Electricity Generation Blowing in New Direction
Jun 23 - Indianapolis Business Journal
Wind energy holds big promise for Indiana, with the potential to electrify
up to 10 million homes at any given time, virtually pollution-free.
Advocates also say the state has yet to tap the potential from manufacturing
wind turbines and other hardware that could create 25,000 jobs.
But, so far at least, the commitment to wind by the biggest electric
utilities operating in the state has been tepid, suggesting Indiana may
thrive more as an exporter of wind-generated electricity.
Turbines beginning to dot the wind-rich northern half of the state are not
being erected by Indiana's big electric utilities, but by third-party energy
firms. Indiana utilities are reluctant to quickly or significantly break
ties to relatively cheap coal that fuels most of the state's electric
generation.
"It was the low-cost coal that's basically kept the wind energy out" for
years, said Jimmy Bricker, Purdue University Extension director in Benton
County, who helped write a model ordinance for zoning wind farms.
"Coal brings [utilities] a higher profit. With these people, you just have
to follow the money," Grant Smith, director of utility watchdog organization
Citizens Action Coalition, said of the state's electric industry.
Farming the wind
With all the headlines about wind projects lately, that might sound cynical.
After all, Duke Energy and lndianapolis Power & Light each have committed to
buy up to 100 megawatts at any given moment of electricity generated by wind
turbines in Benton County over a 20- year period.
Duke's power will come from at least 54 wind turbines that Orion Energy
Group dedicated at the Benton County Wind Farm, about 90 miles northwest of
Indianapolis.
IPL will get its green energy from some of the 67 turbines at the new
Hoosier Wind Project farm in Fowler being installed by California-based
enXco, an arm of France's EDF Energies Nouvelles Co.
One megawatt alone is enough to power 330 average-size homes, according to
Duke.
So what's an environmentalist or ratepayer advocate not to love?
For one, Smith points out that Duke's share of wind to total generation is
puny - about 1.3 percent of its total 7,300-megawatt load in Indiana.
IPL's wind share should be slightly better - about 3 percent of its total
power.
Smith also contends utilities didn't exactly charge into windmills
voluntarily.
He noted attempts in recent sessions of the Indiana General Assembly to
mandate that utilities supply a fixed percentage of their electricity from
renewable sources. Those mandates didn't pass, but utilities feel the
pressure.
Such "renewable electricity standards" are now in place in about 20 states.
Wisconsin, for example, requires 10 percent by 2015, while Illinois set the
bar at 25 percent by 2025.
"The fact is that infinitely more can be done," said Smith. "This is all
dabbling at the edges because they [Indiana utilities] were forced into it"
with the threat of an RES. "Wind will continue to be anemic unless you have
a renewable energy standard."
The CAC also contends that wind is likely cheaper on a per-
kilowatt-per-hour basis than Duke's $2 billion, 630-megawatt coal
gasification plant under construction in Edwardsport.
Environmental groups argue that the technology Duke will use at the plant to
dramatically decrease air pollution is still unproven and likely to cost
much more than originally projected years down the road.
History of coal
The bottom line is that utility ratemaking, utility profit models and
political lobbying have for decades been based around coal in Indiana - and
that's where utilities will continue to focus regardless of wind's
potential, said Smith.
North Carolina-based Duke, with 774,000 Indiana customers, sees it
differently,
Our resource planning is customer-focused, not shareholder- oriented, and
Indiana state regulators review and approve it on that basis," said Angeline
Protogere, Duke's Plainfield-based spokeswoman. "The use of wind power does
come down to economics, but it is impact to customers, not shareholders."
Also, because "wind doesn't always blow" wind turbines can be expected to
supply only about 15 percent of their capacity during peak times, such as
the summer, when power is most needed, she added.
"Therefore, it takes six to seven times as much installed wind-
power-generating capacity to get the same amount of power as more
conventional resources. That's what drives the costs up," she said.
Duke, the first Indiana utility to make a significant wind purchase, said it
is not done looking for potentially more energy from wind. It recently
notified "green energy suppliers" that it wants to buy another 200 megawatts
of either sun, wind, hydro or organic-generated electricity.
Wind power exporter?
If Indiana utilities don't buy from wind farms spouting here, their
counterparts in other states will, said Purdue's Bricker.
He rattles of a list of utilities from out east that have struck contracts
to buy power. Columbus, Ohio-based American Electric Power plans to buy from
Fowler Ridge Wind Farm 100 megawatts, each, for its Charleston, W.Va.-based
Appalachian Power and for its Indiana Michigan Power operation.
Meanwhile, Virginia-based Dominion Resources, which has a contract for 200
megawatts and bought a 50-percent interest in the Fowler Ridge Wind Farm
from BP Alternative Energy Inc.
The first phase of the wind farm, about 222 turbines generating up to 400
megawatts, is to be operating by year-end.
Construction on another 350 megawatts could begin next year, said Dominion.
Many out-of-state utilities don't enjoy abundant, lower-priced coal.
