Assessing the Economic Development Impacts of Wind Power, FINAL REPORT; Prepared for National Wind Coordinating Committee; February 12, 2003; an 81-page PDF.
page ES-1
Introduction
Interest in wind power development as a means of expanding local economies is growing. It holds promise for providing a new source of short-term employment during construction of the facility and long-term employment from operating and maintaining the facility. It may add to the supply of electric power in the area and support some expansion of the local economy through the ripple effect of initial increases in jobs and income.
Despite a growing body of information about the local impacts — both positive and negative — of wind power, the economic impacts of existing wind power developments have not been analyzed in a consistent manner. This study uses three case studies {this abstract focuses on the Lake Benton study} to estimate the effects of wind power development on local economies. Both the effects of the construction and the annual operation and maintenance were studied.
Objectives
While there is a growing body of information about the local impacts of wind power, the economic impacts from existing wind power developments have not yet been documented and analyzed thoroughly and consistently.
The primary objective of this study is to provide examples of thorough and consistent analysis and documentation of economic impacts from wind power development.
page ES-2
Case Studies
The three case study areas are Lincoln County, Minnesota; Morrow and Umatilla counties, Oregon; and Culberson County, Texas. In Lincoln County, the project studied was Lake Benton I, placed in operation in 1998 with 107 MW.
To understand how an economy is affected by some external change, we develop a snapshot of the economy at a particular point in time. This snapshot shows us that some parts or “sectors” in the economy are linked to each other.
The extent to which exports {products sold outside the local area} are able to expand the local economy is greatly dependent on how much of the money received remains in the local economy. As money is received for exports, the local supplier then spends that money.
The household sector is linked to all economic sectors as it provides the labor and management needed by all sectors. Changes that affect the incomes of the household sector typically have significant impacts on a local economy compared to a change in the sales of other sectors.
page ES-3
Lake Benton I is the second wind power development in Lincoln County, the first being Buffalo Ridge (25 MW), just southeast of the town of Lake Benton. Lake Benton I consists of an array of 143 Zond 750 kW turbines located in several northwesterly strings from Lake Benton. Enron Wind {now GE Wind} brought the facility into production in August 1998, and the power is sold to Xcel Energy.
This study found that a total of about eight jobs and over $98,000 in personal income in the Lincoln County economy were supported by the construction phase of the project. While this study focused on Lincoln County impacts, additional jobs were also supported in neighboring counties. A total of about 31 jobs and over $909 thousand in personal income in the Lincoln County economy are supported annually by the operation and maintenance phase of the project.
The Lake Benton I wind power development resulted in the payment of $71,800 in total county property taxes in 1999, $611,200 in 2000, and $621,000 in 2001. Assuming that the project caused zero or only minor increases in government and school budgets, these tax payments have decreased the tax burden of other local taxpayers, as they pay less taxes than they otherwise would. This has a direct effect on household income, which is equal to the taxes paid by the project owner.
The Lake Benton I wind development includes lands that have been leased, as well as permanent easement purchases. Landowners receive a total net (after-tax) annual revenue of $501,125, which is a direct effect on household income.
page ES-5
Summary and Conclusions
Tables ES-1, ES-2 and ES-3 summarize the impacts of wind power development on
• employment
• income and
• taxes
for the three case study areas, during the initial construction phase, and the operation and maintenance phase.
Based upon our analysis of the three case study areas, we can draw the following conclusions about the economic impacts of wind power development in local areas
• in each of the case study areas, wind power development provided a modest to moderate source of new economic activity and new family wage jobs
• the leasing of land has an important economic effect on local areas, provided the income from leasing goes to local residents and adds to local household incomes
page ES-6
• tax effects, particularly property taxes that support local entities, were important in all cases
• the counties represented in the case studies had comparatively few economic sectors
• a major difference among the case study areas was the current rate of economic expansion.
--While wind power development was important to the economies of all case study areas, it was relatively more important to the counties in decline and
• the return on capital could be an important component of local annual income.
--In the three case studies, little or none of this income was received by local residents. Local ownership, where feasible, would retain more of this income in the local area and increase the size of the impact. No data was collected on sources of capital for this study, but little apparently came from the local area.
In recent years, there has been considerable interest in a value-added approach {mentioned at the 13 June post} to economic development in rural areas. This generally involves adding additional processing to an existing output or resource, which results in a more valuable product being exported from the area. Wind power development fits this approach by adding value to an existing resource. In this way, it can be a valuable means for adding to the economy.
page 3 - 4
Economic Links in Rural Economies
The more money spent within the local economy, the larger the local impact from the initial money received for the export. This round by round pattern of spending associated with export production is called the multiplier effect.
page 5
Identifying Construction Needs
To measure the effect that the construction of a wind power project has on a local economy, we need to identify the mix of things (inputs) that are necessary to construct a wind power project, and we need to do so in a way that allows us to relate this information to the picture we have of the economy.
page 6
Identifying Operation and Maintenance {O&M} Needs
A similar procedure is followed to estimate the effect of annual operation and maintenance activities on the local economy.
page 8
Local Interest in Wind Power Development
Residents and administrators of rural counties are generally supportive of new businesses locating in their county that will provide family wage jobs locally.
