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March 23, 2006

WIND ENERGY DEMAND BOOMING: COST DROPPING

[Rachel's introduction: Sooner or later we are going to have to find
alternatives to coal and nuclear for electricity. In the U.S. we have
two easy choices: solar power (sunlight to electricity) and wind
power. We could meet all of our electricity needs by putting solar
cells on 7% of the desert lands in the U.S. And wind-power is VERY
abundant: just three of the 50 states -- North Dakota, Kansas, and
Texas -- have enough harnessable wind energy to satisfy national
electricity needs. Wind-power in Colorado and Texas became price-
competitive with natural gas in 2005 triggering a gold-rush for more
wind energy. Now we can't build wind-mills fast enough to keep up
with demand. This article is available online with links to
underlined topics at:  http://www.precaution.org/lib/06/
wind_energy_on_rise.060323.htm]

By Lester R. Brown

WASHINGTON, DC, March 23, 2006 (ENS) -- When Austin Energy, the
publicly owned utility in Austin, Texas, launched its GreenChoice
program in 2000, customers opting for green electricity paid a
premium. During the fall of 2005, climbing natural gas prices pulled
conventional electricity costs above those of wind-generated
electricity, the source of most green power. This crossing of the
cost lines in Austin and several other communities is a milestone in
the U.S. shift to a renewable energy economy.

Austin Energy buys wind-generated electricity under 10-year, fixed-
price contracts and passes this stable price on to its GreenChoice
subscribers. This fixed-price energy product is quite attractive to
Austin's 388 corporate GreenChoice customers, including Advanced Micro
Devices, Dell, IBM, Samsung, and 3M. Advanced Micro Devices expects to
save $4 million over the next decade through this arrangement. School
districts are also signing up. Round Rock School District, for
example, projects 10-year savings to local taxpayers at $2 million.
Facing a Texas-style stampede of consumers wanting to sign up for the
current remaining supply of green electricity, Austin Energy has
resorted to a GreenChoice raffle that will be held on March 23. All
its customers -- both residential and business -- were invited to
participate in the drawing.

A similar situation has unfolded in Colorado with Xcel Energy, which
is the state's largest electricity supplier. Xcel's 33,000 Windsource
customers, who until late 2005 were paying $6 more each month for
their electricity, are now paying slightly less than those using
conventional electricity, which comes mostly from natural gas and
coal. To meet fast-growing demand, Xcel is currently soliciting
proposals from wind developers for up to 775 megawatts of new wind
power generation, enough to supply 232,000 Colorado homes with
electricity.

Austin Energy and Xcel Energy are among the first utilities to pass on
the falling cost of wind energy to their customers. In the short run,
the price advantage of wind over conventional electricity may
disappear as the surging demand for wind electricity from climate-
conscious customers outruns the supply, driving up the price, and as
natural gas prices fall from their late 2005 highs. Over the longer
term, however, as reserves of natural gas are depleted, its price is
projected to rise, giving a strong advantage to wind. Interest in wind
energy is rising as production costs fall. Although media attention
focuses on communities with a not-in-my-backyard (NIMBY)
response to wind turbines, such as the large, off-shore wind farm
planned off Cape Cod, in most of the country wind farms are
enthusiastically welcomed. Here, it's the PIIMBY syndrome -- put-
it-in-my-backyard.

When Xcel announced it would develop several hundred megawatts of
additional wind-generating capacity, it got the attention of ranching
communities throughout wind-rich eastern Colorado. In tiny ranch-
country towns like Grover, near the Wyoming border, ranchers welcomed
a proposed 300-megawatt wind farm that would span some 30 ranches.

With a large, advanced-design wind turbine generating easily $100,000
worth of electricity per year, even a three percent royalty would earn
ranchers $3,000 a year from leasing a quarter-acre of ranchland. And
they can still run cattle on the land. If the proposed project is
approved as expected, these 30 or so ranchers will have an average of
seven turbines each, yielding roughly $21,000 a year in additional
income. A decade from now, there may be thousands of ranchers who will
be earning more selling electricity than they do selling cattle.

In upstate New York, dairy farmers in Lewis County near Lake Ontario
warmly embraced the 195-turbine Maple Ridge Wind Farm, and the $5,000
to $10,000 annual royalty offered for each of the turbines on their
land. Rural communities welcome wind farms because they provide income
to farmers and ranchers, skilled jobs, cheap electricity, and
additional tax revenue to upgrade schools and maintain roads.

The growing profitability of wind energy is attracting big-time
players. Four years ago, General Electric purchased Enron Wind, one of
Enron's few profitable segments, parlaying its advanced wind turbine
design into a leading position in the world wind turbine market.

Maple Ridge Wind Farm in upstate New York feeds power to towns and
cities across New York's North Country and beyond. (Photo courtesy
Maple Ridge) In mid-2005, Goldman Sachs purchased Zilkha Renewable
Energy, a small wind farm development company. Now called Horizon Wind
Energy, this wholly-owned subsidiary of Goldman Sachs has under
construction or in the planning stages 4,000 megawatts of wind-
generated electricity, enough to supply electricity to 1.2 million
homes. AES, a leading international player in electricity generation,
has used its purchase of SeaWest, another wind developer, to establish
a strong position in the U.S. wind sector. It now has under
development 1,800 megawatts of wind-generating capacity. Shell, one of
the leading bidders for offshore wind rights in the United Kingdom,
owns 315 megawatts of wind-generating capacity in the United States
and is planning more. And BP is mapping out areas in the United States
where it could build some 2,000 megawatts of wind-generating capacity.

Overall, U.S. wind-generating capacity expanded by 36 percent in 2005,
reaching 9,149 megawatts. This year it could expand by 50 percent. At
the end of 2005, there were commercial wind farms in 30 states.

Wind power generation would grow even faster if it were not
constrained by the availability of turbines. General Electric, now
supplying 60 percent of the U.S. wind turbine market, is sold out
through 2007. Clipper Windpower, a startup turbine manufacturer, is
planning to produce 20 of its 2.5-megawatt Liberty turbines per month
by mid-2006 and a total of 250 turbines in 2007. Its production is
also committed well into the future.

After years of industry uncertainty, when Congress allowed the wind
production tax credit (PTC) to lapse several times, the 2005 PTC
extension through 2007 has given investors renewed confidence in the
future of wind power. The extension of the PTC, which is designed to
offset subsidies to fossil fuels and nuclear power, is leading to
record growth in the number of new wind farms planned.

Wind energy is emerging as a centerpiece of the new energy economy,
because it is abundant, inexpensive, inexhaustible, widely
distributed, clean, and climate-benign. Three of the 50 states --
North Dakota, Kansas, and Texas -- have enough harnessable wind energy
to satisfy national electricity needs. The cost of wind-generated
electricity has fallen from 38 cents per kilowatt-hour in the early
1980s to 4 cents to 6 cents today, offering an almost endless supply
of cheap energy.

Beyond that, these wells will never go dry. No one can cut off the
supply or raise the fuel cost. And wind can supply our energy needs
without disrupting the earth's climate.

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About the author...

Lester R. Brown, founder and President of Earth Policy Institute, is
the author of numerous books, including "Plan B 2.0: Rescuing a Planet
Under Stress," where he develops a vision for an environmentally
sustainable economy. His principal research areas include food,
population, water, climate change, and renewable energy. In 1974, he
founded Worldwatch Institute and was president of the organization for
its first 26 years.

Copyright Environment News Service (ENS) 2006.