed at 33 feet above ground), in cents per kilowatt-hour (??/kWh).

Explanation:Reducing cost of wind power can help increase domestic use of wind energy resources, which will contribute to the Department's goal of increased domestic energy supplies. When cost of energy assessments are not available from actual prototype turbine systems developed through the program's partnerships, annual cost of energy improvements will be based on expert assessment of R&D and partners' progress to provide needed input for turbine system cost modeling. Targets represent low end of cost range.

Measure: Cost of wind power in Class 6 wind speed areas (i.e., 15 mph annual average wind speed at 33 feet above ground), in cents per kilowatt-hour (??/kWh).

Explanation:Reducing cost of wind power can help increase domestic use of wind energy resources, which will contribute to the Department's goal of increased domestic energy supplies. When cost of energy assessments are not available from actual prototype turbine systems developed through the program's partnerships, annual cost of energy improvements will be based on expert assessment of R&D and partners' progress to provide needed input for turbine system cost modeling. This activity was completely "graduated" to the private sector when the 2004 target was achieved.

Measure: Administrative costs as a percent of total program costs (%). (New measure, added February 2008)

Explanation:This "overhead rate" measure is not a true efficiency measure but is a meaningful surrogate used for all DOE applied R&D and related programs. The objective is to maintain a reasonable overhead rate for effective operation while ensuring that the vast majority of funds address the program purpose. Administrative costs include all Program Direction and Program Support costs plus costs for supporting activities and analysis funded through programmatic appropriations. The targets and actuals represent corporate figures (i.e., for the entire Office of Energy Efficiency and Renewable Energy) because some EERE Program Direction costs are difficult to parse at the program level in a meaningful way. Appropriation levels for EERE programs and for EERE Program Direction directly affect whether the target is achieved. The baseline and targets for this measure are under development.

Is the program purpose clear?

Explanation: The wind energy program conducts research and development to enhance the level of technology development and deployment of wind energy systems. The wind energy program leads the Nation's efforts to improve wind energy technology through public/private partnerships that enhance domestic economic benefit from wind power development, and to coordinate with stakeholders on activities that address barriers to the use of wind energy.

Evidence: FY 2004 Budget; Program first authorized in 1975 by P.L. 94-163, "Energy Policy and Conservation Act" (EPCA). At least six subsequent public laws relevant to program authorization or purpose.

Does the program address a specific and existing problem, interest, or need?

Explanation: The program aims to expand the use of wind energy, which can increase domestic energy supplies and avoid emissions of pollutants and greenhouse gases associated with conventional methods of power production. These potential benefits support the Administration's National Energy Policy, as well as the Administration's climate change goals. The wind energy program specifically targets activities that address the barriers - energy cost, energy market rules and infrastructure, and energy sector acceptance - to wind power competing without disadvantage to serve the Nation's energy needs.

Evidence: The program focuses R&D on activities that it considers too technologically risky for the private sector to undertake alone. Risk levels vary on a project-by project basis.

Is the program designed so that it is not redundant or duplicative of any Federal, state, local or private effort?

Explanation: The program coordinates with States and industry to develop R&D roadmaps for guiding research, and has jointly funded several projects that respond to Federal program national objectives as well as State-level interests. No other Federal programs support R&D on wind power.

Evidence: The program considers the following factors as market barriers to sufficient private sector investment in wind R&D: market uncertainty from electric restructuring; inability of small businesses to afford full costs of R&D; externalities (i.e. environmental, energy security, and price stability) whose benefits are not captured in the marketplace.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: A federal wind energy production tax credit (PTC) is in place until the end of 2003 that is currently highly influential in the rate of U.S. wind power development. While extension of the tax credit may obviate the need for further research in high wind speed areas, the tax credit will not affect commercial viability of low wind speed and distributed generation wind energy technologies, which the program currently focuses on and which are not yet cost competitive.

Evidence: There is no evidence that a production tax credit is a more cost effective approach to advancing development and deployment of wind technologies.

