 Wind Currents - By Ken Silverstein Daily IssueAlert 2/12/2004 Free Copyright 2004. All rights reserved. Wind power is gaining momentum. Cost are dropping and government policy is favoring it with tax breaks and mandates Now, powerful players are entering the arena—all critical elements to giving wind power the zip it needs to continue expanding. The advantages are clear: Fuel source is free and no greenhouse gas emissions are emitted. And recent technological advances have dramatically cut electricity production costs and made it compare favorably to other forms of generation, especially with the continued high price of natural gas. But, hurdles remain. The current transmission infrastructure needs to interconnect most wind farms to the power grid and the wind power source is intermittent in nature. Meanwhile, the massive towers have dotted once pristine landscape and harmed bird and wildlife populations. “Until we learn to conserve more energy, we will need the energy resources,” says Gil Willis, president of the Elk River Touring Center in Slatyfork, W.V., which is in the Appalachian Mountains and which is where about 500 wind turbines have been proposed. “If I had to pick between a coal-fired power plant and wind generator, I would pick the wind generator. If wind farms can be operated in a way that does not have a lot of impact on the bird population, then I'm all for it. But, there has to be a happy medium.” Worldwide, about 31,000 megawatts of utility-scale wind turbines are installed today—0.4 percent of the world's electricity demand. Europe makes up about 23,000 megawatts and the United States comprises roughly 4,700 MW, 1,687 of which were added last year, all according to the American and European Wind Energy Associations. Ultimately, proponents of wind power say that the fuel source can capture as much as 10 percent of the electric generation market in the United States within 20 years. But, would increased wind use be a worthy public policy aim? Any cost-benefit analysis must consider that the environmental costs associated with wind energy are quite low, say wind proponents. Development of 10 percent of the wind potential in the 1010 windiest cities in the United States would cut emissions of carbon dioxide by almost a third—the emissions that cause global warming, adds the American wind energy group. And that is behind the push for more green development. While green groups wait for U.S. lawmakers to extend the 1.8 cents per kilowatt hour tax credit given to wind developers, they are seeing states act on their own to require renewable portfolio standards. Colorado, for example, appears poised to pass legislation that would mandate the state's investor-owned utilities to produce 500 MW of electricity from renewable sources by the end of 2006. That would increase to 900 MW in 2010 and 1,800 by 2020. About 15 other states have similar standards, including California and Texas. “We needed to jump start this process now to keep up with what other states are already doing and to show everyone we are serious,” says Herb Hughes, a commissioner at the New Mexico Public Regulatory Commission, which just enacted a renewable standard. Enduring Technology Despite the bold predictions, the challenges facing a significant expansion of wind are considerable. Wind farms, for example, are generally more expensive to build than fossil-fueled generation. The Department of Energy says that roughly 80 percent of the cost of wind projects is the machinery, with the balance being site preparation. But, with the tax breaks, the cost per kilowatt hour is now competitive with other fuel sources, at about 5 cents per kilowatt hour. Meanwhile, the wind does not blow on demand and it generally cannot be economically stored. That's why wind farms have to be backed up by conventional power plants to ensure that electricity will be available when needed. That duplication of capacity not only diminishes the environmental benefits of wind, critics say, but it also increases the cost of wind power while adding an extra burden on the transmission system. And now, wind critics point to an often-ignored phenomenon that could erode the wind industry's rosy economic forecast: wind turbines operating in icy conditions. Icing and aerodynamic imbalance could have serious implications on the life of wind turbines, says a report titled “Wind Power Production in Cold Climates,” which is now circulating in Wisconsin where the public service commission was forced to relocate homeowners living close to utility-owned turbines because of noise. Those conference papers, re-issued in 2000, say that the life of such turbines could be reduced from 50-90 percent. Despite the risks, 400 wind turbines totaling 500 megawatts have been installed at “hostile” sites around the world, critics say. It's not just a theoretical hazard: Three wind farms in the United Kingdom were reportedly closed in 2000 for safety reasons, all of which were tied to cold weather that resulted in metal fatigue in the turbine towers, they add. “The technical literature also raises serious questions regarding the wind industry's so-called 'safety and design' standards,” says Catharine Lawton, a Wisconsin activist who opposes wind farms where she lives. Manufacturers, however, counter that their wind turbines are backed with warranties. Others, meanwhile, note that all generators must halt production so that they can be maintained and repaired. And, in a blow to wind developers, Rep. Alan Mollohan, D-W.V., wrote a letter to the West Virginia Public Service Commission saying that the proposed wind farms in his state would make only a “negligible” contribution to the electric grid but would irreparably harm the local ecology there. That concern is over-hyped, say wind advocates, noting that the overall affect has been to reduce carbon emissions and acid rain in the Northeast. Cheapest Renewable The public, generally, recognizes the fragility of the eco-system. And while most people are not schooled in the ways of renewable energy and in the specifics of wind energy, they support concepts to make greener the generating of electricity. The technology, meanwhile, has proved resilient and will only get better. Even West Virginia, where coal reigns supreme, embraces wind as an alternative energy source. Byron Harris of the West Virginia Consumer Advocates Office notes that natural gas once lagged more formidable fuel sources but is now the “fuel of choice.” After all, many of the various first-generation, often experimental wind turbines installed in the windy passes of California in the 1980s, continue to run and wring emissions-free power from the fierce local winds, adds the American Wind Energy Association. Those early machines are light-years away from the sophisticated, standardized, powerful wind turbines of today, it says, noting that the industry could advance more rapidly if policymakers united and became committed to pushing green energy. With lower barriers to entry and more participation in the market, economies of scale will develop and costs will continue to fall. The result is that more consumers that already label themselves as environmentally conscious will sign up to receive wind energy from their local providers. Undoubtedly, the realization of these aims will take time to mature, but the outlook for wind power has promise. UtiliPoint's IssueAlerts are compiled based on the independent analysis of UtiliPoint consultants. The opinions expressed in UtiliPoint's IssueAlerts are not intended to predict financial performance of companies discussed, or to be the basis for investment decisions of any kind. UtiliPoint's sole purpose in publishing its IssueAlerts is to offer an independent perspective regarding the key events occurring in the energy industry, based on its long-standing reputation as an expert on energy issues. Copyright 2004. UtiliPoint International, Inc. All rights reserved. |
