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WINDPOWER 2009 highlights opportunities, challenges
The ailing economy did not keep record-breaking crowds from descending on the Windy City May 4-8 to talk about wind power—how to finance it, build it, forecast it and deliver it—and ongoing challenges and uncertainty did little to dampen enthusiasm. WINDPOWER 2009 attracted more than 23,000 attendees and 1,280 exhibitors to Chicago's McCormick Place Convention Center. Notable advocates like T. Boone Pickens and U.S. Secretary of the Interior Ken Salazar joined utility professionals, developers and vendors, officials from every level of government, educators and the general public in voicing their support for wind generation. And that is just the tip of the iceberg, according to the American Wind Energy Association (AWEA). More public, political supportA recent survey by AWEA found that 75 percent of Americans support a national 25-percent renewable energy standard, one in which wind would play a significant role. Just as important, political support for increasing the nation's renewable energy use, and for addressing the issues to accomplish that, has increased too. The extension of the Federal production tax credit to 2012 was a welcomed start. There are still many barriers—including some familiar ones—to reaching the goal set by the 2008 DOE report, 20 Percent Wind Energy by 2030. Transmission is still needed; project financing has largely dried up, as it has across the economy; and turbine prices, while showing signs of softening, are still high. Speakers agreed that the next two years are likely to see scaled-down installations, only 6,000 to 7,000 MW added each year. The same experts, however, expect the market to take off after that and add 10,000 a year or more. A national renewable energy standard (RES) and carbon restrictions, whether in the form of a tax or cap-and-trade, will help drive that anticipated boom. Power providers may regard those two likelihoods with trepidation, but speakers at the conference's utility sessions insisted they represent opportunities. Mainstream part of portfolioThe first session looked at IRPs and How Wind fits in the Power Supply Mix. Speakers from Western customers Great River Energy and Los Angeles Department of Water and Power (LADWP) talked about their utilities' approaches to planning. Minnesota has a state RES of 20 percent by 2025 and an aggressive Conservation Improvement Plan. Great River Energy feeds these requirements into a capacity expansion modeling program, along with other variable circumstances to calculate the cost of its resource options under different scenarios. Factoring in a future carbon tax drives the cost of coal generation up by more than $30 per kWh, said Great River Energy Key Account Manager Mark Rathbun, making wind generation more competitive. "In that scenario, we could no longer consider our existing coal plants a baseload resource," he said. To meet projected baseload needs, Great River Energy pursues conservation as the first resource and will look at power purchase agreements and opportunities to add more renewables to its current portfolio of 381 MW of wind. Driven by its own 20-percent-by-2010 goal, the city of Los Angeles is developing the Pine Tree Wind Project. The project will add 120 MW to a portfolio that includes wind purchases, biomass, geothermal, small hydro and solar. It will also help LADWP comply with a new California rule requiring utilities to get more renewable energy from in-state projects. Utility wind farm ownership on the riseThe Pine Tree Wind Project represents a growing trend highlighted in the session, Utility Business Models for Acquiring Wind Energy. While power purchase agreements with wind developers are still the most common arrangement, more utilities are venturing into ownership of wind farms. Because the production tax credit (PTC) is not directly available to nonprofit co-ops, few public power utilities are actively considering the option of owning and operating their own wind projects. However, the benefits of local control—stable power prices, economic development, public education—may justify the investment over the long term. One solution is the "flip structure," that allows investors to build wind farms and take the equity for a fixed period, then "flip" ownership to the utility. White Creek Wind Farm, winner of this year's Public Power Wind Pioneer award, is an example of this type of deal. Public-owned utilities might be able to use Clean Renewable Energy Bonds (CREBs) to fund wind farm development. This Federal program, intended to take the place of the PTC for co-ops, fully funds projects, starting with the smallest request and making awards until the budget runs out. While CREBs have been a limited source of funding in the past, the Recovery Act has allocated more dollars to the program. The deadline to apply for new CREBs is Aug. 4, 2009. Amadou Fall, executive director of the National Renewables Cooperative Organization (NRCO), offered his two-year-old organization as a new resource for co-ops looking to acquire green resources. The 24 utility members of NRCO are working together to package development opportunities, and to aggregate renewable energy request for proposals (RFPs). AWEA addresses utility concernsUtility ownership and working with investors were just two issues attendees discussed at the AWEA Utility Working Group meeting, which took place May 6 during the conference. A record-breaking crowd of utility representatives raised concerns about siting, community opposition, cost recovery, operations and maintenance and, of course, transmission. The topics closely followed the findings of a study AWEA conducted last year to explore the utility perspective on ramping up wind development. AWEA Utility Programs Manager Jeff Anthony told the group that the report had provided plenty of topics for surveys and for a monthly webinar series, starting this summer. Michael Milligan of the National Renewable Energy Laboratory (NREL) told the group about two major wind studies now underway. A study of three years worth of wind speed data from the Western United States will analyze the impact on the grid of 20-percent wind penetration. NREL expects to complete the study by 2010. An interconnection-integration study for the East, looking at what happens as greater amounts of wind are aggregated on the system, will be released this coming winter. WPA summit wraps up conferenceMany who participated in AWEA's utility working group were still in town Friday, May 8, after the conference for the Wind Powering America (WPA) summit. Following a welcome by DOE Wind Technology Program Manager Megan McCluer, plenary speaker AWEA CEO Denise Bode talked about the state of the industry. After touching again on growing public and political support for renewables, Bode listed AWEA's legislative priorities. With the PTC restructured for the current economy and extended to 2012, AWEA is now focusing on a Federal RES, which, Bode said, would reduce fuel prices as well as carbon emissions. Updating transmission policy, even more than technology, would ultimately benefit consumers too, she added. Bode concluded by urging attendees to call their elected officials, reach out to the public through the media and to get involved with industry groups like Wind Energy Works. Workforce development and transmission were the main themes running through panels, breakout sessions and table-top discussions. The industry needs qualified workers to build, operate and maintain wind facilities as much as it needs lines to deliver the electricity. Much of the training for wind jobs can take place at the community college level, but many attendees spoke of the need for standardized programs. Colorado Agriculture Commissioner John Stulp observed that there is not enough data on what the industry needs from universities. The key message from the transmission panel was that planning is easy, but building is the hard part. Creating support and finding consensus among the broad group of stakeholders—utilities, landowners, developers, consumers—may seem time-consuming, but ultimately avoids delays. As the summit and conference wrapped up, it was clear to attendees that the wind of change is sweeping through the power industry. Fortunately, utilities are quickly learning how to position themselves in front of that wind instead of just getting blown along.
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ResourcesAmerican Wind Energy Association 20 Percent Wind Energy by 2030 |
Resources (cont.)National Renewables Cooperative Organization |
PeopleRelated articlesEnergy Services Bulletin, |
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