Is the program effectively targeted, so program resources reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: The wind program primarily provides funding to leverage R&D dollars through public/private partnerships with U.S. based wind companies and key energy sector partners, both public (e.g., States, federal power administrations) and private. In support of the Administration's R&D Investment Criteria initiative, the program was asked to prepare "bubble charts" that plot key program variables (e.g., expected public benefits, funding levels, years to commercialization). Bubble charts can serve as an informational tool to help determine, along with other considerations, whether the program appropriately targets its R&D funding. While the program has made progress estimating public benefits, the Department has not yet developed a methodology to estimate benefits consistently within and across programs. Therefore, the program could not prepare meaningful bubble charts.

Evidence: While unable to prepare bubble charts, the program did estimate years to commercialization for each of the major R&D activities within the program: low wind speed turbines - 9 years (2012); distributed wind turbines - 4 years (2007); systems integration components - 7 years (2010). The program's estimates have not been peer reviewed. In general, the program appears to target its resources wisely, but a lack of ability to provide appropriate evidence mandates a "no" response. EERE continues to work internally and with other DOE program offices to improve consistency and accuracy in estimating benefits.

Does the program effectively articulate potential public benefits?

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Evidence:  

If an industry-related problem, can the program explain how the market fails to motivate private investment?

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Evidence:  

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The program has defined four long-term goals that directly support reducing the cost of wind energy, which can increase deployment and thus ties to the Department's outcome objectives of increased domestic energy production and reduced emissions of pollutants and greenhouse gases (from conventional power production).

Evidence: FY 2004 Budget. Wind Energy Program DRAFT Multi-Year Technical Plan (2003).

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The program strategy for achieving its long-term targets centers on a series of phased public-private partnerships for concept studies, component, and system development, each structured with periodic review against analytically-based criteria to verify performance needed for contribution to the overall portfolio. Periodic review points include completion of preliminary design, final design, testing of major components such as blades and drivetrains, test readiness reviews, and prototype test result reviews. These review points provide input for adjusting resource allocations within the portfolio, as well as serving as potential off-ramps for each partnership activity. Supporting research activities are also subjected to periodic critical assessment and prioritization based on criteria developed via the low wind speed technology development pathways analysis. All of the program's current goals and associated program elements inherently define termination points for all of the program's activities by virtue of specific performance targets to be achieved by definite dates.

Evidence: Wind Energy Program DRAFT Multi-Year Technical Plan (2003). FY 2003 Program Execution Plan.

Does the program have a limited number of specific annual performance measures that demonstrate progress toward achieving the program's long-term measures?

Explanation: The program has identified annual cost of energy targets that tie directly to its long-term cost of energy targets. While the key annual measures for the program have been defined, other measures concerning systems integration R&D and outreach activities are still under development.

Evidence: FY 2002 Annual Operating Plan. FY03 Wind and Hydropower Technologies Program Execution Plan (PEP).

Does the program have baselines and ambitious targets and timeframes for its annual measures?

Explanation: Targets for cost of energy - the key measure - seem reasonably ambitious. Measures and targets for systems integration R&D and outreach activities are under development.

Evidence: Wind Energy Program DRAFT Multi-Year Technical Plan (2003).

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, etc.) commit to and work toward the annual and/or long-term goals of the program?

Explanation: All program funding participants recipients commit to goals stipulated in the Program Execution Plan (PEP), which defines plans for all funded program activities, including the program's Laboratories, addressed by their Annual Operating Plans (AOPs). The program performance goals are reflected in all contractor and sub-contractor requirements. The National Renewable Energy Laboratory (NREL) and the Sandia National Laboratory (Sandia) are rated annually according to performance in attaining program milestones, as well as other requirements under the operating contracts. Projects are subject to semi-annual or annual reviews and status reports to assess progress toward meeting these long-term goals.

Evidence: FY03 Wind and Hydropower Technologies Program Execution Plan (PEP), Solicitation RFP's and financial assistance agreements (explicitly or via statements of work tailored to support program strategies to achieve goals).

Are independent and quality evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The program uses a formal peer and industry stakeholder review process to benefit from the guidance of industry and the research community, and to provide an outside view of the program. Both the technical assessment and peer review provide inputs that the Program Management Team considers in making decisions about strategic program directions and funding priorities. The wind program also has an on-going Technical Assessment activity -- to monitor the current status of wind technology and progress in achieving program cost goals, to evaluate that status within the context of the needs of the marketplace, and to identify technological pathways that will lead to wind's successful competition in the marketplace.

