Green energy has its critics who question whether consumers are getting a fair deal for the premium prices they are paying. “Green” energy, in some cases, more aptly alludes to its higher cost rather than its environmental impact.
Criticism centers on cases where green products on the market have no positive impact on the environment because marketers only resell renewables that other consumers are already paying for and that would continue to operate regardless of any resale to consumers opting for green.
A report, “Green Buyers Beware”, issued late last year by Ralph Nader`s organization, Public Citizen, found renewable energy being resold comes from utilities whose service territories are not open to competition (using California as a case study). The cost of the renewable energy, which comes from facilities that are either owned by or under long-term contract to the utilities, is already being fully charged to the utilities` captive ratepayers.
The report stated, “Most consumers, if informed that they were paying premiums for resources that other consumers are already paying for and that would operate regardless of their purchase, would choose other green products or spend their dollars elsewhere.”
The report also challenged the logic of customers being forced to pay a premium today for electricity from providers for their promise to build wind generation facilities that they will own. “Marketers are usually not rewarded until they have taken risks, made investments, and delivered more desirable products to consumers,” stated the report.
Legitimate “new” green
Enron Wind Corp., a subsidiary of Enron Corp., recently constructed a 22-turbine, 16.5 MW merchant wind power project, which it said is the first major new renewable power plant since California opened its markets to competition and was built solely to supply emerging green power markets. Green Power I was built eight miles east of Palm Springs, Calif., and its Zond Z-750 kW turbines will supply enough electricity for 5,000 typical California households. The power will be sold through retail marketers to residential, commercial and industrial customers, including Patagonia Inc., the outdoor clothing company.
David Olsen, Patagonia`s CEO, said, “With the environmental costs of nonrenewable energy sources becoming less supportable every year, we`re pleased to work with Enron to jump-start a market among corporations for new renewable generation.”
On a smaller scale, Wisconsin Electric (WE), Milwaukee, brought on-line two, 660 kW wind turbines in mid-June about nine miles south of Fond du Lac. Built on private farm property, the Vestas-American Wind Technology turbines` generated power will be used for WE`s Energy for Tomorrow Renewable Energy Program.
Begun in June 1996, Energy for Tomorrow offers three participation levels to WE`s 1 million consumers. At the 100 percent level (1,343 customers as of end of June), the additional cost to the customer is two cents per kWh. The 50 percent level (2,405 customers) adds one cent per kWh, and the 25 percent level (7,085 customers) adds one-half cent per kWh.
The program also includes a combination of existing biomass and hydro facilities not fully utilized, including small hydro facilities in Wisconsin.
Margaret Heffernan, WE spokesperson, said WE contracted with Minnesota Power for biomass and hydro generation. Contracts for small hydro facilities in Wisconsin include Cedarburg, Watertown and Neshkoro.
She added, “The hydroelectric of our regular fleet is not included. It has been with us for many years and can`t be part of the program. These customers are voluntarily paying a slightly higher electric rate simply because they support green power-that takes on added significance.”
The main obstacle to development of WE`s wind turbine site was initial concern of the Federal Aviation Administration that the turbines would be in the flight path for approach to the Fond du Lac airport. Heffernan said, “We did additional measurements and surveyed and determined they were not.”
Hurdles to jump
Cedar Falls Utilities, Cedar Falls, Iowa, is part of a consortium of seven Iowa municipal utilities owning a 2.25 MW wind farm near Algona, Iowa. The Iowa Distributed Wind Generation Project (IDWGP) includes three, 750 kW Zond Z-50 wind turbines.
Planning for the project began in June 1997 and included a contribution of about $1.4 million from the Department of Energy-EPRI Wind Turbine Verification Program. The utility consortium provided the remaining $1.4 million.
Construction began in August 1998 and was completed in November. In the first four months of commercial operation, the wind farm generated about 2.6 million kWh, enough electricity to power about 830 households in the consortium`s service territories.
Doris Kelley, Cedar Falls Utilities` marketing coordinator, summed up their main obstacle in a few words: “Renewable is very feasible if you can tie into your own distribution system.”
The wind farm`s location near Algona required wheeling across two transmission systems to reach Cedar Falls Utilities` distribution system.
Dave Martin, Cedar Falls Utilities` strategic projects coordinator, said the pancaked transmission charges resulted in electricity originally generated at 3.5 cents per kWh to be boosted up to a cost of 12 to 13 cents per kWh.
He added, “On a day like today (late July) in the high 90s and very humid, there`s very little wind to work with. On a day like that, wind isn`t much use.”
Kelley and Martin said other renewable generation is being studied, including burning sludge from a waste treatment plant and burning wood chips and corncobs. However, Martin said, “We`re not going to get real serious until the administration specifies a renewables mandate.”
This Silver Eagle turbine at Sacred Heart Monastery, Richardton, N.D., is located in the midst of the top-ranked wind areas within North Dakota.
NORTH DAKOTA WIND CLOSE-UP
Winds blustering across the rugged terrain of western North Dakota are welcome near the small community of Richardton. Two wind turbines standing tall above wheat fields surrounding the Sacred Heart Monastery turn into the westerly winds and bring a smile to the face of a woman standing nearby.
Sister Paula Larson, prioress of the monastery, is of the opinion that this small-scale green energy project may be the nascent stage of a potentially large, MW-scale wind farm.
National statistics for wind energy potential support her opinion. North Dakota ranks first in the accompanying table showing the top states for wind energy potential-and the monastery is located in the midst of the top-ranked areas for wind within North Dakota.
According to Department of Energy studies, North Dakota alone has enough potential energy from wind to supply 36 percent of the 1990 electricity consumption of the entire lower 48 states. However, as of May 1999, the American Wind Energy Association listed total installed wind capacity in the state as only 0.39 MW.
Sr. Paula said future development depends on economics, which in turn depend on the eventual outcome of restructuring.
The Sisters of the Order of Saint Benedict first considered the possibility of wind turbines about 15 years ago when Sr. Bernadette, a biochemist, introduced the idea. Although the Sisters dropped the idea at that time, Sr. Bernadette remained interested and eventually became involved with the Dakota Resource Council, an organization formed in 1978 to protect North Dakota`s land, air, water, rural communities and agricultural economy. Her continued championing of the idea led to a search for wind turbines in 1995.
The Sisters considered the wind project because they already had three options available for heat-coal, natural gas and fuel oil. “With electricity, we thought, `do we need to be totally dependent on one source?`” said Sr. Paula. “And we didn`t need a $10,000 study to tell us the wind blows. We just went out there.”
The used Silver Eagle 100 kW turbines were purchased in 1996 in Livingston, Mont. With an initial purchase cost of $120,000, and “after a year or more of stress and strain working out all the difficulties with installation, the negotiations with the rural electric cooperative, and our own internal problems, the turbines were up and operating on June 16, 1997,” wrote Sr. Paula in the first annual report in 1998.
Sr. Paula said, “We couldn`t find anyone who could interconnect with us. An engineer and the rural electric cooperative (REC) didn`t know about wind. The organization most helpful to me was a grassroots organization, the Dakota Resource Council.”
The wind turbines` first-year performance was successful. Sr. Paula said, “I was fully prepared to say these would be a flop. The utility said it wouldn`t work. In my mind, I thought, `If it works in other parts of the world, why not here?`”
The wind turbines were set at 62.5 kW each, providing a total generating capacity of 125 kW, which is also the maximum load requirement for the main building. The building contains the residence for 25 Sisters and the Spirituality Center, a facility available for spirituality workshops or organizational/professional retreats. From September through May, 2,000 to 2,500 people visit the center.
The turbines generate electricity at 480 V, which is transmitted via underground wire to a step-up transformer at a utility pole. The resulting 12.5 kV power is then transmitted via the distribution REC`s wires to a step-down transformer in the monastery building.
After one year of operation (minus 150 days of no wind or maintenance), the wind turbines produced 132,130 kWh of the 355,990 kWh required by the Sisters. The avoided cost of this electricity, had it been purchased from the distribution REC at 8.754 cents per kWh, was about $11,600.
When discussing the payback for excess electricity generated by the wind turbines, Sr. Paula highlighted one of the economic realities that often mars the feasibility of such projects. She said, “If MDU, NSP or Otter Tail (investor-owned utilities) were our provider, we could use net metering.” The distribution REC`s policy is “use it or lose it.”
Upper Missouri G&T Electric Co-op, Sidney, Mont., the generation and transmission co-op that supplies the distribution REC, paid 1.14 cents per kWh to the monastery for the excess 47,280 kWh, for a total compensation of about $540.
Overall savings, therefore, amounted to about $12,000 in the first year of operation.
Sr. Paula said she would like to be able to sell the excess electricity generated by the wind turbines to the farmers and ranchers in the neighboring areas for about 2 cents per kWh-“I`d be ahead since I get only 1.14 cents from the G&T REC.”
The only significant operational problem was weather-related. Sleeting ice sometimes caused the wind sensor located atop the turbine head to freeze up, preventing the turbine heads from turning into the wind.
When asked about bird kill resulting from the rotating turbine blades, Sr. Paula said, “There hasn`t been one single bird dead. We have more birds killed by hitting our windows.”
Sr. Paula noted an additional benefit-observing that the 21 llamas on the monastery`s land tend to sit under the turbines in the summer, she said, “I`m thinking we installed fans for them.”
Future plans for larger wind turbines-and perhaps the establishment of a wind farm-depend on “if the state of North Dakota becomes more feasible, with payback more feasible.” Currently, the state is not aggressively pursuing deregulation. An electric utilities committee was established and continues its discussion of tax implications of restructuring and electric rates of investor-owned and cooperative utilities.