Wind Energy Weekly Vol.15, #697, May 1996

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The following is the electronic edition of WIND ENERGY WEEKLY, Vol. 15, #697, 13 May 1996, published by the American Wind Energy Association. The full text of the WEEKLY is available in hardcopy form for $595/year and is recommended for those with a serious commercial interest in wind (the electronic edition contains only excerpts). A monthly hardcopy publication, the WINDLETTER, more suitable for those interested in residential wind systems is included with a $50/year individual membership in the Association. AWEA's goal is to promote wind energy as a clean and environmentally superior source of electricity. Anyone sharing this goal is invited to become a member--please help!. For more information on the Association, contact AWEA, 122 C Street, NW, 4th Floor, Washington, DC 20001, USA, phone (202) 383-2500, fax (202) 383-2505, email windmail@mcimail.com. Or visit our World Wide Web site at http://www.econet.org/awea

ENERGY POLICY

Agency support can boost U.S. in world markets, says AWEA AWEA backs FERC rule, addresses implementation

TRADE NEWS

Wind is a money-maker for Texas Land Office

GOVERNMENT AGENCIES CAN ASSIST U.S. ABROAD, SAYS AWEA

On April 23, AWEA's director of government relations Karl Gawell testified before the House Subcommittee on Foreign Operations, Export Financing, and Related Programs, urging the Subcommittee to support the wind industry through funding and guidance for the U.S. Agency for International Development (USAID) and the U.S. Export-Import Bank (Ex-Im Bank).

Gawell recommended the Subcommittee ensure that U.S. wind companies retain a leadership position in the booming international wind market by continuing to provide strong guidance to USAID to integrate renewable energy into its diverse portfolio of activities; and giving the Ex-Im Bank "the budget and latitude it needs to continue its recent, but vital, work to help the U.S. wind industry overseas."

While citing the tremendous growth the world wind market has experienced over the last year, Gawell pointed out that the U.S. has begun to lose its footing. Other governments have instituted policy to support technology and market development, but "The U.S., on the other hand, has had inconsistent support on technology development, driven largely by partisan battles," he said.

Gawell went on to stress the crucial part USAID and the Ex- Im Bank play in maintaining U.S. competitiveness and illustrated the cost-effectiveness of providing low cost "tied aid" credits for wind projects overseas. (The term tied aid refers to the practice of granting financial aid to a developing country on the condition that the funds be used to purchase equipment made in the donor country.) Providing such credits results in no net cost to taxpayers, and much of the tax revenue generated is collected within the first year or two of the loan, he concluded.

The small turbine market is also growing rapidly, said Gawell. However, he pointed out' "[T]hese markets are heavily driven by bilateral aid and multilateral lending made necessary because huge subsidies are poured into other solutions such as grid extension or diesel electrification, even when wind or other small-scale renewables represent the lowest-cost economic solution." USAID's renewables program is vital to ensure that the U.S. is competitive in the growing worldwide small turbine market, he said.

"The Ex-Im Bank should be lauded for its recent approval of the first tied aid match for the wind industry, but it is a few million dollars in an over $1 billion annual market mat is heavily influenced by tied aid," said Gawell. "The Ex-Im Bank cannot do it alone. USAID must help . . . "

MAURO SEES WIND AS INCOME PRODUCER FOR WEST TEXAS

Wind energy can be a major producer of funding for education in the state of Texas, Commissioner Gary Mauro of the Texas General Land Office (GLO) told members of the National Wind Coordinating Committee April 30 in Austin, Texas.

The GLO, Mauro said, is "responsible for managing 20 million acres of land, with 18,000 oil and gas wells and $2.5 billion in royalties. We're landlords--I like to think enlightened--but basically landlords."

The GLO recently collected its first monthly royalty check, for $29,000, from Lower Colorado River Authority's (LCRA) 35-MW wind power plant in West Texas developed by Kenetech. "We'll sit back for 35 years and collect checks from that wind plant--it's much more lucrative than anything else in west Texas--and in the end, I expect the school fund will get about $3 million over the life of the facility," said Mauro.

Land values in that part of the state have increased since the wind plant was built, he added. "Land values have gone up by something like $5 an acre, which doesn't sound like much, but land out there is only worth around $50 an acre, so you're talking about an increase of 10%, which is pretty substantial.