Evidence: US DOE Wind Energy Program FY2002 Peer Review and Stakeholder Report, December 2002. US DOE Wind Energy Program FY 2001 Peer Review. (Full description of the peer/stakeholder review and technology assessment/pathways analysis process is provided in the Wind Energy Multi-year Technical Plan and Annual Program Execution Plan.)

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: All program activities described in the program's budget (except systems integration and outreach activities, such as "Windpowering America") can be linked with an acceptable annual target and, in turn, a longer-term program goal. However, budget documents do not clearly indicate the full costs of achieving the program goals. Salaries, benefits, and other admininstrative expenses to support the program are included in a separate budgetary line item ("Program Direction"). EERE does not report the allocation of Program Direction funding to the various programs it supports.

Evidence: FY 2004 Budget.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The program has established a Multi-Year Technical Plan. The program conducts three meetings per year to assure peer and industry involvement and feedback. The March meeting is devoted to strategic planning, and it is timed directly in advance of initial planning and development for the upcoming budget year. This meeting is followed by the May/June meeting, when the sub-program holds its formal peer review. During the summer, peer review efforts are incorporated into the portfolio evaluation effort. In the Fall, the sub-program reconvenes the peer review team to reach an understanding about program priorities and direction.

Evidence: US DOE Wind Energy Program FY2002 Peer Review and Stakeholder Report, December 2002. Wind Energy Program DRAFT Multi-Year Technical Plan (2003).

If applicable, does the program assess and compare the potential benefits of efforts within the program to other efforts that have similar goals?

Explanation: Each year, the program estimates the public benefits of its activities in support of the Government Performance and Results Act (GPRA) and the Administration's R&D Investment Criteria initiative. However, the program has not yet developed a consistent and reliable methodology for comparing potential benefits within and across programs with similar goals.

Evidence: FY 2004 Congressional Budget Justification materials.

Does the program use a prioritization process to guide budget requests and funding decisions?

Explanation: The wind program uses a technical assessment process, in conjunction with formal and routine expert, peer, and stakeholder review and input, that ensures that research activities can be demonstrated to have a direct link to achieving the highest priority objectives and goals of the Wind Program. The program participated in an EERE-wide zero-based budget exercise in which priorities at the activity level were clearly laid out.

Evidence: The technical assessment process consists of three steps: Step 1 focuses on identifying areas of possible cost reduction or performance enhancements to the baseline configuration. These areas are then further assessed to quantify their potential contribution to improving the technology's cost-effectiveness. Step 2 focuses on identifying research activities that would be necessary to achieve the technology improvement opportunities identified in Step 1. Activities with the highest potential contribution are given the highest funding and management priority, intangibles relative to benefits are factored into prioritization and include several of the R&D criteria, e.g risks, barriers, and years to commercialization. Step 3 focuses on using the prioritized list from Step 2 to formulate the program's research plan over the planning horizon. Wind Energy Program Multi-Year Technical Plan, Wind Program 2002 Peer Review and Stakeholder Report (December 2002). EERE Priority Ranking Tool, Zero Based Budget Exercise.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The EERE Strategic Management System -- which establishes at the beginning of each fiscal year an 18-month schedule for key planning, budget formulation, budget execution, and analysis / evaluation functions -- requires that each EERE program establish and track long-term and near-term program performance goals and measures. Program results as evaluated through the goals and measures are used annually and throughout the year to assess partners' performance, adjust funding, and re-align R&D portfolios. At the program level, recent examples of management action include early closeout of two Next Generation Turbine public-private partnerships. In one case, the partner had achieved sufficient progress toward the project cost of energy goal prior to the final prototype development stage. In the second case, the partner could not provide sufficient evidence of cost reduction progress to warrant continuing, particularly in light of technical setbacks.

Evidence: SMS Implementation Letter for FY 2002 - 2005 (October 2001). Joule correspondence documenting management action on the early closeout of Next Generation Turbine projects. In general, milestones in the Department's Joule system are not necessarily meaningful or fully reflective of program progress. Thus, the Department's Joule system provides little value-added. The new I-MANAGE system, currently under development, will better integrate budget and performance.

Are Federal managers and program partners (grantees, subgrantees, contractors, cost-sharing partners, etc.) held accountable for cost, schedule and performance results?