Landowner Revenues
Wind power developments can be a source of supplemental revenue for landowners in rural areas.
page 9
Job Creation
We are interested in the creation of new jobs because new jobs increase business and household income, which in turn creates more jobs which further increase business and household income, and so on. {"Direct" jobs are in the manufacturing, prospecting, planning, assessing, documenting, transporting, construction, installation, operation and maintenance work, where "hands-on" is routine. "Indirect" jobs are those in housing, retailing, hospitality, schools, barbershops and salons, banking/finance, suppliers, vendors, and all others that make "hands-on" possible.
Tax Effects
Taxes are a redistribution of benefits from wind power production to the federal, state, and local government jurisdictions in which the wind power production and sales occur.
pages 12 - 32
Economic Setting for Case Studies and Economic Effects on Case Study Economies
Lake Benton I (1998, 107 MW): The Economy of Lincoln County, Minnesota is promoted by the local tourism groups both as the “Little Europe” of Minnesota, and the “Windpower Capital of the United States.” The county is located in southwest Minnesota, bordered on the west by South Dakota. {Minnesota is ranked 9th in the nation for annual wind power potential; South Dakota is ranked 4th. Minnesota's "wind-friendly legislation and taxation spur its wind industry to outpace South Dakota's by a huge margin, 895 MW to 44 MW.}
In addition, a number of tables and charts are provided in these pages.
____________________________
A boring South Dakota day, mustering only four hours of "fair" (NREL) wind-
• 8 PM Jun 14, S at 15 mph
• 6 PM Jun 14, SSW at 16 mph
• 5 PM (21) Jun 14, S at 16 mph
• 4 PM Jun 14, SSW at 16 mph
• 10 PM Jun 13, Calm.
Do contact me if you want to buy any of this blog's content or would like to have other specific wind power-related content uncovered.
'Til next time. Best Wind.
Thursday, June 14, 2007
Wednesday, June 13, 2007
Wind power and wind energy definitions #3
Before getting to the definitions, a proposed change in the 2007 "Farm Bill" and farm energy has to be mentioned so producers can think about their businesses.
In late May, the former Senators Bob Dole (R-KS) and Tom Daschle (D-SD) released "New Markets for American Agriculture", a report by the 21st Century Agriculture Project, sponsored by the Bipartisan Policy Center. The report highlights investing in biofuels and wind farms to provide farmers and ranchers with new and diversified sources of income. One mentioned changein farm energy projects was "... streamline the application process for smaller, standardized projects by reducing paperwork."
HR 2154 IH is cited as the "Rural Energy for America Act of 2007" as the amendment of Section 9006 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8106)
____________________________
Green credits/tags- These are but two of the units that are traded by wind farmers to organizations that want to reduce their pollution impact or that want to promote wind power development. Related term- green revenues.
Hub height- the height (40 - 320 feet and higher) at which the turbine rotor hub turns in the wind.
Interconnection- an electrical connection between one or more wind turbines and the power utility company's transmission line. If a wind turbine is built before an interconnection has been granted to the turbine operator, interconnection is not guaranteed. This predicament would be a "show stopper."
Each utility has its own requirements for an interconnection to prevent damaging the ability of the overall grid to distribute electricity. (Everything is connected to everything else.)
Large wind turbine- a wind turbine that typically generates 500 kW to 2 MW or more. Newspaper and television reports often focus on these turbines in corporate wind farming, but individual installations are also at school districts, colleges, and communities as well as off-shore. Examples are here.
Levelized- the present value of the total cost of building and operating a generating plant over its economic life, converted to equal annual payments. Costs are levelized in real dollars (i.e., adjusted to remove the impact of inflation).
Magnitudes of watt include-
• one watt, the amount of electric current in one ampere acting across a potential difference of one volt. Picture a 4W nightlight- not much ooomph.
• kilowatt (kW), 1,000 watts, the typical unit of measuring electrical power. One kW = 1.34 hp. A South Dakota home may use about 780 kWh per month.
• megawatt (MW), the increasingly common power output of large wind turbines. 1 MW = 1,000 kW = 1,340 hp.
Met tower- A "met tower" is a meteorological tower that collects wind speed and direction data at a number of heights on the tower. These towers are lightweight, guy-wire supported and have simple base plate and anchors for simplified erection. (One type is not guy-wired.) They are temporary structures that do not need a foundation. You may want to conduct a soil analysis to determine the soundness of the area in supporting a met tower and the associated guy wires.
The taller the meteorological tower, the better. Towers may be between 40 and 50 meters (132 and 165 feet) tall. Data is collected for up to 12 months and analyzed to give the site owners
• some sense of where the prevailing winds are
• what the diurnal wind speeds are and
• what the winter, summer and annual speeds are.
Since wind speeds vary from location to location, many lenders and investors tend to be skeptical of the general wind resource maps for site specific data verification. It is important to gather wind data from the location where a wind turbine will be sited.
Micro turbine- a wind turbine that typically generates less than 2 kW. The turbine is considered to be "silent," and can be attached to a home or work building {though this is not usually done}. An example is here.
