For the third time this year, Austin Energy has looked to the Texas coast to satisfy its green ambitions.
The utility will pay as much as $29 million per year for electricity produced by a wind farm in Sarita, in Kenedy County near Padre Island, that is capable of generating as much as 200 megawatts.
The 25-year deal with Portland, Ore.-based Iberdrola Renewables Inc. follows two other recently signed coastal-wind contracts, with Duke Energy and MAP Royalty Inc.
The three coastal wind farms are expected to produce enough electricity over the course of a year to power 140,000 average homes, said Michael Osborne, a special assistant to Austin Energy’s general manager.
The contracts mean Austin Energy will be close to reaching its 10-year goal of 35 percent renewable energy by 2020.
“We’ve gotten some good deals,” Osborne said, “and we’re rolling along.”
The Austin City Council is expected to approve the newest contract Thursday. The 84 wind turbines are expected to come online at the end of next year.
Coastal wind is not a clean-energy silver bullet. It does not blow all the time, so other sources, usually natural gas, have to be ready on standby.
But unlike West Texas wind, which mostly blows at night when it’s least needed, coastal wind tends to blow during the afternoon, when the day is hottest and electricity demand is highest.
Austin Energy had rejected several previous coastal-wind proposals because they were too expensive. But now both Austin and San Antonio’s CPS Energy have deemed coastal wind cost-effective.
All three of Austin’s coastal-wind projects will cost it about 4 cents to 4.5 cents per kilowatt hour. Austin will not be paying the wind farms when they are not producing electricity.
Austin Energy officials say those wind contracts are among the cheapest deals available, when the cost of building power plants is taken into account, and comparable to what the historically volatile natural gas market has been offering recently.
City officials say they want to encourage the spread of solar power and other types of renewables, but they have a powerful incentive to prefer wind now.
Electric rates are scheduled to rise 12 percent next year, with previously signed deals for solar (16.5 cents per kilowatt hour) and wood-waste (expensive, although figures have not been made public) partially responsible. Austin’s 10-year plan calls for keeping rate increases to 2 percent after 2012, and wind is now the least expensive renewable widely available.
Austin will be at 30 percent renewable energy by 2013, even when accounting for the fact that some short-term West Texas wind contracts will be expiring, Osborne said.
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