| Woes for wind 
        power 
 Jul 27, 2006 - The Oregonian, Portland, Ore.
 Author(s): Gail Kinsey Hill
 
 Jul. 27--A surge in wind farm development promises to break records 
        regionally and nationally this year, but it likely won't come without 
        growing pains. The frenzied expansion could soon collide with practical 
        considerations, at least in the Northwest.    Power resource planners in the Northwest say several factors could 
        buffet the region's wind farm boom. Rising construction costs, strained 
        transmission lines and a limited ability to blend wind's fickle nature 
        with more controllable generation, such as hydro- power, are among the 
        biggest concerns.    "Wind is a complex variable," said Jeff King, a senior analyst for 
        the Northwest Power and Conservation Council, a regional organization 
        created by Congress to balance power production and wildlife protection 
        in the Columbia Basin. "It's only very roughly predictable."    The rising concerns highlight the rapid-fire pace of wind farm 
        development, which has surprised even the most optimistic of regional 
        planners. The questions also hint at the challenges facing a relatively 
        new industry quickly joining the mainstream of electricity generation.
           Big-name developers and several Northwest utilities are involved in 
        large-scale wind power projects throughout the rural reaches of the 
        Columbia River Gorge, long known for its breezy conditions. Already wind 
        facilities in Oregon and Washington cover thousands of acres and, all 
        told, boast a generating capacity in excess of 700 megawatts. Another 
        500 or more could come online by year-end, a jump in capacity of about 
        70 percent.    One megawatt of wind capacity is equal to the amount of electricity 
        used by 250 to 300 average Oregon homes a year.    Similar red-hot construction scenarios are playing out throughout the 
        country, particularly in windy spots in Texas and California, the top 
        two states for wind-power. In the first half of this year, Texas 
        overtook California as the most prolific wind power producer, according 
        to the American Wind Energy Association, an industry trade group.    Washington and Oregon stand in the seventh and eighth spots, 
        respectively, in the AWEA rankings. The group forecasts the industry 
        will bring more than 3,000 megawatts of additional wind capacity online 
        by year's end, well above last year's record of 2,431 megawatts.    Despite the growth, wind power remains a small percentage of overall 
        electricity capacity -- roughly 3 percent in the Northwest.    Rising costs of fuel for traditional generation, such as natural 
        gas-fired plants, are driving the interest in renewable energy, 
        especially wind. So, too, is a federal production tax credit for wind 
        resource development. The subsidy was extended by Congress last year and 
        is set to expire at the end of 2007.    The jump in demand for wind power is one of the reasons construction 
        costs have climbed dramatically in the past couple of years. Most 
        significantly, the huge turbines that turn the wind's power into 
        electricity have been ordered in such quantities that they now fetch 
        premium prices -- or cannot be bought at all. A review of wind power 
        costs by the Northwest Power and Conservation Council's King found 
        turbines ordered today likely won't be available for delivery until 
        2008.    "Turbine manufactures are sold out," King said.    Some of the largest turbine manufacturers are located abroad, so the 
        falling dollar also has pushed up prices, King said.    Costs for cement, copper, steel and resin -- all used in the 
        manufacture and installation of wind turbines and related equipment - - 
        also have jumped in the past two to three years, resource planners and 
        wind developers note.    Two years ago, the power council estimated the cost of power from new 
        power projects to be between $42 and $53 a megawatt hour. An updated 
        report, completed earlier this month, put estimates in the range of $45 
        to as much as $100 a megawatt hour.    These projections, known as "levelized" costs, take into account 
        capital investments and operating expenses, as well as federal 
        subsidies.    Here's another way to look at it. Not long ago, a large wind farm 
        represented a capital investment of roughly $1 million a megawatt. Now, 
        it's between $1.3 million and $1.7 million. That means the cost of a 
        100-megawatt wind farm would cost as much as $170 million, up from $100 
        million.    "Everyone's seeing it, across the board, in all types of markets," 
        said Ty Daul, managing director of wind development in the West for PPM 
        Energy, a Portland-based company and one of the largest wind developers 
        in the country.    PPM Energy is keenly aware of the higher price tags, Daul said. Even 
        so, the company has no plans to pull back on thousands of megawatts of 
        wind farm development in the works. Also, it has stockpiled enough 
        turbines to see it through its next phase of development.    Even so, other obstacles could stand between new projects and the 
        ultimate delivery of wind-power electricity to customers.    A potentially "very big issue," said King, is the blending of wind's 
        ups and downs with other generation so that a smooth flow of electricity 
        enters the transmission grid on its way to customers.    "The conventional wisdom has been that our huge hydro system should 
        provide enough flexibility to accommodate wind," King said. "But we 
        might have less integration capability than we think. . . . That's 
        something we have to try to figure out."    No problems have yet arisen, he said, but another 1,000 megawatts of 
        new wind capacity is expected to become available in the next couple of 
        years, and that's where the questions lie.    The federal Bonneville Power Administration, whose 31 hydroelectric 
        dams and one nuclear plant generate about 40 percent of the electricity 
        consumed in the Northwest, acknowledges that additional management plans 
        are necessary. The Portland-based agency has teamed with the planning 
        council and with developers, utilities and other interested parties to 
        assess the situation in detail. The group's first meeting is set for 
        Aug. 24.    "The best way to deal with questions about wind integration is to sit 
        smart people down and figure it out," said Elliot Mainzer, a manager in 
        BPA's transmission division.      © Copyright 2006 NetContent, Inc. Duplication and 
        distribution restricted.
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