New laws, higher demand mean city will rely more on wind power
Colorado Springs Utilities will seek proposals in April for up to 100 times the amount of wind power it now buys, ramping up its presence in an exploding industry as some of its customers clamor for it to be more Earth-friendly.
Since entering the wind market in the late 1990s, the city-owned utility hasn’t bought more than 1 megawatt – a pittance in an 863-megawatt system.
That 1 megawatt of wind power, which can power about 400 homes for a year, is far less than will be required under recently enacted mandates to expand reliance on renewables.
It’s also far less than people want. The city has a waiting list beyond the 869 customers who now pay extra for wind power.
“When we talk to customers, there’s a propensity to be green right now,” said Stephen Knopp with Utilities’ Energy Services Division.
More and more companies are eager to meet that need.
Utilities officials expect up to 30 companies to bid on its wind contract in the next 90 days. That’s 10 times the number the city received when it sought wind bids in 2004. Under the contract, the additional wind power wouldn’t be delivered until 2010.
Efforts to slow global warming have reshaped the power industry as state governments force utilities to add renewables to their portfolios, now dominated by carbon-emitting fossil fuels.
Colorado requires investor-owned utilities to derive 10 percent of their energy from renewables by 2015 and 20 percent by 2020.
The state requires municipally owned Springs Utilities to derive 1 percent from renewables annually from 2008 to 2010, 3 percent from 2011 to 2014, 6 percent from 2015 to 2019 and 10 percent by 2020.
More daunting is the possibility that federal lawmakers will impose carbon taxes to drive down reliance on coal. No one knows how much that would cost, but Springs Utilities could pay $150 million a year – about 16 percent of its current budget. That’s a big incentive to find alternatives, and wind is one of those.
Utilities meets the state’s 1 percent standard today because of its small wind-power purchase and its hydropower plants.
But the city forecasts its peak demand will grow to 1,092 megawatts in 2020 and its energy consumption to 5.47 million megawatt hours a year.
Megawatts are used to measure capacity, while megawatt hours measure units of consumption. A megawatt hour is one megawatt of power used for one hour.
Fifty megawatts of wind yield about 155,000 megawatt hours of energy. Thus, to derive a tenth of its total need from wind alone, the city would have to buy 176 megawatts of wind power.
That suggests the city will be seeking further deals for wind power, especially since people want more.
Although wind costs 2½ cents more per kilowatt hour than traditional energy sources, customers line up for it, Knopp said. The waiting list contains 115 customers.
The city’s most recent poll showed 76 percent of residential customers surveyed are willing to pay $1 to $2 more a month to support wind. That’s the estimated financial impact of using 50 megawatts of wind, which translates to 3.3 percent of the city’s energy needs per year.
The reason it doesn’t account for more is that wind is an intermittent resource, and power is available from it only 35 percent of the time, Knopp said.
Utilities’ customer poll also showed 71 percent of the city’s business customers say they’d support wind power if it causes bills to increase by 1 percent or less.
Colorado already is at the forefront in wind power.
According to a state task force on renewables, in one year alone, 400 megawatts were added in Logan County, 300 megawatts in Weld County and 75 megawatts in Bent County.
Colorado finished the year with 1,067 megawatts of installed wind capacity, ranking sixth in the nation behind Texas, California, Iowa, Washington and Minnesota.
According to Windpower Magazine, the United States has enlarged wind capacity more than any other country for two years running.
In Colorado, 3,300 megawatts of wind and 200 megawatts of solar power must be developed to meet Colorado’s minimum renewable energy standard requirements by 2025, the task force reported.
Denver-based Public Service Company of Colorado, Tri-State Generation and Transmission Association of Westminster and Platte River Power Authority, based in Fort Collins, are among those seeking to add wind capacity.
Carpinteria, Calif.-based Clipper Windpower Inc. is eyeing eastern El Paso County as a wind-farm location.
Having one so close to Colorado Springs might drive down wind’s cost to Springs Utilities customers, because the shorter the transmission distance, the less expensive the price, Knopp said.
“If we purchase from a wind farm that’s way out east or in Kansas, there might be two or three transmission providers we would have to go through to get it here,” he said, “so there would be charges on top of each other.”
The city wants a 20-year wind-power deal, a smart move, according to an industry expert.
Christine Real de Azua, a spokeswoman for the Washington, D.C.-based American Wind Energy Association, said while material costs will rise, the cost of wind won’t change, unlike that of other fuels.
“It may not be the lowest cost, but it will be stable over time,” she said. “You can’t predict the cost of fuel 20 years from now. You can predict the cost of wind will be zero.”
By Pam Zubeck
30 March 2008
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