Mid-size wind turbine- a wind turbine that typically generates from 10 - 500 kW. This power rating is often installed for community and ag operations wind power. An example is here.
____________________________
A handful of South Dakota wind (though not much yield)-
• 7 PM Jun 13, SSE at 10 mph light rain
• 4 PM Jun 13, S at 12 mph light rain
• 11 AM Jun 13, SSE at 10 mph light rain; mist
• 3 AM Jun 13, Calm
• 8 PM Jun 12, S at 18 mph.
Do contact me if you want to buy any of this blog's content or would like to have other specific wind power-related content uncovered.
'Til next time. Best Wind.
In late May, the former Senators Bob Dole (R-KS) and Tom Daschle (D-SD) released "New Markets for American Agriculture", a report by the 21st Century Agriculture Project, sponsored by the Bipartisan Policy Center. The report highlights investing in biofuels and wind farms to provide farmers and ranchers with new and diversified sources of income. One mentioned changein farm energy projects was "... streamline the application process for smaller, standardized projects by reducing paperwork."
HR 2154 IH is cited as the "Rural Energy for America Act of 2007" as the amendment of Section 9006 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8106)
____________________________
Green credits/tags- These are but two of the units that are traded by wind farmers to organizations that want to reduce their pollution impact or that want to promote wind power development. Related term- green revenues.
Hub height- the height (40 - 320 feet and higher) at which the turbine rotor hub turns in the wind.
Interconnection- an electrical connection between one or more wind turbines and the power utility company's transmission line. If a wind turbine is built before an interconnection has been granted to the turbine operator, interconnection is not guaranteed. This predicament would be a "show stopper."
Each utility has its own requirements for an interconnection to prevent damaging the ability of the overall grid to distribute electricity. (Everything is connected to everything else.)
Large wind turbine- a wind turbine that typically generates 500 kW to 2 MW or more. Newspaper and television reports often focus on these turbines in corporate wind farming, but individual installations are also at school districts, colleges, and communities as well as off-shore. Examples are here.
Levelized- the present value of the total cost of building and operating a generating plant over its economic life, converted to equal annual payments. Costs are levelized in real dollars (i.e., adjusted to remove the impact of inflation).
Magnitudes of watt include-
• one watt, the amount of electric current in one ampere acting across a potential difference of one volt. Picture a 4W nightlight- not much ooomph.
• kilowatt (kW), 1,000 watts, the typical unit of measuring electrical power. One kW = 1.34 hp. A South Dakota home may use about 780 kWh per month.
• megawatt (MW), the increasingly common power output of large wind turbines. 1 MW = 1,000 kW = 1,340 hp.
Met tower- A "met tower" is a meteorological tower that collects wind speed and direction data at a number of heights on the tower. These towers are lightweight, guy-wire supported and have simple base plate and anchors for simplified erection. (One type is not guy-wired.) They are temporary structures that do not need a foundation. You may want to conduct a soil analysis to determine the soundness of the area in supporting a met tower and the associated guy wires.
The taller the meteorological tower, the better. Towers may be between 40 and 50 meters (132 and 165 feet) tall. Data is collected for up to 12 months and analyzed to give the site owners
• some sense of where the prevailing winds are
• what the diurnal wind speeds are and
• what the winter, summer and annual speeds are.
Since wind speeds vary from location to location, many lenders and investors tend to be skeptical of the general wind resource maps for site specific data verification. It is important to gather wind data from the location where a wind turbine will be sited.
Micro turbine- a wind turbine that typically generates less than 2 kW. The turbine is considered to be "silent," and can be attached to a home or work building {though this is not usually done}. An example is here.
Mid-size wind turbine- a wind turbine that typically generates from 10 - 500 kW. This power rating is often installed for community and ag operations wind power. An example is here.
____________________________
A handful of South Dakota wind (though not much yield)-
• 7 PM Jun 13, SSE at 10 mph light rain
• 4 PM Jun 13, S at 12 mph light rain
• 11 AM Jun 13, SSE at 10 mph light rain; mist
• 3 AM Jun 13, Calm
• 8 PM Jun 12, S at 18 mph.
Do contact me if you want to buy any of this blog's content or would like to have other specific wind power-related content uncovered.
'Til next time. Best Wind.
Tuesday, June 12, 2007
One example of a wind energy manual
All of the answers to questions about wind farming and all of the solutions to its problems can be made visible at your local library. Quality answers and solutions demand making time to look at and analyze information; only afterwards can knowledge come to mind.
The Wind Energy Manual was written by the Iowa Energy Center; its Table of Contents is linked to the Manual's 89 pages. This online manual is a publication of the Iowa Energy Center, © 2006.
The Wind Energy Manual was funded and compiled by the Iowa Energy Center. A portion of the contents were prepared by Bruce H. Bailey, AWS Truewind, LLC.
The Table of Contents is linked to various sections, such as
Wind Energy Overview
"Wind energy has become one of today's lower cost renewable energy technologies. Wind turbines are becoming a more common sight in Iowa, with a number of turbines and large wind farms in the northeast part of the state."