Explanation: The Annual Performance Appraisals of all EERE Program Managers include criteria directly related to cost, schedule, and performance results. EERE reviews these criteria monthly in the EERE Monthly Management Reviews. Most EERE contracts include award fee and other performance criteria to hold those partners accountable.

Evidence: Performance Plan and Performance Appraisal Form for Performance Management System Employees. EERE Award Fee and Performance Based contracts.

Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Each year, the program develops an Annual Operating Plan, which is reviewed internally to ensure that new funding is planned to be obligated consistent with the appropriated purpose. EERE also develops a Spend Plan for all of its programs. The program uses data from Departmental procurement and financial systems -- and similar data from National Laboratory partners -- to assure that actual expenditures occur for intended purposes and on a schedule consistent with the Spend Plan. Unobligated balances brought forward to FY 2004 were $48,000, less than one percent of the program's FY 2003 appropriation of approximately $41 million.

Evidence: FY 2003 Annual Operating Plan. Wind Technology Program FY 2003 Financial Status Report (June 2003). FY 2004 Apportionment. FY 2003 Spend Plan.

Does the program have procedures (e.g., competitive sourcing/cost comparisons, IT improvements, approporaite incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: EERE's reorganization in 2002 clarified lines of responsibility and eliminated organizational "stovepipes" by consolidating planning, budgeting, and analysis into a single business administration office. The reorganization reduced management layers, although staff levels remained the same. EERE developed a new IT report to improve program managers' access to EERE cost, obligation, and procurement data. EERE plans to consolidate several legacy IT systems into a single program management system that is intended to track all required information on a project by project basis (cost share, type of contract according to A-11 definitions, etc.). EERE is also developing a measure to reduce uncosted balances, which means obligated funds will be put to use more quickly. These recent actions should achieve efficiencies and improve cost effectiveness, although it will be difficult in some cases to demonstrate definitively.

Evidence: EERE Reorganization "All Hands" presentation: www.eere.energy.gov/office_eere/pdfs/eere_reorg.pdf. EERE IT Business Case Number 019-20-01-12-01-1011-00-304-101. Wind Technology Program FY 2003 Financial Status Report (June 2003).

Does the program collaborate and coordinate effectively with related programs?

Explanation: The program interacts with other DOE programs, including the energy storage, hydrogen, distributed energy, power systems, electric transmission and distribution, industrial technologies programs, and the Federal Energy Management Program. Outside the Department, the program works with the Department of Interior on increased use of renewables on Federal lands, the National Science Foundation to develop and test wind turbines for the Antarctic, Department of Defense for use of wind to supply electricity for DOD facilities, and the Department of Agriculture on implementation of the renewable energy elements of the Farm Bill.

Evidence: FY2003 Program Execution Plan. 'Assessing the Potential for Renewable Energy on Federal Lands', DOE/GO-102003-1704. 'White House Report In Response to the National Energy Policy Recommendations to Increase Renewable Energy Use on Federal Lands', Department of Energy/Department of Interior (August 2002). USDA: Program is directly supporting Farm Bill Renewable Energy Program implementation, Ag Research Center collaboration. NSF: testing of 100 kW cold weather wind turbine at NWTC and in Alaska for future Antarctic research station use. DOE Hydrogen program coordination: jointly funded FY 2003 analytic task at NREL. BPA/WAPA hydro/wind coordination meetings, joint projects. EPA/DOE/EIA Wind Energy Modeling Meetings, October 2, 2002, February 12, 2003 and June 13, 2003. See: www.epa.gov/cleanenergy/renew_series.htm

Does the program use strong financial management practices?

Explanation: Each year, EERE develops and maintains a Spend Plan and a Measures spreadsheet that links the Spend Plan to annual and long-term goals and measures for each EERE program. The program reviews quarterly costing reports and weekly project status reports. There is no evidence of erroneous payments or statutory violations.

Evidence: FY 2003 Spend Plan and Measures spreadsheet. Sample quarterly costing report and weekly project status report.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The National Association of Public Administrators (NAPA) found dozens of management deficiencies in the program's bureau (the Office of Energy Efficiency and Renewable Energy, or EERE) in a review published in 2000. EERE provided evidence that it addressed some of management deficiencies identified by NAPA, and has prepared a Management Action Plan that will address many of the remaining findings. While a few NAPA recommendations have not been addressed (e.g., that EERE conduct periodic audits to assure that cost-sharing partners actually provide funding they agree to), in general, EERE has taken meaningful steps to address most deficiencies.

