February 22 , 2013
Xcel Energy, MidAmerican among leaders as more utilities sign up for wind's consumer savings
U.S. electric utilities are locking in fixed-price contracts for wind power, now more cost-competitive than ever, illustrating the success of a key federal tax policy in holding down rates for consumers.
A total of 66 U.S. utilities bought or owned wind power by the start of this year—nearly half for large amounts over 100 MW, and up from 42 a year before, AWEA said. Utilities have continued to sign up for more since Congress and President Obama extended the Production Tax Credit for wind energy in the "fiscal cliff" bill signed at the beginning of January.
"AWEA applauds these utilities for maximizing the PTC opportunity to continue bringing low-cost, fixed price wind power to their customers," said Rob Gramlich, Interim CEO of AWEA. “From Xcel Energy in Minnesota to OG&E in Arkansas, electric consumers are racking up the savings as a result. The wind energy industry looks forward to our continued partnerships with utilities across the country to lock in the economic development, rate stabilizing and environmental benefits of more wind power."
Among the utilities making major wind power purchases and reporting consumer savings are:
Xcel Energy, the number one wind energy provider in the nation, is considering adding more wind generation in Minnesota and Colorado because of the PTC extension. Earlier this month, Judy Poferl, president and CEO of Xcel Energy's Northern States Power Company-Minnesota, said, "Although Xcel Energy is well ahead of meeting our state's renewable energy requirements, we are open to adding cost-effective wind projects that could provide long-term value to our customers. The extension of the federal renewable electricity Production Tax Credit may make cost-effective projects available to serve our customers."
In Colorado, Xcel Energy has repeatedly set national records for generating more than half its electricity from wind power and is now seeking regulatory approval to accelerate its resource acquisition process to allow for the addition of value priced wind energy. "We have a great opportunity to see if additional wind resources in Colorado would be of economic benefit to our customers with the extension of the federal tax credit, but we must act quickly," said Ben Fowke, chairman, president, and CEO of Xcel Energy. "Our request is not being driven by state renewable energy standards, but by the opportunity to reduce costs."
Xcel Energy now has a request for proposals out for up to 200 MW of wind (see story below).
MidAmerican Energy, the No. 1 utility in the U.S. in terms of ownership of wind capacity, announced Dec. 31 that it had completed three more wind projects totaling 407 MW in Iowa. MidAmerican is a subsidiary of Berkshire Hathaway, the holding company controlled by investor Warren Buffett. "Wind now comprises 30 percent of MidAmerican Energy's generation portfolio," said Bill Fehrman, president and CEO.
Tri-State Generation and Transmission Association, citing the recently extended PTC and ongoing Renewable Portfolio Standard requirements in moving forward with an RFP to be executed by June 30 for approximately 100 MW of renewable energy to take advantage of competitive market prices.
Oklahoma Gas & Electric, which in a filing in Arkansas, reported cost savings to its customers from the "clean, renewable energy" of its Crossroads wind farm:
"From September 2011 through June 2012, fuel costs to Arkansas customers were approximately $1.2 million lower because of the incorporation of Crossroads into OG&E's generation fleet. OG&E estimates that fuel savings to Arkansas customers from September 2011 through December of 2012 will be in the range of $2.2 million. Total Company production cost savings for the first five years of operation are estimated to be $268 million. Over the expected twenty-five-year life of the asset production cost, the savings are estimated to be $2.3 billion."
Minnesota Power, part of ALLETE Inc., which completed phases two and three of its 210-MW Bison Wind Energy Center in North Dakota. With the purchase of a direct-current transmission line to Duluth, the company can phase out a long-term contract for coal generation and replace it with wind energy, increasing renewables to 20 percent of its generation mix en route to meeting Minnesota's goal of 25 percent by 2025. "By meeting an aggressive timetable we are able to capitalize on the wind production tax credits to the benefit of our customers in providing a clean, cost-effective energy resource," Minnesota Power COO Brad Oachs said in a news release.
Alliant Energy Corp., a subsidiary of Interstate Power & Light Co., which on Dec. 21, 2012 issued an RFP for approximately 100 MW of wind power in the Midwest.
Nebraska electric utilities: Although Nebraska utilities had not been planning to add more wind power until 2017, Nebraska Public Power District recently signed a purchase agreement for 75 MW; Omaha Public Power District is in the process of signing for an additional 200 MW; and Lincoln Electric is seeking 50 MW, all as a result of the PTC's extension for projects started in 2013.
