oversight

The Federal Wind Energy Program

Published by the Government Accountability Office on 1977-03-29.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                              DOCUMENT RESUME
  00o85 - rA1051825]

 (The Federal Wind Energy Program]. B-178205;
 29, 1977. 6 pp.                              EMD-77-33.         March

 Report to Robert W. Fri, Acting Administratcr,
 and Dewalopment Administration; by Monte       Energy Research
                                          Canfield, Jr.,
 Director, Energy and Minerals Div.
 Contact: Energy and Minerals Div.
 Budget Function: Natural Resources, Environment,
                                                  and Energy:
     Energy (305).
 Organization Concerned: Department of Agriculture;
     Aeronautics and Space Administration; National National
     Foundation.                                    Science
 Congressional Relevance: House Committee
                                          on Science and
     Technology; Senate Committee on Energy and
                                                Natural
     Resources.
           Under the direction of the Energy Research
 Development Administration (ERDA), the National             and
 Space Administration is responsible for               aeronautics    and
                                           developing, testing, and
 evaluating large wind energy systems, and
 Agriculture is responsible for identifying,the Department of
 testing applications in rural and remote         developing, and
 specifically designated for small, medium,  areas.    Of the funds
 from July 1974 through Septeqber 1976, sore    and   large   systems
                                                 than 82% had been
 spent on large systems. ERDA's emphasis
                                           on
 been based on its belief that: well-defined these systems has
 exist for large systems  but not for small and  commercial markets
                                                    medium-sized
 systems; large systems will provide cheaper
 and medium-sized; Federal assistance will       power tLan the small
                                              be needed by industry
 to develop and commercialize large systems,
 assistance will be needed to develop an]        but little Federal
                                            commercialize smaller
 systems; areas needing improvement are well-defined
 systems, but not for the stall and medium-sized;           for large
 program to develop small and medium-sized              and  a Federal
                                              systems
 eliminate private investment. Findings/Cjnclusicns:     would
survey of the Wind Energy Program                            A GAO
                                    showed that: the decision to
 stress large systems was made without comparative
small and medium-sized systems; and ERDA                 analysis of
                                            needs    tc
compare and evaluate the potential and advantages systematically
disadvantages of wind energy systems of                  and
program content and priorities are proper all    sizes   so that
                                             and that resources are
effectively allocated among the different
systems and between the wind program and sized wind energy
                                           ERDA's cther programs.
Recommendations: ERDA should: direct the
of market studies in sufficient depth to expeditious completion
                                           identify the commercial
potential of small, medium, and large wind
these market studies in conjunction with       energy systems; using
                                           the ongcing and
completed studies, make a comprehensive
formal potential and the advantages and formal review of the
                                          disadvantages of wind
energy systems of all sizes, and, if warranted,
                                                      redirect
resources within the wind Energy Program and between the wind
program and non-wind programs. Provided ERDA'- comprehensive
review shows tLat small and/or medium-sized systems have the
potential for .apid commercial expansion, it should move quickly
to develop optimum desigLs, identify constraints and impediments
to commercialization and take actions to overcome thes, and, if
necessary, develop Flans to demonstrate these systems.
(Author/Qe)
                                UNITED STATES GENERAL ACCOUNTING OFFICE
       aJ~::;ยท':~/
                i-I                      WASHINGTON, D.C. 20548


 ENERGY AND MINERALS
       LIVISION

00    B-178205                                       MAR 2 9 1977
      B-178205


      The Honorable Rcbert v. Fri
      Acting Administrator, Energy Research
        and Development Administration
      Dear Mr. Fri:
           We have surveyed the Wind Energy Program administered by
      the Energy Research and Development Administration (ERDA) with
      suppoLt from the National Science Foundation, the National
      Aeronautics and Space Administration, and the Department of
      Agriculture.
           Since its inception in 1973, the program's eiphasis has
      been on developing anc commercializing large wind energy
      systems. Our survey showed that:
               -- The decision to stress large systems was made
                  without comparative analysis of small and
                  medium-sized svstems.
               -- ERDA needs to systematically compare and
                  evaluate the potential and the advantages and
                  disadvantages of wind energy systems of all
                  sizes so that program content and priorities
                  are proper and that resources are effectively
                  allocated among the different sized wind energy
                  systems and between the wind program and ERDA's
                  other programs.
      BACKGROUND

