Wind Works - -But Not in Florida

By Lewis Tagliaferre | Jun 15, 2005
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Coal is too dirty. Uranium is too dangerous. Gas is too expensive. Oil is too political. Solar is too sporadic. Hydro-dams upset the fish habitat. Despite pressure to find new sources of clean, renewable energy, wind power has stayed in the background although it is gaining interest in a several areas of the country.

Wind produces electricity by turning the blades of a turbine attached to a generator. A large wind tower can produce up to 2.5 megawatts, enough power to supply more than 800 households. Modern turbine towers are taller than a 20-story building, rising 400 feet.

Studies by the California Energy Commission, energy researchers and others put the average cost of new wind power production 4.93 cents per kilowatt/hour, compared with 5.18 cents per kWh for a natural gas generating plant. This benefit, plus the “green” environmental attributes, makes wind power more attractive to purchasing utilities. There is, however, some opposition by environmentalists and NIMBYs because wind towers ruin the aesthetics of the landscape, while others oppose them because of the potential harm to birds.

Volatile fossil fuel prices have boosted interest in wind power, because the prices are typically negotiated into long-term contracts. Since suppliers can lock in a price for 10 to 25 years, wind power has become competitive. Government researchers believe wind could eventually supply about 20 percent of national demand, thanks to new technology that has lowered costs allowing wind to compete with other energy sources.

The U.S. Department of Energy has set a 5 percent goal for wind power by 2020. A South Florida energy company has taken a leading role in developing new wind power projects on a national scale. Here is an inside look.

FPL Energy LLC, a unit of Juno Beach-based FPL Group Inc., has invested more than $2.7 billion over the last three years to buy and develop wind-energy projects, making it the country's biggest wind-power generator. With 43 wind farms across the nation and about 6,500 turbines, FPL has 2,719MW of wind-power capacity or 25 percent of its overall generating capacity.

It controls 43 percent of the country's 6,300MW capacity and generated nearly 40 percent of the total wind energy in the nation in 2003. In 2004, it produced more than 6.6 million megawatt hours, enough power to serve more than 500,000 average homes.

FPL estimates that it would have taken 32,579 train cars of coal to generate the same amount of electricity as its wind farms. And unlike fossil fuel plants, FPL wind farms were making pollution-free electricity, keeping more than 4.4 million tons of carbon dioxide, nearly 12,000 tons of sulfur dioxide and more than 8,300 tons of nitrogen oxide out of the atmosphere.

“We're seeing increasing customer interest in wind because of the higher cost of natural gas and oil in certain places, like California and Texas,” said Michael O'Sullivan, FPL's senior vice president of development. “And other customers view wind power as a good economic decision, rather than just a good environmental decision.

FPL's strategy, he added, is to continue growing the wind business, investing in 250MW to 500MW of new capacity each year. But the company faces several challenges. Wind investments return rates are linked to the federal tax production credit, and FPL's planned investments are pegged to its continuation, which Congress alternately cancels, renews and modifies.

In 2003, FPL and other companies invested about $2 billion in wind-power projects, adding enough new capacity to provide electricity to nearly 500,000 homes, according to the American Wind Energy Association.

Companies planned to make similar outlays last year, but Congress permitted the production tax credit to expire, taking the wind out of investors' sails. While ongoing projects continue to benefit from earlier versions of the credit, any new investment this year must requalify now the credit was extended.

Even without the tax credit, O'Sullivan said wind power is profitable for FPL. But the credit provides a stronger rate of return, making wind a more attractive investment alternative. With the renewed tax credit, FPL plans to develop more U.S. wind capacity, including construction of 71 turbines in Oklahoma. It is also looking for European wind-investment opportunities.

FPL's energy subsidiary got into the wind business as part of a diversification plan in 1989 when it bought a 50 percent interest in a Kern County, Calif., wind farm. The company later bought other wind projects, took over operations and began developing its own projects. Before building a wind farm, FPL collects data on potential sites, “usually in the middle of nowhere,” O'Sullivan said. Data includes regional demand for energy, average wind speeds and patterns, land availability, generating potential and proximity to electric transmission lines.

Although wind farms may be built across many acres, the towers and access roads use little space and leave room for ranchers and farmers. FPL wind farms are generally built in crop and grazing land where landowners, who receive lease payments for their land, can graze or plant right up to the turbine foundations.

Once a site is identified, usually on flatlands or a ridge in hilly terrain, the company meets with local landowners and community representatives to discuss their plans, offering landowners lease payments under long-term agreements.

Typically, a landowner will receive from $2,000 to $4,000 per year, per tower. All wind farm towers are connected to a nearby power grid and feed into the system. Since the wind is not always blowing, a wind farm's output is only a percentage of its potential. A tower capable of generating 1.5 to 1.8MW costs between $1.5 million and $1.8 million, and can take three to six months to complete.

FPL, which has farms in 15 states, built its wind-power business by linking up with utilities and other wholesale energy purchasers. For example, it supplies PPM Energy, a Portland, Ore.-based regional utility that sells to cities throughout the West. FPL built three wind facilities in northern California, Wyoming and on the Oregon-Washington border specifically to supply PPM.

FPL assumes the project and construction risk and PPM assumes the marketing risk. But it is not planning any wind investments in Florida, except for a few turbines to show off the concept. Despite an abundance of windy weather, especially thunderstorms and hurricanes, the state-and much of the Southeast-does not offer sustained wind patterns that make large wind energy investments feasible. EC

TAGLIAFERRE is proprietor of C-E-C Group. He may be reached at 703.321.9268 or [email protected].


About The Author

Lewis Tagliaferre is proprietor of C-E-C Group. He may be reached at 703.321.9268 or [email protected].





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