Puget Sound Energy, which announced last week it had set a new record by generating 23.5 percent of its energy from the utility's three Eastern Washington wind farms:
"This milestone underscores the role wind power can play in meeting our energy needs," said David Mills, PSE vice president of Energy Supply Operations. "Wind is now a key resource for providing our customers with reliable, affordable electricity. And when combined with our hydro, natural gas and coal power plants, wind gives us flexible, cost-effective options for serving local homes and businesses."
DTE Energy: The company's ECHO Wind project, slated for 2013, will have a combined levelized cost of approximately $52.50 per megawatt-hour (MWh), down substantially from power purchase prices several years earlier, according to the Michigan Public Service Commission. DTE says its investment in that and two other recent wind facilities will contribute $150 million in economic benefits to Michigan.
Consumers Electric Power estimates that Macon County and the state of Michigan received an economic boost of nearly $10 million from the development of the company's first wind farm, the Lake Winds Energy Park.
The Michigan Public Service Commission said Feb. 15, in releasing its "Report on the Implementation of the P.A. 295 Renewable Energy Standard and the Cost-Effectiveness of the Energy Standards," that:
"Compared to building a new, conventional coal facility, renewable energy contracts are significantly lower in price…less than any newly built generation including new natural gas combined cycle plants. Based on contract pricing trends and the January 2013 announcement that federal legislation extended the eligibility of the Production Tax Credit for projects that begin construction by December 31, 2013, Commission Staff anticipates that the cost of renewable energy will continue to decline, while the benefits from energy optimization savings and emission reductions from offset generation will continue to increase."
As the Michigan PSC noted, utilities are cutting pollution by purchasing more wind energy. Currently installed wind turbines will avoid nearly 100 million metric tons this year of carbon dioxide emissions, for instance, equal to 1.8% of the entire country's carbon emissions.
Other new wind power purchasers last year included at least 18 industrial buyers, 11 school districts, and eight towns or cities, showing a significant trend toward nontraditional power purchasers from the industrial sector. Manufacturers of everything from plastics to light bulbs, semiconductors, and badges, farms, and medical centers are now directly purchasing wind power.
Spurred by the federal incentive, American wind power grew by 28 percent in 2012 alone, for the first time becoming the number one source of new electric generating capacity, and pouring $25 billion of private investment into the economy. The top states for new installations last year were: 1. Texas, 2. California, 3. Kansas, 4. Oklahoma, 5. Illinois, 6. Iowa, 7. Oregon, 8. Michigan, 9. Pennsylvania, and 10. Colorado.
Illinois saw the installation of over 800 MW, for example, with half that output sold into the Tennessee Valley Authority market. As one of America's wind power hubs, Illinois is home to wind power innovation. This year saw the installation of the first concrete wind tower there, which the manufacturer says can support taller turbines to access better winds and open up new areas for development.
Xcel Energy seeks renewables
Xcel Energy is accepting proposals for up to 200 MW of new wind generation resources for its Upper Midwest generation system.
Proposals are being accepted for both power purchase agreements and ownership arrangements. The company will consider projects having an interconnection point within the Midwest Independent System Operator footprint.
Proposals are due April 1, and the evaluation of submissions will take place in April and May, with contract negotiations with selected bidders slated to start in June. The request for proposals is available online on the company’s website.
Vestas reduces workforce at two Colorado blade factories
To adjust capacity to market demand for wind turbine orders in 2013, Vestas this week reduced its manufacturing workforce at its blade factories in Windsor and Brighton, Colo.
The workforce reduction represents about 10 percent of Vestas’ 1,100 manufacturing employees in the state.
In a news release Vestas explained that it knew the late timing of the federal production tax credit (PTC) extension would result in a significant reduction in 2013 installations relative to previous years, due to the time it takes from when an order is placed to when the project begins. However, the U.S. market will nonetheless be stronger as a result of the PTC extension, Vestas noted.
Editor’s note: An item in today's Wind Energy SmartBrief, which AWEA sponsors but does not prepare, incorrectly referred to the number of employees affected. More information on the reduction in workforce, direct from Vestas, is available online.
E.ON Climate & Renewables dedicates Anacacho wind farm in Texas
Project completion news for 2012 continued to trickle in this week, with E.ON Climate & Renewables (EC&R) North America dedicating the Anacacho Wind Farm, which went online in December.
The project, located in Kinney County, Texas, is approximately 14 miles southeast of Brackettville and consists of 55 Vestas 1.8-MW turbines providing 100 MW of power.
