Challenges emerge for wind power

Chris Mulick
TriCityHerald
July 12th, 2006

A preliminary report shows the cost of building and operating Northwest wind farms has shot up by as much as 70 percent in two years.

A series of factors -- including increasing demand for wind farms, rising costs for materials and the weakening U.S. dollar -- have driven up construction prices.

At the same time, Northwest dams don't have enough remaining flexibility to supplement and smooth the up and down generation patterns of new wind farms.

But neither issue was discussed Tuesday before the Northwest Power and Conservation Council is likely to slow wind farm construction.

Costs for building other kinds of power plants also are climbing.

"It's not just wind. It's across the board," said Jeff King, a senior resource analyst for the council.

Instead, the discussion was intended to raise the profile of new issues emerging for a wind power industry that is gaining momentum.

The Bonneville Power Administration, which operates most of the Northwest's transmission grid, has been told of proposed projects totaling 4,800 megawatts of capacity.

"There's a lot of hard hats out there doing a lot of building right now," said Elliot Mainzer, BPA's manager of Customer Service Engineering. "It's really a phenomenal amount of development."

The council includes representatives from Washington, Oregon, Idaho and Montana and is responsible for balancing the needs of fish and power priorities.

Less than two years ago the council projected the cost of power from new wind projects to be from $42 per megawatt-hour to $53 per megawatt- hour.

That's after federal subsidies are subtracted and include the costs of delivery and "shaping," or using other power resources to deliver a stable power flow even when the wind isn't blowing.

But King reported Tuesday at the council's meeting in Missoula, Mont., that new estimates now are from $45 to $90 per megawatt-hour.

The weakening dollar has driven up the cost of buying wind turbines from overseas manufacturers, and commodities such as cement and steel used to build wind farms also have risen in price.

The demand for wind power has increased, fueled in part by the high cost of alternative energy sources such natural gas plants, the looming expiration of a key federal subsidy next year and government mandates in California requiring utilities to buy certain amounts of clean energy.

Washington voters are likely to have their say on a similar measure in November.

The increased demand has created a shortage of turbines and the workers and equipment needed to erect them.

All this "has likely encouraged increased profit taking where possible among players in an industry that has experienced many lean years," King wrote in a report to the council.

While it's likely some costs are tamed by increasingly efficient turbines and other factors could change for the better, "It's unlikely costs are going to drop significantly," King said Tuesday.

Natalie McIntire, a senior policy associate for Renewable Northwest Project, said people shouldn't compare wind power costs to costs of hydropower "but wind versus the other new resources we might build."

Construction costs are just one challenge facing the industry.

Utility representatives warned Tuesday that their ability to use power from dams to fill in wind power's generation gaps is running out.

Dams have long been thought to be an ideal resource for doing just that because operators can easily increase and decrease how much power they generate at any time.

But considerations for fish, recreation and flood control limit how much flexibility dam operators actually still have.

Grant PUD's Kevin Conway reported that while Priest Rapids Dam has a rated capacity of 955 megawatts it often is unable to spare any power to help supplement wind projects.

"There's only a couple months of the year when we have a lot of flexibility," he said.

Casey Johnston representing NorthWestern Energy in Montana said his utility gets 10 percent of its energy from wind farms and that it's becoming more difficult to get that much wind power firmed up.

"We're at 10 percent and we're having issues," he said.

A steering committee of Northwest energy industry officials hopes to begin meeting this month to resolve these and a series of other issues, including transmission constraints, involved with adding large amounts of wind power and other environmentally friendly power plants.

http://www.tri-cityherald.com/tch/local/story/7956605p-7850113c.html

Northwest Power and Conservation Council