Clean Energy Gets Green Light- A Response
I thought you might enjoy knowing what our part of the
Federal Government is attempting to do in this "wind"
area. GSA, Greater Southwest Region, has published a
"sources sought notice" in the government's electronic
business portal (Fed Biz Opps) inviting the wind energy
industry, and others, to contact us to discuss their
abilities, limitations and constraints. We have done this
with a view toward learning how best to make use of
renewable wind energy for federal government buildings.
These discussions with industry are intended to help us to
identify a viable transactional structure for federal wind
energy procurement. Once our market research and our
discussions are conducted we expect to issue a "follow on"
"wind power" procurement in the future when our current
power contract expires. There have been a number of wind
power purchase efforts in the past, but these have mostly
been for single facilities, or percentages of a building's
load. There have been some wind purchases for the military
installations, or other unique situations. To my
knowledge, this is the first attempt by a government
agency to transition large numbers of multiple building
loads to supply from a renewable wind resource. If it is
successful, significant progress will have been made, and
hopefully it will serve as a model for other federal
agencies, and private sector firms, with multiple
properties in their portfolios.
Currently, we have bundled our building loads together
for deregulated areas of the Texas power markets, and use
electronic reverse auctions to obtain competitive pricing.
Our aggregate load is approximately 132 million kWh per
year for some 84 buildings in Texas. Service of this load
would require a 40 to 50 megawatt wind farm.
As you know, most wind farms currently sell to
utilities which in turn re-market to retail customers,
after adding a premium or markup. Our idea is to work
directly with the wind farms and to eliminate the markups
capturing the added value for the taxpayer. We will of
course have to consider T&D costs, scheduling and
dispatch, etc. but will leave this to knowledgeable
industry parties to address. In our view, the solid
"credit rating" of the federal government, and long term
"fixed price" contracts can benefit both the wind farm
developer (in arranging financing) and the government as a
consumer. Since our budgets and utility costs are large
the savings can be significant.
We have watched the price of fossil fuels escalate over
time. With wind generated power being cost competitive, we
would like to shift large percentages, or all, of our load
to cost effective wind power. The five states of the
Greater Southwest Region of GSA generally enjoy lower
power costs than the rest of the nation. Nevertheless, we
see opportunity to use wind power as a kind of "hedge"
against increasing fossil fuel costs in the future.
Obstacles exist to our ability to make use of wind power.
For example, the federal government is presently limited
by law to ten year contract terms, for utility contracts.
Wind projects are capital intensive up front, and while
they have no fuel costs during their life span, a longer
contract term would allow better financing of
transactions. It would also allow the government to lock
in low wind power prices for a long period of time. It is
difficult to do something in the government for the first
time as no existing policy or guidance exists as to how to
do it.
I noted in your article that some wind farm developers
were seeing "payout" in five years. This is encouraging.
We anticipate many advantages of shifting government
building loads to "wind power" including lower building
operating costs, freeing up existing generation capacity
to service population growth, (without the need for new
plant construction), better air quality and reduction of
nox and particulates, diversity of energy supply, benefits
to the local regional economy of wind development, and
others. In addition, as your article noted moving to wind
generation or other renewable generation would relieve
pressure from the volatile natural gas markets hopefully
favorably impacting prices for that fuel commodity.
Kevin Myles
U.S. General Services Administration |