Dominion, for example, also is a 50-50 partner in a 264-megawatt wind farm
in Grant County, W.Va.
"The demand on the East Coast is a lot greater than here" for wind power,
said Bricker.
A breeze so far
Wind development in Indiana is in its infancy. The state might be able to
generate up to 40,000 megawatts of electricity from wind, according to data
presented by the American Wind Energy Association.
That's more than what's produced by coal-fired plants here.
Harvesting the wind in Indiana takes more doing than in western states or on
mountaintops. Some federal research shows that turbines need to be at least
230 feet tall to catch some of the stronger currents above Hoosierland. Many
of the wind turbines sprouting in Benton County are slightly taller than
that.
Currently, about 3,000 megawatts worth of wind-power equipment has been
announced or built, said Eric Burch, spokesman for the Indiana Office of
Energy and Defense Development. "That's just a start."
And not all the wind potential is at vast wind farms in northern counties.
About a month ago, a wind turbine was erected at The Time Factory, near 62nd
Street and Georgetown Road, on the northwest side.
Jim Purcell, CEO of the calendar publishing firm, estimates that the
$200,000 turbine could power at least 60 percent of his 22,000- square-foot
factory. Helping justify the cost was a $50,000 federal energy grant he won
with the help of Sen. Richard Lugar's office.
Purcell acknowledges that some will deem him "crazy," but the father of
three said he wants to set a good example for his children, plus wants to be
more environmentally responsible as a company.
Economic benefits
But there's more potential benefit than consuming less coal- generated
electricity building wind turbine components.
Last year, a study by a partnership of the Sierra Club, United Steelworkers
and Environment America found that wind-turbine manufacturing in Indiana
could generate 25,000 jobs.
So strong is the demand for wind turbines that practically every turbine
slated for projects worldwide in the next two years is already spoken for,
said Burch.
Purdue's Bricker said the state will need technicians not just to build new
turbines but to service them. He sits on an advisory board at the Lafayette
campus of Ivy Tech Community College that is looking into the possibility of
offering an associate degree in the field.
For now, the money is going to construction firms and to landowners. Bricker
estimates that 350 landowners in Benton County are sharing in the
neighborhood of $2 million a year from leasing land to wind farms.
According to a presentation last year by the National Renewable Energy
Laboratory, each new 100 megawatts of wind in Indiana will provide $400,000
a year in land-lease payments. The construction phase involves typically 150
jobs and pumps $18.5 million into local economies, according to NREL.
The 100 megawatts, once produced, represents about nine "permanent" jobs and
$2.3 million in direct economic impact.
Today's wind turbine...
* can generate 120 times the amount of electricity as 1980s models, at
one-fourth the unit costs
* costs around $3 million for models used by wind farms
* benefits from sophisticated computer-controlled blade-pitch angles to
maximize power generation.
* generally produces from 1 megawatt to 3 megawatts, although some now
produce up to 7 megawatts. About 400 homes can be powered with 1.5
megawatts.
* most likely was manufactured by Germany's Enercon, Spain's Gamesa, USA's
General Electric or Denmark's Vestas Wind Systems.
* sits on towers typically as tall as 200 feet to as high as 453 feet for
Enercon's new E-126 model, a 6-megawatt turbine with 413- foot rotor
diameter.
* collectively produced about 16,818 megawatts in the United States at the
end of 2007, or equivalent to electric use of 4.5 million average U.S.
homes.
Sources: American Wind Energy Association, General Electric, U.S. Department
of Energy, IBJ research
Wind's ups and downs
Pros...
* Almost pollution-free
* No fuel to buy vs. conventional power plants
* Could provide at least 20 percent of nation's energy, according to the
Department of Energy
* Single 1-megawatt turbine displaces 1,800 tons of carbon dioxide
* Amount of electricity generated in one year by a 1-megawatt turbine would
amount of 9 tons of sulfur dioxide and 4 tons of nitrogen dioxide if
generated by conventional fossil fuel plant
* During 2008, will reduce natural gas use for gas-powered electric plants
by 5 percent.
* One operating/maintenance job created for every 10 turbines installed.
Cons...
* Relatively expensive to install initially per kilowatt hour vs. other
power-generation methods
* Wind farms require large tracts of land.
* Intermittent power production - turbines often receive insufficient wind
on hot days when utilities most need extra power
* Turbines run 60 percent to 80 percent of their full output capacity only
10 percent of time. On an average day, they generate 30 percent to 35
percent of their full capacity
* Many people have aesthetic issues with turbines, especially when they're
placed in scenic areas
* Turbines can kill birds and bats, but newer models turn more slowly,
minimizing deaths
* Optimal locations for wind farms are often in rural areas, far away from
electric power customers
* Wind farms can produce undesired noise
* Still lags coal in cost-per-kilowatt hour though the gap is closing: 4.5
cents of levelized costs for wind over life cycle vs. 3.9 cents for coal
Sources: American Wind Energy Association, General Electric, U.S. Department
of Energy, IBJ research
Copyright IBJ Corporation Jun 9, 2008
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