[Mb-civic] Earth Policy News - Wind Energy Demand Booming: Cost Dropping Below Conventional Sources Marks Key Milestone

[Harold Sifton]

> Eco-Economy Update 2006-2
> For Immediate Release
> March 22, 2006
>
>
> WIND ENERGY DEMAND BOOMING:
> Cost Dropping Below Conventional Sources Marks Key Milestone in U.S. Shift
> to Renewable Energy
> www.earthpolicy.org/Updates/2006/Update52.htm
>
> Lester R. Brown
>
>
> When Austin Energy, the publicly owned utility in Austin, Texas, launched
> its GreenChoice program in 2000, customers opting for green electricity
> paid a premium. During the fall of 2005, climbing natural gas prices
> pulled conventional electricity costs above those of wind-generated
> electricity, the source of most green power. This crossing of the cost
> lines in Austin and several other communities is a milestone in the U.S.
> shift to a renewable energy economy.
>
> Austin Energy buys wind-generated electricity under 10-year, fixed-price
> contracts and passes this stable price on to its GreenChoice subscribers.
> This fixed-price energy product is quite attractive to Austin's 388
> corporate GreenChoice customers, including Advanced Micro Devices, Dell,
> IBM, Samsung, and 3M. Advanced Micro Devices expects to save $4 million
> over the next decade through this arrangement. School districts are also
> signing up. Round Rock School District, for example, projects 10-year
> savings to local taxpayers at $2 million.
>
> Facing a Texas-style stampede of consumers wanting to sign up for the
> current remaining supply of green electricity, Austin Energy has resorted
> to a GreenChoice raffle that will be held on March 23. All its
> customers-both residential and business-were invited to participate in the
> drawing.
>
> A similar situation has unfolded in Colorado with Xcel Energy, which is
> the state's largest electricity supplier. Xcel's 33,000 Windsource
> customers, who until late 2005 were paying $6 more each month for their
> electricity, are now paying slightly less than those using conventional
> electricity, which comes mostly from natural gas and coal. To meet
> fast-growing demand, Xcel is currently soliciting proposals from wind
> developers for up to 775 megawatts of new wind power generation, enough to
> supply 232,000 Colorado homes with electricity.
>
> Austin Energy and Xcel Energy are among the first utilities to pass on the
> falling cost of wind energy to their customers. In the short run, the
> price advantage of wind over conventional electricity may disappear as the
> surging demand for wind electricity from climate-conscious customers
> outruns the supply, driving up the price, and as natural gas prices fall
> from their late 2005 highs. Over the longer term, however, as reserves of
> natural gas are depleted, its price is projected to rise, giving a strong
> advantage to wind.
>
> Interest in wind energy is rising as production costs fall. Although media
> attention focuses on communities with a not-in-my-backyard (NIMBY)
> response to wind turbines, such as the large, off-shore wind farm planned
> off Cape Cod, in most of the country wind farms are enthusiastically
> welcomed. Here, it's the PIIMBY syndrome-put-it-in-my-backyard.
>
> When Xcel announced it would develop several hundred megawatts of
> additional wind-generating capacity, it got the attention of ranching
> communities throughout wind-rich eastern Colorado. In tiny ranch-country
> towns like Grover, near the Wyoming border, ranchers welcomed a proposed
> 300-megawatt wind farm that would span some 30 ranches.
>
> With a large, advanced-design wind turbine generating easily $100,000
> worth of electricity per year, even a 3-percent royalty would earn
> ranchers $3,000 a year from leasing a quarter-acre of ranchland. And they
> can still run cattle on the land. If the proposed project is approved as
> expected, these 30 or so ranchers will have an average of seven turbines
> each, yielding roughly $21,000 a year in additional income. A decade from
> now, there may be thousands of ranchers who will be earning more selling
> electricity than they do selling cattle.
>
> In upstate New York, dairy farmers in Lewis County near Lake Ontario
> warmly embraced the 195-turbine Maple Ridge Wind Farm, and the $5,000 to
> $10,000-annual royalty offered for each of the turbines on their land.
> Rural communities welcome wind farms because they provide income to
> farmers and ranchers, skilled jobs, cheap electricity, and additional tax
> revenue to upgrade schools and maintain roads.
>
> The growing profitability of wind energy is attracting big-time players.
> Four years ago, General Electric purchased Enron Wind, one of Enron's few
> profitable segments, parlaying its advanced wind turbine design into a
> leading position in the world wind turbine market.
>
> In mid-2005, Goldman Sachs purchased Zilkha Renewable Energy, a small wind
> farm development company. Now called Horizon Wind Energy, this
> wholly-owned subsidiary of Goldman Sachs has under construction or in the
> planning stages 4,000 megawatts of wind-generated electricity, enough to
> supply electricity to 1.2 million homes.
>
> AES, a leading international player in electricity generation, has used
> its purchase of SeaWest, another wind developer, to establish a strong
> position in the U.S. wind sector. It now has under development 1,800
> megawatts of wind-generating capacity. Shell, one of the leading bidders
> for offshore wind rights in the United Kingdom, owns 315 megawatts of
> wind-generating capacity in the United States and is planning more. And BP
> is mapping out areas in the United States where it could build some 2,000
> megawatts of wind-generating capacity.
>
> Overall, U.S. wind-generating capacity expanded by 36 percent in 2005,
> reaching 9,149 megawatts. This year it could expand by 50 percent. At the
> end of 2005, there were commercial wind farms in 30 states. (Data at
> www.earthpolicy.org/Updates/2006/Update52_data.htm.)
>
> Wind power generation would grow even faster if it were not constrained by
> the availability of turbines. General Electric, now supplying 60 percent
> of the U.S. wind turbine market, is sold out through 2007. Clipper
> Windpower, a startup turbine manufacturer, is planning to produce 20 of
> its 2.5-megawatt Liberty turbines per month by mid 2006 and a total of 250
> turbines in 2007. Its production is also committed well into the future.
>
> After years of industry uncertainty, when Congress allowed the wind
> production tax credit (PTC) to lapse several times, the 2005 PTC extension
> through 2007 has given investors renewed confidence in the future of wind
> power. The extension of the PTC, which is designed to offset subsidies to
> fossil fuels and nuclear power, is leading to record growth in the number
> of new wind farms planned.
>
> Wind energy is emerging as a centerpiece of the new energy economy,
> because it is abundant, inexpensive, inexhaustible, widely distributed,
> clean, and climate-benign. Three of the 50 states-North Dakota, Kansas,
> and Texas-have enough harnessable wind energy to satisfy national
> electricity needs. The cost of wind-generated electricity has fallen from
> 38¢ per kilowatt-hour in the early 1980s to 4¢ to 6¢ today, offering an
> almost endless supply of cheap energy.
>
> Beyond that, these wells will never go dry. No one can cut off the supply
> or raise the fuel cost. And wind can supply our energy needs without
> disrupting the earth's climate.
>
> #    #   #
>
> Lester R. Brown is President of the Earth Policy Institute and author of
> Plan B 2.0: Rescuing a Planet Under Stress and a Civilization in Trouble.

>