           The Federal Wind Energy Program was established to
      advance the technology, development, and commercialization
      of wind energy. The program was managed by the National
      Science Foundation until January 1975 when ERDA wa. created
      and given responsibility for program management.  The
      Foundation continued some wind research projects and contracts
      until July 1975 and can still, under certain circumstances,
      be responsible for some basic research. Under ERDA's direc-
      tion, the National Aeronautics and Space Administration is



                                                                    EMD-77-33
B-178205



responsible for developing, testing, and evaluating large
wind energy systems, and the Department of Agriculture is
responsible for identifying, developing, and testing appli-
cations in rural and remote areas. Annual funding for the
program increased from $200,000 in fiscal year 1973 to an
estimated $24.1 million in fiscal year 1977. The President's
current budget request would further increase funding to $25.7
million in fiscal year 1978.

     Tha goal of ERDA's Wind Energy Program is to advance wind
technology and accelerate the development and use of reliable
and economical wind energy systems--systems that are capable
of rapid commercial expansion to produce a significant portion
of the Nation's future energy.

PRO'GR.M STRU(LJRE CHOSEN WITHOUT
ADEQUATb EVALUATION OF ALTERNATIVES

     Of the funds specifically designated for small, medium,
and large systems from July 1974 through September 1976, more
than 82 percent has been spent on large systems.  ERDA's
emphasis on these systems has been based on its belief that

     -- well-defined commercial nlarkets exist for large
        systems but not for smal. and medium-sized
        systems;

     -- large systems will provide cheaper power
        than small and medium-sized systems;

     -- Federal assistance will be needed by industry
        to develop and commercialize large systems,
        but little Federal assistance will be needed
        to develop and commercialize smaller systems;

     -- areas needing improvement are well defined for
        large systems, but not for small and meditrm-
        sized systems;. and

     --a Federal program to develop small and medium-
       sized systems would eliminate private investment.

     ERDA contractors have completed two studies to determine
optimum designs and energy costs for large systems. Work has
also been done to identify impediments to large system
commercialization.   In addition, ERDA has sponsored the design
and construction of a large 100 kilowatt wind energy system
near ,andusky, Ohio.   This system beqan operation in 1975 and
has been used to provide large system cost estimates and

                              2
B-178235



performance data, to test components for large systems, and to
identify large system problems. ERDA has also contracted for a
June 1978 completion of a 1.5 megawatt, large system prototype
costing in excess of $7 million. ERDA plans to construct
another 1.5 megawatt ($3.5 million) and two 200 kilowatt
systems ($2 million each) by September 1978.

    On the other hand, ERDA has done little on small and
medium-sized wind energy systems. Small system research and
development received almost no support from ERDA until May 1976,
when ERDA selected its Rocky Flats Laboratory to manage small
system development.   Initial work, however, has involved only
the testing of existing designs. No agency or laboratory has
yet been assigned responsibility for medium-sized systems.
Also, no optimum design studies or demonstration efforts have
been undertaken or planned for either small or medium-sized
conventicnal systems.

     To maximize the effectiveness of important research and
development programs, such as the Wind Energy Program, it is
essential that ERDA systematically assess the potential and
the advantages and disadvantages of various program mixes
before allocating resources. The decision to emphasize large
wind energy systems was not based on that kind of analysis.
Although Wind Energy Program officials still believe this
emphasis to be correct, it has not yet been confirmed by
factual deta or actual studies.

    ERDA has contracted for a number of studies that have
recently been completed or will be completed this year. These
studies will provide much of the information needed to properly
compare the advantages and disadvantages of the various system
sizes.  For example, ongoing studies are addressing such things
as cost estimates for small, medium, and large wind systems;
wind energy system applications; legal, environmental, and
institutional impediments to wind system development in general;
and the theoretical impact wind systems could have.

    However, ERDA has no market study ongoing or planned to
determine the commercial potential for small, medium, or large
systems.   In commenting on our report, an ERDA official told
us that it would be more proper for private companies to per-
form market surveys. He said that private industry would per-
form their own market surveys regardless of what ERDA does,
and any ERDA market survey would not be useful to private
companies.

