American Electric Power announced it wants to enter long-term purchase agreements for 1,000 megawatts of wind energy, including up to 360 megawatts for its eastern United States service territory – where coal has traditionally been king.
The utility giant said it wants to add the wind energy by 2011 as part of its strategy to address greenhouse gas emissions.
On Tuesday the company issued a request for proposals seeking up to 260 megawatts of wind energy for its Appalachian Power unit. Appalachian serves more than 900,000 customers in southern West Virginia, Virginia and Tennessee.
The company also issued a request for proposals seeking up to 100 megawatts of wind energy for its Indiana Michigan Power unit.
The deadline for bids is April 30, with delivery to begin by the end of 2008.
The purchases, if approved by regulators, would mark American Electric Power’s first commercial use of wind energy in the seven eastern states it serves. The company said it will consider proposals for wind farm sites in West Virginia, Virginia, Michigan and Indiana.
It’s unclear how the company’s effort to add wind energy will be received in West Virginia, where almost all of the power it generates comes from coal-fired plants and where wind energy remains controversial.
American Electric Power has a total generating capacity of 36,000 megawatts, so adding 1,000 megawatts of wind energy would not represent an enormous shift.
Coal currently fuels 72 percent of American Electric Power’s generating capacity, while natural gas and oil provide 19 percent and nuclear fuels 6 percent. Wind, hydro and pumped storage together currently provide 3 percent.
West Virginia has only one wind farm – a 44-tower, 66-megawatt facility in Tucker County named the Mountaineer Wind Energy Center. It began operating in December 2002. Many others have been proposed although only one additional project – NedPower’s 82-tower, 164-megawatt farm on Mount Storm – is under construction.
Wind power is controversial. Some opponents say large turbines mar natural views and lower nearby property values. It also has been found that the giant blades on wind turbines kill birds and bats.
Michael Morris, American Electric Power’s chairman, president and chief executive officer, said in prepared remarks, “We face the need for additional supplies to meet our customers’ growing demand for electricity. Using wind energy to help satisfy that increased demand aligns with the desire expressed by many governors for alternative energy resources for customers in their states.
“It also improves our fuel diversity in our eastern footprint, when combined with our purchase of natural gas-fired plants and our plans for two Integrated Gasification Combined Cycle clean coal plants,” Morris said. “With Congress expected to take action on greenhouse gas limits, this added fuel diversity will prove important for our customers and shareholders.”
American Electric Power said the plan to add wind power “is part of AEP’s comprehensive strategy to capture, reduce, avoid or offset greenhouse gas emissions. The addition of wind capacity to AEP’s energy portfolio to meet growing electricity demand avoids an increase in greenhouse gas emissions that would occur if AEP used traditional fossil generation.”
The utility announced in 2004 that it wants to build two Integrated Gasification Combined Cycle coal-fired plants. The company plans to build one 629-megawatt unit next to its Mountaineer Plant at New Haven in Mason County and another across the Ohio River in Meigs County, Ohio.
In its annual report published last month, the utility said it anticipates obtaining the required permits for those plants and finalizing engineering this year. However, higher-than-anticipated construction costs have slowed planning.
Just last month, American Electric Power announced it will invest $50 million to $70 million to install a carbon capture system at its Mountaineer Plant. It will be the first use of carbon capture technology on a commercial scale in the world.
AEP said that in addition to the carbon capture and wind plans, its climate strategy includes “domestic greenhouse gas offsets through agriculture, forestry and other projects; power plant efficiency improvements; and demand-side management/end-use energy efficiency programs to be developed with state regulators.”
American Electric Power currently owns two wind farms in Texas with a total capacity of 310 megawatts. The company also has long-term contracts to purchase 467 megawatts of output from wind farms in Oklahoma and Texas.
The company has more than 5 million customers in 11 states.
AEP had revenues of $1.6 billion last year. The Columbus, Ohio-based utility has 20,400 employees.
by George Hohmann
Daily Mail business editor
4 April 2007
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