"We are honored to be a part of the local community, and we look forward to providing economic support and renewable, homegrown energy for many years to come," said Steve Trenholm, CEO, EC&R North America, speaking at a dedication ceremony. "Wind farms create jobs, and provide an economic shot in the arm to farmers, ranchers, and rural communities across America."
Locally, this project will contribute more than $17 million in local taxes, while paying $8 million in local salaries and more than $34 million to landowners. More than 200 people were hired during construction, and the operating facility has approximately 8 permanent positions.
EC&R has invested more than $5 billion dollars in the U.S. in the last five years, creating more than 5,000 construction jobs and another 200 permanent jobs to keep its wind farms up and running.
Anacacho is the 18th operational wind farm in North America for EC&R, a top-five U.S. wind power owner, giving the company more than 2,700 MW online.
Wind generation records fall in Texas, Colorado, Pacific Northwest
By Tom Gray
Three more wind electricity generation records were notched recently, in Texas, Colorado, and the Pacific Northwest, as the increased generating capacity installed last year continues to make its presence felt.
On February 9, a strong weekend cold front that brought needed rain to much of Texas also propelled the Electric Reliability Council of Texas (ERCOT), which operates the utility system serving most of the state, to a new wind power record, with wind generation providing 9,481 MW of power at 7:08 p.m. Under typical conditions, 1 MW of electricity can power approximately 800 average American homes.
The wind generation provided nearly 28 percent of the electricity demand in ERCOT at the time and easily surpassed--by 814 MW, or nearly 10 percent--the previous record of 8,667 MW set on January 29 by 814 MW.
Of the total, according to ERCOT:
- 7,205 megawatts (MW) came from West Texas.
- 1,620 MW came from the Texas Gulf Coast.
- 431 MW came from North Texas.
- 225 MW came from South Texas.
"As wind generation capacity continues to be added in ERCOT and additional transmission lines are being completed to accommodate that generation, we continue to set new records," said Kent Saathoff, ERCOT’s vice president of Grid Operations and System Planning. "While wind generation over the course of a day can change very quickly, improved tools help us predict those patterns and enable us to reliably use this resource to its fullest potential."
ERCOT has more than 10,400 MW of commercial wind power capacity, with the addition of 372 MW in December. Wind power comprised 9.2 percent of total energy used in the ERCOT region in 2012, compared to 8.5 percent in 2011.
The completion of the remainder of the high-voltage transmission projects in the Competitive Renewable Energy Zones by the end of 2013 will continue to improve ERCOT’s ability to move wind power from West Texas to the metropolitan areas where demand on the grid is highest.
ERCOT manages the flow of electric power to 23 million Texas customers, representing 85 percent of the state's electric load. As the independent system operator (ISO) for the region, ERCOT schedules power on an electric grid that connects 40,500 miles of transmission lines and more than 550 generation units.
Wind milestones in Colorado
As 2012 proved to be a banner year for the wind industry nationwide, Xcel Energy in Colorado said February 12 that it also achieved a number of significant wind energy milestones that have continued through to this year. The highlight for purposes of this article came January 16 at 1 a.m., when the utility's system set a new record for wind generation of 1,960 MW.
The new record was spurred in part by the installation and commissioning in 2012 of a 400-MW wind farm built near Limon, Colo., by NextEra Energy Systems. Xcel Energy commented, "The output of that wind farm is purchased exclusively for Xcel Energy customers and helped maintain Xcel Energy’s standing as the number one utility wind provider in the U.S."
According to AWEA, Colorado ranked 10th for new wind generation in 2012, adding 496 MW of new wind generating capacity statewide.
“Our wind resources have proven to be invaluable for our customers in Colorado and have led to very balanced portfolio of generating resources for Xcel Energy,” said David Eves, president and CEO of Public Service Co. of Colorado, an Xcel Energy company. “The costs associated with the acquisition of renewables in 2012 were right for our customers.”
Also of note, at the end of 2012, wind farms serving Xcel Energy Colorado customers generated 5.75 million megawatt-hours of electricity, or more than 16 percent of the approximately 35.9 million megawatt-hours sold during the year. This was a record for the company in Colorado and puts Xcel Energy squarely on the path of meeting its state mandate of 30 percent for wind generation sales by 2020.
The utility also noted that the 5.75 million megawatt-hours (MWh) of wind generation contributed greatly to improving Colorado’s air quality. According to a news release from the company, total wind on Xcel Energy’s system in 2012 helped reduce carbon dioxide emission by an estimated 4,197,500 tons, or the equivalent emissions for the year of more than 793,000 vehicles. Estimated nitrogen oxide emissions were reduced by 4,310 tons. Earlier in 2012, the company had achieved a nationwide record for wind penetration on its system. On April 15, Xcel Energy was serving nearly 57 percent of its total, one-hour demand for electricity with wind generated in the state.
“We believe 2012 was an exceptionally good year for the wind industry in Colorado, as it was an exceptionally good year for the nation,” Eves said. “With wind production in our other Xcel Energy states, we maintained our position as the number one utility provider of wind, and we hope to continue to advance that position this year.”
New wind output record in Pacific Northwest
On February 16, a new record for wind output was set on the main utility system in the Pacific Northwest, the Bonneville Power Administration power system. Wind energy output peaked at 4,402 MW at 4:05 PM, breaking the previous record of 4,344 MW that was set on January 29.
Commented AWEA Manager of Transmission Michael Goggin, "The new wind records being set by these utility systems and others are testament to the fact that large amounts of wind power can be cost-effectively and reliably integrated into utility operations.”
Tom Gray is a communications consultant with AWEA.
Iowa Lakes wind energy professor passes
Craig Evert, an assistant professor in Iowa Lakes’ Community College’s well-known wind energy program, died on Feb. 12.
Iowa Lakes was one of the first schools to receive AWEA’s Wind Turbine Service Technician Program Seal of Approval, back in 2010. Evert, who was 47, was a student favorite and “a good role model” for the future wind industry members, according to his colleagues.
“Teachers of his quality and character are irreplaceable,” said one student.
Evert was passionate about students and wind power, as well as both his home state, Nebraska, and his adopted state, Iowa—both of which, appropriately, are wind rich. He loved to travel throughout those two states and lived in both Burlington and Davenport, Iowa before moving to the lakes area in 2005.
He is survived by his wife Kathy (Orison), parents Leslie and Annabelle Evert of Gordon, Neb., sister Cindy Evert-Christ and her husband Ken of Lincoln, Neb., nieces, nephews, aunts, uncles, cousins, and, his original obituary stated, “his beloved two cats.” Evert was preceded in death by his sister Linda Evert Coleman.
Fitting to the celebration of an avid reader and lifelong learner, in lieu of flowers memorial donations may be directed either to the Spencer Public Library, or to the Evert family (206 28th St. Spirit Lake, IA 51360) in order to establish a scholarship in Evert's name at Iowa Lakes Community College.
Supply Chain Connections
Availon partners with EMA Diagnostik
Wind power industry service provider Availon, Inc., has signed a long-term partnership agreement with EMA Diagnostik LLC -USA.
Under the agreement, Availon and EMA will hold exclusive rights in North America to sell, support, repair and overhaul induction generators, synchronous generators, and variable-speed drives with dual feed induction generators manufactured by the ELIN Motoren GmbH.
Since 1989 ELIN Motoren GmbH has delivered over 6,000 liquid-cooled generators to wind power industry worldwide.
EMA Diagnostik LLC has already set up shop in Des Moines, Iowa. The new facility will serve as a distribution and service center that will complement the up-tower repairs and equipment exchanges.
AWEA Store: It's "Fleece February"—All fleece outerwear on sale!
Choose from jackets (and a vest, too!) in a range of colors for men and women. These full-zip, high-quality plush fleeces—with embroidered turbine designs—keep you warm AND show your support of wind power. And now they’re on SALE, so get them while they're available! Shop the AWEA Store.
WINDPOWER 2013: final days of special members-only early, early discount
The business solutions for wind energy can be found in the people and educational programming at AWEA WINDPOWER 2013 in Chicago, IL. Hear the answers you need, meet the contacts you want and identify the new solutions that will build your success in the wind energy industry. WINDPOWER offers AWEA Committees and Working Groups a venue to convene on important issues and mingle with other industry leaders that are shaping change as AWEA Business Members.
WINDPOWER has never been more relevant to the wind energy industry than right now and registration is open for business. For Business Members of AWEA only: As part of the registration kickoff, receive an additional discount—on top of the early rates—if you register by Feb. 28. Click here for more details on redeeming this offer.
Volume 29, Issue 1521
|Wind Energy Weekly is a publication of the American Wind Energy Association and a service to its Members.
Interim Chief Executive Officer
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