"Texas," Mauro said, "is land. If you think about renewable energy--solar and wind--as a way to provide rents and income for landowners, it will get you a whole new set of allies that you haven't had in the past. We want to be involved with renewable energy. Those who question this position are near-sighted--it's going to grow exponentially in future decades."

Mauro spoke as a member of a panel describing Texas's experience to date with wind power. Utility members of the panel were also upbeat in describing their wind and renewable energy activities.

LCRA's Tom Foreman acknowledged that a number of turbines in the plant were damaged by winds January 17. Winds at the site during the January storm were clocked at more than 160 mph. But, Foreman added, 98 of the 112 machines were "back on line fairly quickly." The project, he said, "has been pumping about 25 to 35 MW all winter long."

Foreman also noted that the wind plant had gone up quickly: "We signed (a power purchase agreement] in March [[1995]. In June, they were putting the towers up. Some turbines were completed in July, and by August 31, we had 25 MW in operation." Availability of the units was 85% in the first month and has ranged between 93% and 97% since (not including the machines damaged by the windstorm). Added Foreman, "All of us have seen accounts that the 33-meter machine is no good. Well, they've had some problems, but not severe. The units (in our wind plant] have been doing fairly well."

Ward Marshall of Central and South West Corp. (CSW), which owns a wind plant near Fort Davis, Texas, consisting of 12 Zond Corp. Z-40 turbines, said the project has been a "tremendously valuable" learning experience for the utility. "This project is all about information dissemination," he said. "We want to share what we find out with other utilities, so that they know the true story about wind and how it can work. We're doing a lot of evaluation on how the turbines perform." The CSW wind plant, Marshall said, experienced 117 mph winds during the January 17 storm, but suffered no damage (see Wind Energy Weekly #684, February 12, 1996).

The area around the Fort Davis plant has "some golden eagles," Marshall said, and observers have noticed a change in their behavior. "The number of birds going through the site has dropped dramatically [since it began operating]," he said. Golden eagles have died in collisions with wind turbines in California's Altamont Pass, but Marshall said the Fort Davis facility has larger turbines with slower-moving blades and "we're guessing that the machines are more visible and noticeable to the birds."

AWEA URGES FERC TO CONSIDER RENEWABLES IN DRAFTING NEW TRANSMISSION RULE

On April 29, AWEA Executive Director Randall Swisher responded to the issuance of the Federal Energy Regulatory Commission's (FERC) open transmission access rule (see WIND ENERGY WEEKLY #695, April 29), saying AWEA is "broadly supportive" of the direction taken in the rule, but urging the Commission to ensure that transmission pricing and operational issues are implemented in a manner that recognizes the unique aspects of renewables.

"Defining the terms and conditions under which access is to be made available will determine the extent to which renewable energy resources are hindered or facilitated in the emerging competitive market," said Swisher. "To avoid discrimination against renewables, it must be ensured that policies relating to transmission pricing and system operation do not impede wind energy because of its characteristics such as intermittence and distance from load centers."

Swisher said competitive markets will not necessarily damage the environment if renewables gain an adequate market share, and suggested the renewables portfolio standard (RPS) as a way to advance renewables in competitive markets. The RPS is a market- oriented approach which would require sellers of power within a given jurisdiction to procure a minimum percentage of their power from renewables.

Swisher praised the Commission's reinforcement of state authority to shape resource portfolios, but noted that competitive markets are likely to restrict the ability of states to take aggressive action to encourage diversity. "Thus, FERC's decision makes it more imperative for Congress to act on federal restructuring legislation to establish the minimum federal standards necessary for competitive electric markets to adopt market-oriented renewables requirements, such as the RPS," he said.

Industry consensus seems to be in favor of open transmission access, but many of the details, including the transmission pricing issue raised by AWEA, will be the subject of much discussion. For example, while renewables advocates support a single transmission access fee, a coalition of energy providers, municipal utilities, and public interest groups has formed to oppose such "postage stamp" rates. The Coalition for Comparable Transmission (CCT) proposes that access fees be charged for each transmission system used--an approach that has been termed "rate pancaking." This type of distance-based transmission pricing system could hinder renewables because of their distance from load centers. "This is a crucial issue for FERC to address," said Swisher. "If transmission rates are pancaked, renewables will be unfairly disadvantages and regional markets for electricity will be undermined."

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