     Without knowing the comnmercial market potential for
small, medium, and large wind energy systems in the various

                              3
 B-178205



 regions of the country, ERDA cannoc be assured
                                                 that its Wind
 Energy Program content and priorities are proper
 resources are being effectively allocated among   and that
                                                  the d fferent
 sized wind systems and between the wind program
                                                  and ERDA's
 other programs.

    For example, market studies could find tha' small
or medium-sized systems have greater commercial        ard/
                                                potential
than lar3e systems and that wind program
be redirected. Similarly, market studies rescurces  should
                                          could disclose
that small and/or medium-sized wind energy systems
greater potential than nonwind technologies being have
by ERDA and that ERDA should reallocate nonwind    developed
                                                program
resources to the wind program.  Thus, even though ERDA's
completion of commercial market surveys may not
                                                meet the
individual needs of private companies, these surveys
essential for effective resource allocation.          are

CONCLUSIONS

    Although the Wind Enerly Program's emphasis on large
systems may be proper, it has not been supported
                                                  by
thorough planning studies which are needed to wisely the
                                                      establish
Drogram content and priorities and to allocate resources.
Large systems have oeen emphasized without benefit
                                                    of compara-
tive analysis of the advantages and disadvantages
                                                   of small,
medium, and large systems.

     Although ERDA has completed or has ongoing studies
will provide much of the informacion required to          which
program alternatives, it should also make market  compare
determine the commercial potential of the various studies to
                                                   sized systems
in different regions of the country.

    Once the market studies are completed, ERDA should
comprehensive, formal review of the commercial market make a
and the advantages and disadvantages of wind energy    potential
of all sizes, and--if warranted--redirect resources  systems
the Wind Energy Program and between the wind program within
                                                      and non-
wind programs. If the comprehensive review shows
and/or medium-sized systems have the potential for that small
commercial expansion, ERDA should also move quickly rapid
                                                     to develop
optimum designs; identify constraints and impediments
commercialization and take actions to overcome them;   to
necessary, develop plans to demonstrate these systems.and,  if
actions would oe necessary to maximize the contribution   Such
                                                          these
systems can make in meeting the Nation's future
                                                energy needs.



                              4
B-178205



RECOMMENDATIONS

    We recommend that you:

    -- Direct the expeditious completion of market studies
       in sufficient depth to identify the commercial
       potential of small, medium, and large wind
       energy systems.

    -- Using these market studies in conjunction with
       the ongoing and completed studies, make a com-
       prehensive, formal review of the commercial
       potential and the advantages and disadvantages
       of wind energy systems of all sizes, and--if
       warranted--redirect resources within the Wind
       Energy Program and between the wind program and
       nonwind programs.

    -- If ERDA's comprehensive review shows that small
       and/or medium-sized systems have the uotential
       for rapid commercial expansion, move quickly to
       develop optimum designs; identify constraints
       and impediments to commercialization and take
       actions to overcome them; and, if necessary,
       develop plans to demonstrate these systems.

     A draft of this rertrt was furnished to EPDA officials
responsible for the Wir  Energy Program. Their comments
were considered in fir .izing this report and changes were
made where appropriate.  These officials generally agreed
with our conclusions and recommendations.



    We are sending copies of this report to the Directcor,
Office of Management and Budget; the Chairman, House
Committee on Appropriations; the Chairmen, House Committee
on Government Operations and Senate Committee on Governmental
Affairs; the Chairmen, House and Senate Subcommittees on
Public Works; and the Chairman, House Committee on Science
and Technology.

    As you know, section 236 of the Legislative Reorganization
Act of 1970 requires the head of a Federal agency to submit
a written statement on actions taken on our recommendations
to the House Committee on Government Operations and the
Senate Committee on Governmental Affairs not later than 60 days
after the date of the report and to the House and Senate
Committees on Appropriations with the agency's first request
                               5
B-178205



for appropriations made more than 60 days after the date of
the report.

    We appreciate the courtesy' and cooperation extended to
our staff during the survey.

                              Sincerely yours,




                              Monte Canfield, Jr.
                              Director




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