Evidence: A Review of the Management in the Office of Energy Efficiency and Renewable Energy (NAPA, 2000). Letter Report from Assistant Secretary Garman to Chairman of the House Subcommittee on Interior and Related Agencies on implementation of NAPA recommendations (July 11, 2001). EERE Management Action Plan (August 2003)

Does the program allocate funds through a competitive, merit-based process, or, if not, does it justify funding methods and document how quality is maintained?

Explanation: The program reports that most of its funding is competitively awarded. In addition, the program views the formal peer and industry stakeholder review annual process (three meetings/year) as a key investment in assuring quality of the program in terms of strategic direction and goals, and effectiveness of activities planned and completed each year to reach these goals. Despite these practices, the program could not document the conduct of its R&D activities in accordance with OMB Circular A-11 definitions (e.g., merit-reviewed with limited competitive selection, Congressionally directed, etc.). Program could also not demonstrate that research stage (basic, applied, development, demonstration) correlated with statutory and Administration guidelines for cost sharing.

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Does competition encourage the participation of new/first-time performers through a fair and open application process?

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Does the program adequately define appropriate termination points and other decision points?

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If the program includes technology development or construction or operation of a facility, does the program clearly define deliverables and required capability/performance characteristics and appropriate, credible cost and schedule goals?

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Has the program demonstrated adequate progress in achieving its long-term outcome performance goals?

Explanation: The program is on track to meet each of long-term cost-of-energy (COE) goals. When the program meets its FY 2004 COE target for high wind speed areas, that activity will be completely "graduated" to the private sector. This year, the wind program has instituted a new process to report annually on progress made from the 2003 baseline toward program technology performance goals. It includes a new peer-reviewed annual assessment of COE for its low wind speed and distributed wind speed activities that will serve as an indicator of performance achievement toward the longer-term goals. Determining the COE impact of improvements in individual components and subsystems will be based on comparisons against a baseline design with a well established cost of energy. Forecasts of COE impact will be based on progress of existing subcontracts and development efforts at the time of the assessment, thereby allowing a clear picture of the impact of improvement against the overall goals and objectives.

Evidence: FY 2004 Budget. Wind Program DRAFT Multi Year Technical Plan (2003). Class 6 2003 Baseline COE, Class 4 2003 Baseline COE, Princeton Energy Resources International (July 2003).

Does the program (including program partners) achieve its annual performance goals?

Explanation: The program's annual measure and long-term measures (cost-of-energy) are one and the same. The program reports that it achieved its annual targets towards its long term goals. The program's measures related to systems integration and outreach activities are under development.

Evidence: FY 2004 Budget. Wind Program DRAFT Multi Year Technical Plan (2003). Class 6 2003 Baseline COE, Class 4 2003 Baseline COE, Princeton Energy Resources International (July 2003).

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program performance goals each year?

Explanation: The program identified several activities that would seem to promote efficiency and cost-effectiveness, including: integrated planning and identification of most cost effective investments/roles in R&D consortia; shifting work previously done by labs that the private sector; and developing electronic collection, storage, management and reporting systems that eliminate historic but unneeded reporting, and integrate performance, planning, fiscal and management data. The program could not provide evidence that these activities have improved efficiency and cost effectiveness.

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Does the performance of this program compare favorably to other programs, including government, private, etc., that have similar purpose and goals?

Explanation: The program is unique in its support for the development of advanced wind technology and its efforts to reduce barriers to technology application.

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Do independent and quality evaluations of this program indicate that the program is effective and achieving results?

Explanation: The National Academy of Sciences concluded "The Wind Energy Program, combined with temporary substantial federal and state renewable energy subsidies, have been responsible for the U.S. lead in technology development." The program's annual peer reviews have been largely positive, although several areas need to be addressed, such as better communication among national lab staff conducting their own experiments.

Evidence: National Academy of Sciences: "Renewable Power Pathways: A Review of The U.S. Department of Energy's Renewable Energy Programs" (2000). US DOE Wind Energy Program FY 2002 Peer Review and Stakeholder Report (December 2002). US DOE Wind Energy Program FY 2001 Peer Review.

If the program includes construction of a facility, were program goals achieved within budgeted costs and established schedules?

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Evidence: