Wind Power, Poised for Take Off?
Wind Power: Poised for Take Off?
A survey of projects and economics.
The amount of electricity generated from wind in the U.S. is expected to surge this year - owing in large part to hydropower shortages out West, natural gas price volatility across the country, and high capacity factors for wind turbines, which help to offset the intermittent nature of wind energy generation.
As of March 2001, proposals were in the works for some 2,000 new megawatts (MW) of new, wind-powered generating capacity. Of that amount, 1,500 MW or more may be completed in 2001, more than twice the previous record of 732 MW set in 1999.
If that scenario should unfold as projected, then total generating capacity from wind will have jumped from 2,550 MW at the end of 2000 to over 4,000 MW by the end of 2001, with the increase representing a 60 percent annual growth rate and a $1.5 billion investment. Moreover, a clear message will have emerged out of the confusion surrounding supply shortfalls and electricity price volatility: That wind power can prove beneficial to a utility' s supply portfolio for basic economic reasons, by reducing risk associated with fuel prices and supplies.
Regional Hot Spots
Texas, California, and the Pacific Northwest led the list of new wind energy projects proposed during the year.
Pacific Northwest. In February, the Bonneville Power Administration (BPA) issued a request for proposals (RFP) for 1,000 MW of wind energy, the largest wind RFP ever from a single agency or utility, and soon drew an enthusiastic response. BPA issued its RFP because it wanted to supplement its large hydropower capacity with another renewable power source, and wanted that new generating capacity to come online "fast."
The response to the RFP just "blew [us] away," said BPA renewable power resource manager George Darr. Twenty-five proposals were submitted, totaling about 2,600 MW. The proposals also included room for expansion of the projects to a total of 4,000 MW.
It did not take long for the process to bear fruit. On June 25, U.S. Energy Secretary Spencer Abraham announced that the Department of Energy (DOE), through BPA, intended to sign pre-development agreements for seven of the wind power projects submitted in the RFP, providing 830 MW of new generating capacity for the Pacific Northwest.
"We' re celebrating moving a mature, renewable technology," said Abraham. According to DOE, the average first-year cost of the power was expected to come in at "less than 3 cents per kilowatt-hour (kWh)." And after adding in the costs of "firming up the intermittent wind generation," DOE projected that BPA' s wind program would be "cost-competitive with other sources of generation such as coal and natural gas."
Texas. Texas alone will account for over a third of the new capacity to come online this year in the United States. The jump in new investment was triggered by the state' s Renewables Portfolio Standard, which was included by legislators in the state' s electricity restructuring law. The RPS program requires utilities to diversify their portfolio with a minimum amount of renewable