History of Wind Energy
"The first true windmill, a machine with vanes attached to an axis to produce circular motion, may have been built as early as 2000 B.C. in ancient Babylon. By the 10th century A.D., windmills with wind-catching surfaces as long as 16 feet and as high as 30 feet were grinding grain in the area now known as eastern Iran and Afghanistan. The western world discovered the windmill much later."
{At one time, wind turbines were "rocket science."}
Technology Overview
"This section defines some of the terms used to describe wind energy systems."
{Another thorough description is Wind Energy Technologies. How wind energy works and what to consider if you want to use wind power at home.}
{A third discussion is Wind Energy for Rural Economic Development, a 32-page presentation by NREL.}
Legal Issues
"Utility Interconnections {vary by state}, Zoning Ordinances, Building Codes and Land Use {vary by county and state}, and Liability and Insurance."
{Another thorough description is The Law of Wind.}
Appendix A has Conversion Tables for working meters per second (mps, m/s) as miles per hour (mph). {M/s is the typical unit used in the wind industry}.
A good online web calculator is the National Oceanic and Atmospheric Administration's Meteorological Calculators {the Feds do these kinds of numbers right}. Scroll down to "Wind Speed Conversion" and put in the value {e.g. 15}, select the units of that value {e.g. m/s}, and click on the "Convert" button. On the right side is mph {33.55} and other units.
___________________________
Similar knowledge can be made visible for all "Ten Steps to Wind Farming," at the top right of this blog. "Food for action," yes?
___________________________
A handful of South Dakota wind-
7 PM Jun 11, S at 23 mph
3 PM Jun 11, S at 22 mph
Noon Jun 11, S 17 mph
5 AM Jun 11, SSE at 15 mph
11 PM Jun 10, ESE at 7 mph.
Do contact me if you want to buy any of this blog's content or would like to have other specific wind power-related content uncovered.
'Til next time. Best Wind.
The Wind Energy Manual was written by the Iowa Energy Center; its Table of Contents is linked to the Manual's 89 pages. This online manual is a publication of the Iowa Energy Center, © 2006.
The Wind Energy Manual was funded and compiled by the Iowa Energy Center. A portion of the contents were prepared by Bruce H. Bailey, AWS Truewind, LLC.
The Table of Contents is linked to various sections, such as
Wind Energy Overview
"Wind energy has become one of today's lower cost renewable energy technologies. Wind turbines are becoming a more common sight in Iowa, with a number of turbines and large wind farms in the northeast part of the state."
History of Wind Energy
"The first true windmill, a machine with vanes attached to an axis to produce circular motion, may have been built as early as 2000 B.C. in ancient Babylon. By the 10th century A.D., windmills with wind-catching surfaces as long as 16 feet and as high as 30 feet were grinding grain in the area now known as eastern Iran and Afghanistan. The western world discovered the windmill much later."
{At one time, wind turbines were "rocket science."}
Technology Overview
"This section defines some of the terms used to describe wind energy systems."
{Another thorough description is Wind Energy Technologies. How wind energy works and what to consider if you want to use wind power at home.}
{A third discussion is Wind Energy for Rural Economic Development, a 32-page presentation by NREL.}
Legal Issues
"Utility Interconnections {vary by state}, Zoning Ordinances, Building Codes and Land Use {vary by county and state}, and Liability and Insurance."
{Another thorough description is The Law of Wind.}
Appendix A has Conversion Tables for working meters per second (mps, m/s) as miles per hour (mph). {M/s is the typical unit used in the wind industry}.
A good online web calculator is the National Oceanic and Atmospheric Administration's Meteorological Calculators {the Feds do these kinds of numbers right}. Scroll down to "Wind Speed Conversion" and put in the value {e.g. 15}, select the units of that value {e.g. m/s}, and click on the "Convert" button. On the right side is mph {33.55} and other units.
___________________________
Similar knowledge can be made visible for all "Ten Steps to Wind Farming," at the top right of this blog. "Food for action," yes?
___________________________
A handful of South Dakota wind-
7 PM Jun 11, S at 23 mph
3 PM Jun 11, S at 22 mph
Noon Jun 11, S 17 mph
5 AM Jun 11, SSE at 15 mph
11 PM Jun 10, ESE at 7 mph.
Do contact me if you want to buy any of this blog's content or would like to have other specific wind power-related content uncovered.
'Til next time. Best Wind.
Monday, June 11, 2007
Installing a wind turbine
All of these sites have photos and text that show and describe aspects of installing a wind turbine.
Seven photos about erecting a large wind turbine from the Danes' wind power site for kids.
___________________________
A wind turbine powers the Univeristy of Minnesota/Morris campus; the project is a key component of the campus' renewable-energy initiative. The 367-foot turbine towers above the plain at the Renewable Energy Research and Demonstration Center, part of the University's West Central Research and Outreach Center (WCROC) in Morris, Minnesota. The turbine, a Vestas 1.65 MW machine, supplies half the electricity for the campus and its 2,000 students.
___________________________
Home/office renewable energy, A case study- Small Wind turbine installation.
We live in Eastern Ontario, which doesn't have a great wind resource. After looking a long time for a suitable unit we bought an African Wind Power 3.6, so called because its blade span is 3.6 metres, or just under twelve feet.
