Article for Medill: Power is blowin’ in the wind

About 100 miles west of Chicago, one answer to Illinois’ future energy supply may be blowing in the wind.

In January the state’s first large-scale wind farm — 63, 213-foot tall turbines turning wind into electricity –- got its finishing touches from Navitas Energy Inc., a Minneapolis-based wind farm developer and subsidiary of Spain-based Gamesa Energia S.A.

Near Compton, Ill., the wind farm totals 50.4 megawatts in capacity and spreads over roughly 3,000 acres. Those who own the land the turbines sit upon will receive $2,000 to $4,000 a year for each turbine. With an annual power output estimated to be 126 million kilowatt-hours, the farm could power about 12,000 homes.

“The Great Plains, especially in the winter, is like a vast ocean of wind,” said Greg Jaunich, chief executive officer of Navitas. “There will be a lot of renewable energy installed in the U.S. over the upcoming years.”

He may be right. Wind energy capacity grew in the nation by an average of 24.5 percent a year from 1998 to 2003, when it reached 6,374 megawatts, according to the American Wind Energy Association (AWEA).

Iowa held 471.2 megawatts of that total and Wisconsin held 53 megawatts. Indiana has no wind farms, but in Illinois, two stalled wind farm projects — totaling about 100 megawatts — will begin construction when Congress passes the long-stalled federal energy bill with its wind energy production tax credit.

Jaunich said the declining cost of producing wind energy — which is beginning to make it competitive with fossil fuels — is one reason interest in wind energy has grown from a breeze to gale.

In the 1980s wind energy cost between 38 cents and 40 cents per kilowatt-hour to produce, said Stefan Noe, president of Illinois Wind Energy LLC, another developer of wind farms. He said the cost is now around 3 cents to 4 cents per kilowatt-hour.

In comparison, energy produced by natural gas — before the recent price jumps — costs about 3 cents to 4 cents per kilowatt-hour, said James Johnson, senior mechanical engineer at the National Renewable Energy Laboratory (NREL) in Golden, Colo., by e-mail. He added that power from paid-off coal plants costs about 2 cents per kilowatt hour, and from new coal plants, about 4 cents per kilowatt-hour.

Much of the drop in wind energy production costs can be attributed to the turbine’s blade size.

In the 1980s, wind turbine blades were 15 to 18 meters long, Johnson said. The blades got bigger — the longest today being 75 meters for 7-megawatt offshore wind turbines — as manufacturers better understood their aerodynamic and structural properties. Bigger blades mean cheaper energy because manufacturing costs grow only slightly when the blade gets slightly bigger, but the megawatt capacity increases exponentially, he said.

But the blades probably won’t get any bigger due to the cost of transporting and installing such behemoths, Johnson said. Further cuts in wind energy cost will have to come from improved manufacturing processes or by increasing the quantity of turbines being manufactured in order to hit even better economies of scale.

Even with the huge, cost-efficient turbines, Illinois Wind Energy’s 51-megawatt wind farm in Bureau County — about 120 miles southwest of Chicago — won’t be built until Congress passes the energy bill, which includes the renewal of a wind energy production tax credit.

The credit is 1.5 cents per kilowatt-hour of renewable energy produced. It is adjusted for inflation and was at 1.8 cents per kilowatt-hour before expiring on Dec. 31, 2003, after a two-year extension in 2001. The AWEA has pushed for a five-year extension.

The credit began as independent legislation supported by both political parties, said Kathy Belyeu, a spokesperson for the AWEA. However, it was attached to the energy bill for political reasons and the AWEA’s attempts to detach it and have it passed separately have failed.

The lack of a production tax credit is also holding up construction of Forever Power & Construction Services Inc.’s 44.5 megawatt, $60 million wind farm near West Brooklyn, about 100 miles west of Chicago. The farm’s 27 turbines could be running in eight months once the credit is revived.

The key to the rise of Forever Power’s wind farm — and many others — was the deregulation of electric utilities, said Joyce Papiech, president of Forever Power.

Deregulation, initiated nationwide by an order from the Federal Energy Regulatory Commission in 1996, allows electricity buyers to choose who generates their power. It forced utilities to consider alternative energy sources to keep environmentally-conscious customers who began shopping elsewhere for their power.

“There has been an opening up, a start of changing in the attitudes of some of the electric companies,” Papiech said.

Noe agreed. “You started to see utilities getting more and more comfortable with the idea of wind power and adding wind power to their production mix,” he said.

While all of the power from Forever Power’s wind farm will be bought by Commonwealth Edison, the Chicago-based subsidiary of Exelon Corp., other wind projects weren’t so lucky.

Florida-based FPL Energy LLC, a subsidiary of FPL Group Inc., dropped plans for a wind farm in Illinois when it couldn’t find a utility to buy the power at an acceptable price, a contract typically called a power purchase agreement, said Steve Stengel, spokesperson for FPL Energy.

Had a utility entered a power purchase agreement with FPL Energy, it, unlike some renewable energy producers, would have included the wind farm’s green tags in the sale.

Green tags are certificates that producers of renewable energy get for the renewable energy they produce. The tags, first used around the year 2000, represent the reduction in pollution that occurs when renewable energy is used instead of energy from fossil fuels.

The tags can be bought and sold on an informal, nationwide market. In states with renewable portfolio standards — regulations first appearing in 2000 that required utilities to use a certain percentage of renewable energy — utility companies often buy the tags rather than invest directly in renewable energy facilities, to demonstrate they’ve met those required renewable levels.

Even with green tag revenues, wind farms typically need some sort of power purchase agreement. Renewable portfolio standards, slowly catching on around the nation, would make such agreements easier to secure.

Illinois adopted a voluntary standard in 2001 that is pushing for 5 percent of total energy to come from renewable sources by 2010, and 15 percent to be renewable by 2020. Hawaii also has a voluntary standard and 13 states have mandated standards. In Chicago, Mayor Richard Daley announced that 20 percent of the city government’s power usage will come from renewable energy sources by 2006. But wind energy is still not the cheapest energy supply — and utilities are still businesses trying to make a profit.

“It’s a matter of time before there will be (wind) opportunities here in Illinois that make sense economically,” said Gabriela Martin, manager of Environmental Commitment at Commonwealth Edison. “I think that’s the bottom line. It’s got to make sense for the business.”

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