John Quain, chair of the Pennsylvania Public Utility Commission, who helped draft legislation to introduce electric competition in his state, predicts that natural gas deregulation is next on the...
Wind Power, Poised for Take Off?
next few years. Currently, renewable resources in California total 10 percent of the total mix. Of that, wind energy accounts for 2 percent. The program goal, says Chandler, is "to bring the eligible renewable mix to 18 percent as quickly as possible." And wind plays a big part of that. Currently, there is nearly 750 MW of wind energy nameplate capacity under construction in California.
So, is wind the answer? Some say yes, some say no. In California, when the desert winds blow in the hot afternoons, it' s a good solution. In Texas, it' s a mandate. But in the PJM controlled areas, it' s "simply a business decision," says Leslie Collins, a spokesperson for PJM ISO. Collins says that in the Mid-Atlantic area, many load serving entities are looking to wind power in order to diversify. "Some buy old nuclear plants, some build natural gas facilities and some build wind farms," she says. "It' s simply a business decision."
Is it a dependable source of energy in the region? "That' s a good question. Hydro plants have been a very responsive resource when we needed them. And we' re hoping wind is the same." Why wind? Once again, money. "The individual companies make their own decisions. PJM doesn't say one way or another, unless the decision poses a negative impact to our transmission grid."
About one-third of the new wind power proposed for 2001-2002 will come online primarily as a result of business considerations, without any additional incentive stemming from mandates for renewable portfolios or concerns about green marketing. Such business considerations relate to price stability, operating costs, and fuel diversity.
Price Stability. The extreme volatility in natural gas prices seen over the past twelve months or more has highlighted the fact that wind energy is impervious to fuel price hikes. Wind power plants generate electricity at a predictably constant price over the life of their wind turbines.
Operating Costs. The cost of producing electricity from wind has declined over the past twenty years by more than 80 percent. The cost has fallen from about 38 cents per kWh, in the early 1980s, to less than five cents/kWh (levelized over a plant' s lifetime including the federal wind energy Production Tax Credit).
Some of this cost reduction stems from economies of scale, as the cost of electricity from a wind plant varies based on its size and the average wind speed. A large plant (50 MW and up) at an excellent site (20 mph average) can deliver power for 3-4 cents/kWh; electricity from a small plant (3 MW) at a moderate site (16 mph) may cost up to 8 cents/kWh. In the not-too-distant future, analysts believe, wind energy costs could fall even lower.
Fuel Diversity. As noted by the American Gas Association, wind energy provides "a good fit," with electric generation fired by natural gas, as it offers "complementary" operational characteristics. ("Wind Power Grows, Complements Gas Turbines," , May 14, 2001.)
Consider the 300-MW Stateline project along the Washington-Oregon border, and the 1,000 MW of wind