September 2004
Pouring concrete for the footings. This is the central tower footing. Eight yards of concrete went into the five holes.
Late October
At right is the tower all rigged and ready to raise. No one involved had any real experience with serious towers like this, so it was a major learning process for everyone.
____________________________
Installing a Scirocco at the Woodstock Farm Show
Solacity was invited by Green Breeze Inc. to share their stand at the 2006 Woodstock Farm Show. Farmers in Ontario are putting up wind turbines in large numbers these days. Photos on this page show details of the turbine. A comparison matrix can be read at this link.
____________________________
"5 Things To Keep In Mind When Installing A Wind Turbine" uses as its point of reference the 143-turbine Melancthon Wind Project from Canadian Hydro Developers Inc.
____________________________
Wind turbines can be installed in a variety of ways and at a variety of scales. A single turbine is relatively straightforward to install on a site, requiring basic mounting structures to support it. The requirements for selecting an appropriate site and determining how much electricity a turbine can generate can be more complex.
Because the wind does not blow constantly, the actual power output of a turbine is generally much lower (generally 25 to 40%) of its rated capacity. A 1 MW turbine with a 30% capacity factor would have an average output of 0.3 MW.
____________________________
Frequently Asked Questions Associated with Interconnecting Distributed Generation, Specifically Wind Energy; Four-page PDF; March 2007; Sioux Valley Energy (A Touch Stone Energy Cooperative).
____________________________
For something completely different and to determine how many wind turbines you need, first calculate....
____________________________
A handful of South Dakota wind-
7 PM Jun 11, S at 23 mph
3 PM Jun 11, S at 22 mph
Noon Jun 11, S 17 mph
5 AM Jun 11, SSE at 15 mph
11 PM Jun 10, ESE at 7 mph
Do contact me if you want to buy any of this blog's content or would like to have other specific wind power-related content uncovered.
'Til next time. Best Wind.
Seven photos about erecting a large wind turbine from the Danes' wind power site for kids.
___________________________
A wind turbine powers the Univeristy of Minnesota/Morris campus; the project is a key component of the campus' renewable-energy initiative. The 367-foot turbine towers above the plain at the Renewable Energy Research and Demonstration Center, part of the University's West Central Research and Outreach Center (WCROC) in Morris, Minnesota. The turbine, a Vestas 1.65 MW machine, supplies half the electricity for the campus and its 2,000 students.
___________________________
Home/office renewable energy, A case study- Small Wind turbine installation.
We live in Eastern Ontario, which doesn't have a great wind resource. After looking a long time for a suitable unit we bought an African Wind Power 3.6, so called because its blade span is 3.6 metres, or just under twelve feet.
September 2004
Pouring concrete for the footings. This is the central tower footing. Eight yards of concrete went into the five holes.
Late October
At right is the tower all rigged and ready to raise. No one involved had any real experience with serious towers like this, so it was a major learning process for everyone.
____________________________
Installing a Scirocco at the Woodstock Farm Show
Solacity was invited by Green Breeze Inc. to share their stand at the 2006 Woodstock Farm Show. Farmers in Ontario are putting up wind turbines in large numbers these days. Photos on this page show details of the turbine. A comparison matrix can be read at this link.
____________________________
"5 Things To Keep In Mind When Installing A Wind Turbine" uses as its point of reference the 143-turbine Melancthon Wind Project from Canadian Hydro Developers Inc.
____________________________
Wind turbines can be installed in a variety of ways and at a variety of scales. A single turbine is relatively straightforward to install on a site, requiring basic mounting structures to support it. The requirements for selecting an appropriate site and determining how much electricity a turbine can generate can be more complex.
Because the wind does not blow constantly, the actual power output of a turbine is generally much lower (generally 25 to 40%) of its rated capacity. A 1 MW turbine with a 30% capacity factor would have an average output of 0.3 MW.
____________________________
Frequently Asked Questions Associated with Interconnecting Distributed Generation, Specifically Wind Energy; Four-page PDF; March 2007; Sioux Valley Energy (A Touch Stone Energy Cooperative).
____________________________
For something completely different and to determine how many wind turbines you need, first calculate....
____________________________
A handful of South Dakota wind-
7 PM Jun 11, S at 23 mph
3 PM Jun 11, S at 22 mph
Noon Jun 11, S 17 mph
5 AM Jun 11, SSE at 15 mph
11 PM Jun 10, ESE at 7 mph
Do contact me if you want to buy any of this blog's content or would like to have other specific wind power-related content uncovered.
'Til next time. Best Wind.
Friday, June 8, 2007
South Dakota Wind Power and Electricity Prices- Part 2
Continuing with Net Metering in Why Are Electricity Prices Increasing? An Industry-Wide Perspective, which was mentioned at the end of the 8 June, Thursday post:
Net metering is a policy that many states already have implemented to encourage the use of small renewable energy systems. Approximately 40 states have adopted some form of net metering law for small wind and/or photovoltaic technologies; the customer receives a credit for excess power sold to the utility.
Under most state rules, all retail customers are eligible for net metering; however, some states restrict eligibility to particular customer classes {such as farm subsidies}. Customer participation in net metering programs has grown significantly.
