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Wind energy is forum focus
By Larry Dreiling
Using wind generation to bring income generation to rural Colorado was the primary topic of the 2004 Colorado Agricultural Outlook Forum, held recently at Denver.
With the theme "Profits Outside the Box: Agri-Energy and Beyond," more than 350 people heard from speakers discussing wind technology and other forms of renewable energy as a way of increasing farm revenue.
The primary speaker was Larry Flowers, a team leader at the National Renewable Energy Laboratory's (NREL) Wind Technology Center at Golden, Colo. Flowers told the gathering that Colorado's developable wind electric potential is over 212,000 megawatts.
"There are now two projects, consisting of 60 megawatts, because people chose wind as part of their energy portfolio," Flowers said. Those projects are a 31.5-megawatt wind farm at Ponnequin, along the Colorado-Wyoming border and a 29.7-megawatt farm near Peetz.
Nearly ready to go online is Colorado Green, a 162-megawatt wind farm near Lamar. Constructed late last year by the Shell Renewables division of the Royal Dutch Shell Group and the PPM Energy division of ScottishPower, the wind farm adds to the U.S. wind power capacity of 6,374 megawatts. The wind farm will sell its energy to Xcel Energy, Colorado's primary electric utility.
Flowers told the group that in years past, wind had always been thought of as a premium-priced energy product. While fluctuations have lately been seen in the natural gas market, the price of wind energy has come down dramatically, from about 40 cents per kilowatt-hour to contract prices of three cents per kilowatt-hour, a far lower cost than new natural gas or coal resources.
"As a result of that uncertainty in gas prices, Xcel Energy has abandoned their expansion plans for using natural gas for electric generation," Flowers said. "Across the country, natural gas is being used as the fuel of choice for natural gas electric generation. That's going to create tight supplies on us for natural gas. That issue has challenged the future of natural gas as a source of generation of electricity.
Flowers told the group that Xcel Energy measured costs of energy resources in its Minnesota division and found wind in that state to cost $25 to $35 per megawatt-hour or 2.5 to 3 cents per kilowatt-hour. New coal and natural gas resources cost anywhere from $45 to $55 per megawatt-hour.
"Wind is half the price, that's why they're going to be putting in 139 megawatts of wind generation this year in Minnesota," Flowers said. "They are doing this strictly on price, not counting anything on the environment, and the people up there are going to benefit.
"Wind generation takes place in rural areas. It's rural technology. It has a huge benefit to rural areas. That's why groups like Farm Bureau, Farmers Union, and stockgrower and grain grower groups are behind this. It is a crop of the future."
For the same reason, Flowers said, the Colorado Public Utilities Commission recently came up with the same conclusion, granting Xcel Energy a permit for the Prowers County wind farm, which would bring revenue into southeast Colorado in the form of lease payments at 2 percent to 3 percent of gross revenue per year.
"That's $2,000 to $4,000 per turbine every year for the next 20 to 30 years. There are also taxes from that coming into the county," Flowers said.
Unlike traditional electric generation facilities, once a wind tower is constructed, costs are low, since money isn't spent on traditional fuels.
"Wind energy primarily is a capital investment. It's a known cost," Flowers said. "There aren't analysts out there wondering what the cost is going to be, like you do with those who look at natural gas futures. There's no risk associated with wind.
"You know what your costs are: The costs of wind turbines, operation and maintenance, financing and repayment costs. Actual energy costs will be flat compared with variable and uncertain natural gas futures."
Flowers said he has heard wind towers being called "combines in the sky," because they can reap income for producers on whose land is occupied by wind generators.
It can also bring a turnaround for flagging rural areas.
"Let's face it, George W. Bush is not exactly known as a tree-hugger, but in 1999 he signed a bill into law as governor of Texas called the Renewable Portfolio Standards because of economic development," Flowers said.
The Texas law requires each retail electric provider, municipally owned utility, and electric cooperative operating in the state to obtain three percent renewable energy supplies as a percentage of its annual capacity requirements by Jan. 1, 2009.
"West Texas was dying because of the depletion of natural gas," Flowers said. "Rural schools and rural communities were dying. West Texas also is a very windy area. There's now 2,000 megawatts of wind energy generation in west Texas. That's $2 billion invested in west Texas and the schools and communities in that area are benefiting enormously because of that investment in wind energy."
Unlike drilling for oil or gas, wind resources are already proven, Flowers told the group. The Department of Energy's Wind Program and NREL recently published a new wind resource map for the state of Colorado.
This resource map shows wind speed estimates at 50 meters above the ground and depicts the resource that could be used for utility-scale wind development. Future plans are to provide wind speed estimates at 30 meters, which are useful for identifying small wind turbine opportunities.
The map is available at the following address:
http://www.eere.energy.gov/windpoweringamerica/images/windmaps/co_50m_800.jpg
"This map indicates the excellent resource areas within the eastern quarter of Colorado are concentrated near the New Mexico and Nebraska borders. An area of excellent-to-outstanding resource is located along the Wyoming border north of Fort Collins, where the Ponnequin site is located," Flowers said. The exposed ridge crests of the Front Range, the Continental Divide, and in western Colorado also have good-to-outstanding wind resource."
The interest in wind energy sales to utilities is growing, with 20 states now having significant wind development.
"In Fargo, N.D., where it was minus 48 degrees, there were over 500 people at a meeting recently to learn how they could profit from wind energy," Flowers said. "That would be an export commodity. Farmers could take out an acre of production and get $4,000 a year for a wind turbine. That's like gold and they are very interested in that."
Meanwhile, smaller wind turbines are popping up as well, Flowers said, on the order of three to 10-kilowatt units for household use on up to 50 kilowatts to power irrigation units.
"Wind is now cheaper than natural gas. It's clean and it's a great resource for Colorado," Flowers said. "We have wind blowing over so much of the farm and ranch land in this state. Let's capture that wind and generate some rural economic development for the landowners and the communities."
Date: 3/18/04
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