In 2004, a total of 15,286 customers were in net metering programs—a 132-percent increase from 2003. Residential customers accounted for 89 percent of all customers participating in such programs.
{With the fourth-best wind power in the nation at 1,030 kWh per year, nearly every South Dakotan who installs a small or community wind turbine would be eligible for net metering. Diversifying income in this manner occurs any time the wind is blowing faster than 14 mph (probably five days out of seven in SD, yes?)}
The use of net metering with current metering technology is problematic, however, because standard meters cannot account for the difference
• between high-cost peak and low-cost off-peak electricity or
• in wholesale and retail electricity costs.
For example, a conventional meter only can record that over a given month an onsite generator sold a net of 100 kWh to the local utility, but will have no record of when the 100 kWh was sold. Sales at 4 p.m. on a hot summer weekday will have a much higher value than sales at 3 a.m. on a Saturday morning.
In order for electric utilities to remain financially viable in the current era of increased operating costs and continued need to invest in infrastructure development and expansion, rates must increase.
Indeed,electricity prices in many regions already have increased and further increases will be necessary in many cases. For example, between January 2005 and January 2006, U.S. electricity prices increased by an average of 11.6 percent, which predominantly reflected increased fuel and purchased power expenses.
These increases affected all customer classes
• residential prices rose by 12.5 percent
• commercial prices rose by 10.5 percent and
• industrial prices rose by 12.6 percent.
Table 9-1 provides a comparison of retail electricity prices over time, as well as similar measures for other key consumer price indices. The 2000 to 2005 picture, however, shows electricity prices growing at a slightly greater rate than that of all items in the CPI. However, even in this period, other energy prices are growing much more rapidly than electricity prices.
Retail prices have become more complex and varied in the past decade. This is a result of
• regional and state differences in rate regulation
• wholesale market organization
• generation mix and
• the individual characteristics of utilities themselves, such as their reliance on owned generation or purchased power to serve load.
It is clear that the fundamental cost driver of increased fuel prices ultimately will increase electricity prices across the country andcharacter of the price increases will have a substantial impact on the ability of utilities to pursue needed investment priorities.
By 2003, average household electricity consumption increased 21 percent, from 1.07 kilowatt (kW) per hour to 1.30 kW per hour. In 2030, average household consumption is expected to increase by more than 11 percent, to 1.45 kW per hour. Greater demand for electric power, however, does not translate directly into higher household expenditures.
Pie charts on p101 - 102, show inter-relationships of these figures.
"Impacts of Price Increases on Electricity Demand Growth Forecasts," is Appendix B.
Figure B-1 shows key inputs and outputs for Energy Information Administration's (EIA) most recent long-term forecast. EIA projects significant declines in the real price of electricity, with a
flattening in later years. This steady-to-declining trend in real electricity prices in 2006 and beyond closely tracks historical trends, and accordingly, demand follows a steady upward trajectory.
In the context of EIA’s modeling framework, the fall in prices is likely due to several factors.
• first and most important, both the rise and fall in electricity prices correspond closely with projected fuel costs.
• second, generating capacity additions underlying EIA's forecast are not dramatic in the near term, as EIA projects about 50 GW of additions over the period through 2014, well below NERC’s forecast of 86 GW.
Thus, the rate base for generation is not growing at a significant pace in the near term under EIA's projections.
While {the authors} have no reason to doubt the internal consistency {even with the contradicting comment a few paragraphs previous to this one?} of EIA's projections and the underlying data, this will impact the projection of demand growth. In EIA's projection assumptions fuel prices (notably natural gas) drop rapidly in price from a 2005 high, bringing
electricity prices down with them.
{What justification does EIA have for expecting fuel prices to decrease?! Peace in the Middle East? "Big Oil" rebates because of its massive profitability? Ease of developing Russian oil fields? What?}
In particular, real prices are assumed to increase 10 percent between 2005 and 2006, and then no change in real price is forecasted through 2014.
____________________________
A handful of South Dakota wind-
• 6 PM Jun 08, WSW at 21 mph
Net metering is a policy that many states already have implemented to encourage the use of small renewable energy systems. Approximately 40 states have adopted some form of net metering law for small wind and/or photovoltaic technologies; the customer receives a credit for excess power sold to the utility.
Under most state rules, all retail customers are eligible for net metering; however, some states restrict eligibility to particular customer classes {such as farm subsidies}. Customer participation in net metering programs has grown significantly.
In 2004, a total of 15,286 customers were in net metering programs—a 132-percent increase from 2003. Residential customers accounted for 89 percent of all customers participating in such programs.
{With the fourth-best wind power in the nation at 1,030 kWh per year, nearly every South Dakotan who installs a small or community wind turbine would be eligible for net metering. Diversifying income in this manner occurs any time the wind is blowing faster than 14 mph (probably five days out of seven in SD, yes?)}
The use of net metering with current metering technology is problematic, however, because standard meters cannot account for the difference
• between high-cost peak and low-cost off-peak electricity or
• in wholesale and retail electricity costs.
For example, a conventional meter only can record that over a given month an onsite generator sold a net of 100 kWh to the local utility, but will have no record of when the 100 kWh was sold. Sales at 4 p.m. on a hot summer weekday will have a much higher value than sales at 3 a.m. on a Saturday morning.
In order for electric utilities to remain financially viable in the current era of increased operating costs and continued need to invest in infrastructure development and expansion, rates must increase.
Indeed,electricity prices in many regions already have increased and further increases will be necessary in many cases. For example, between January 2005 and January 2006, U.S. electricity prices increased by an average of 11.6 percent, which predominantly reflected increased fuel and purchased power expenses.
These increases affected all customer classes
• residential prices rose by 12.5 percent
• commercial prices rose by 10.5 percent and
• industrial prices rose by 12.6 percent.
Table 9-1 provides a comparison of retail electricity prices over time, as well as similar measures for other key consumer price indices. The 2000 to 2005 picture, however, shows electricity prices growing at a slightly greater rate than that of all items in the CPI. However, even in this period, other energy prices are growing much more rapidly than electricity prices.
Retail prices have become more complex and varied in the past decade. This is a result of
• regional and state differences in rate regulation
• wholesale market organization
• generation mix and
• the individual characteristics of utilities themselves, such as their reliance on owned generation or purchased power to serve load.
It is clear that the fundamental cost driver of increased fuel prices ultimately will increase electricity prices across the country andcharacter of the price increases will have a substantial impact on the ability of utilities to pursue needed investment priorities.
By 2003, average household electricity consumption increased 21 percent, from 1.07 kilowatt (kW) per hour to 1.30 kW per hour. In 2030, average household consumption is expected to increase by more than 11 percent, to 1.45 kW per hour. Greater demand for electric power, however, does not translate directly into higher household expenditures.
Pie charts on p101 - 102, show inter-relationships of these figures.
"Impacts of Price Increases on Electricity Demand Growth Forecasts," is Appendix B.
Figure B-1 shows key inputs and outputs for Energy Information Administration's (EIA) most recent long-term forecast. EIA projects significant declines in the real price of electricity, with a
flattening in later years. This steady-to-declining trend in real electricity prices in 2006 and beyond closely tracks historical trends, and accordingly, demand follows a steady upward trajectory.
In the context of EIA’s modeling framework, the fall in prices is likely due to several factors.
• first and most important, both the rise and fall in electricity prices correspond closely with projected fuel costs.
• second, generating capacity additions underlying EIA's forecast are not dramatic in the near term, as EIA projects about 50 GW of additions over the period through 2014, well below NERC’s forecast of 86 GW.
Thus, the rate base for generation is not growing at a significant pace in the near term under EIA's projections.
While {the authors} have no reason to doubt the internal consistency {even with the contradicting comment a few paragraphs previous to this one?} of EIA's projections and the underlying data, this will impact the projection of demand growth. In EIA's projection assumptions fuel prices (notably natural gas) drop rapidly in price from a 2005 high, bringing
electricity prices down with them.
{What justification does EIA have for expecting fuel prices to decrease?! Peace in the Middle East? "Big Oil" rebates because of its massive profitability? Ease of developing Russian oil fields? What?}
In particular, real prices are assumed to increase 10 percent between 2005 and 2006, and then no change in real price is forecasted through 2014.
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A handful of South Dakota wind-
• 6 PM Jun 08, WSW at 21 mph
• 3 PM Jun 08, W at 16 mph
• 9 AM Jun 08, W at 7 mph
• 4 AM Jun 08, WNW at 15 mph
• 9 PM Jun 07, NNW at 25 mph.
Do contact me if you want to buy any of this blog's content or would like to have other specific wind power-related content uncovered.
'Til next time. Best Wind.
Thursday, June 7, 2007
South Dakota Wind Power and Electricity Prices- Part 1
Why Are Electricity Prices Increasing? An Industry-Wide Perspective. JUNE 2006; a report from the Edison Electric Institute (EEI) and the "numbers crunching" by the Department of Energy Energy Information Agency (EIA) are the foundation for exporting South Dakota's wind power.
When South Dakotans harvest the nation's fourth-best wind power (1,030 billion kWh each year) using small, community, and large wind turbines, we can increase generating capacity additions. This satisfies, in the context of EIA’s modeling framework, one aspect of changes in electricity prices we can influence. EIA identified a fall in prices likely due to
First and most important, both the rise and fall in electricity prices correspond closely with projected fuel costs.
Second, generating capacity additions underlying EIA's forecast are not dramatic in the near term, as EIA projects about 50 GW of additions over the period through 2014, well below NERC’s forecast of 86 GW. Thus, therate base for generation is not growing at a significant pace in the near term under EIA's projections.
Price volatility is expected in commodity markets and electricity markets are particularly volatile because, unlike most other commodities, electricitycannot be stored and its short-run demand is highly price inelastic.
This makes electricity prices particularly sensitive to sudden changes in market conditions, such as the loss of a large generating plant or largetransmission line, or large shocks in input costs.
The primary advantages of renewables are low, stable operating costs and the environmental benefits of little or no air and water emissions. However, renewable technologies generally are more costly to build (on an installed $/kW basis), although construction times for wind and solar are typically shorter than for fossil-based generation capacity.
While some biomass and geothermal operate as baseload capacity {constant minimum available power}, wind and solar have lower capacity factors {rated power output} and their power output is intermittent because they are based on variable resources. Renewable resources also vary quite substantially in their geographic distribution.
Wind capacity has been growing at about 20 percent per year recently, which has largely been a result of renewable requirements established at the state level and the periodic renewal of the production tax credit allowed for renewables, there also has been increased demand from customers of “green” electricity at a premium rate offered by utilities.
The need for additional utility generation and transmission will be mitigated to some extent by increased development of small, onsite customer generation. Such generation is typically known as distributed generation (DG). Examples of DG include microturbines, biomass-based generators, small wind turbines, solar thermal electric devices, and backup generators at office buildings, industries, and hospitals.
In contrast to large, central-station power plants, distributed power systems typically range from less than a kilowatt to tens of megawatts in size. Energy Information Administration (EIA) projects that 5.5 GW of DG, or slightly less than two percent of all new generating capacity, will be installed over the next 25 years. {On-site small, community, and large wind turbines}
In addition to reducing the need for generation investment, optimally sited DG can reduce the need for transmission and distribution investment while resolving some system constraints and reducing line losses.
Section 1251 of EPAct 2005 encourages the development of small, onsite generation by requiring states to consider if utilities should make net metering services available upon request to any customer.
When South Dakotans harvest the nation's fourth-best wind power (1,030 billion kWh each year) using small, community, and large wind turbines, we can increase generating capacity additions. This satisfies, in the context of EIA’s modeling framework, one aspect of changes in electricity prices we can influence. EIA identified a fall in prices likely due to
First and most important, both the rise and fall in electricity prices correspond closely with projected fuel costs.
Second, generating capacity additions underlying EIA's forecast are not dramatic in the near term, as EIA projects about 50 GW of additions over the period through 2014, well below NERC’s forecast of 86 GW. Thus, therate base for generation is not growing at a significant pace in the near term under EIA's projections.
Price volatility is expected in commodity markets and electricity markets are particularly volatile because, unlike most other commodities, electricitycannot be stored and its short-run demand is highly price inelastic.
This makes electricity prices particularly sensitive to sudden changes in market conditions, such as the loss of a large generating plant or largetransmission line, or large shocks in input costs.
The primary advantages of renewables are low, stable operating costs and the environmental benefits of little or no air and water emissions. However, renewable technologies generally are more costly to build (on an installed $/kW basis), although construction times for wind and solar are typically shorter than for fossil-based generation capacity.
While some biomass and geothermal operate as baseload capacity {constant minimum available power}, wind and solar have lower capacity factors {rated power output} and their power output is intermittent because they are based on variable resources. Renewable resources also vary quite substantially in their geographic distribution.
Wind capacity has been growing at about 20 percent per year recently, which has largely been a result of renewable requirements established at the state level and the periodic renewal of the production tax credit allowed for renewables, there also has been increased demand from customers of “green” electricity at a premium rate offered by utilities.
The need for additional utility generation and transmission will be mitigated to some extent by increased development of small, onsite customer generation. Such generation is typically known as distributed generation (DG). Examples of DG include microturbines, biomass-based generators, small wind turbines, solar thermal electric devices, and backup generators at office buildings, industries, and hospitals.
In contrast to large, central-station power plants, distributed power systems typically range from less than a kilowatt to tens of megawatts in size. Energy Information Administration (EIA) projects that 5.5 GW of DG, or slightly less than two percent of all new generating capacity, will be installed over the next 25 years. {On-site small, community, and large wind turbines}
In addition to reducing the need for generation investment, optimally sited DG can reduce the need for transmission and distribution investment while resolving some system constraints and reducing line losses.
Section 1251 of EPAct 2005 encourages the development of small, onsite generation by requiring states to consider if utilities should make net metering services available upon request to any customer.
EPAct 2005 Amends the Public Utility Regulatory Policies Act of 1978 (PURPA) to require each electric utility to make available upon request net metering and time-based (smart) metering service, including credits for consumers with large loads who enter into pre-established peak load reduction agreements that reduce a utility's planned capacity obligations.
(Sec. 1253) Declares that no electric utility shall be required to enter into a new contract or obligation to purchase electric energy from a qualifying cogeneration facility or a qualifying small power production facility (qualifying facility) if FERC finds that the qualifying facility has nondiscriminatory access to certain specified relationships.
(Sec. 1254) Requires each electric utility to make available, upon customer request, interconnection service to any electric consumer it serves (under which an onsite generating facility on the consumer's premises is connected to local distribution facilities).
Concludes with Part 2 on Friday.
____________________________
A handful of South Dakota wind-
7 PM Jun 07, NNW at 28 mph, light rain
2 PM Jun 07, SW at 28 mph, thunder in the vicinity
9 AM Jun 07, WSW at 9 mph
3 AM Jun 07, SW at 30 mph
8 PM Jun 06, S at 25 mph.
Do contact me if you want to buy any of this blog's content or would like to have other specific wind power-related content uncovered.
'Til next time. Best Wind.
Wednesday, June 6, 2007
Seeing Wind Power
At the Texas Tech Book Pages is a book review of Windmill Tales, edited by Coy F. Harris, with photographs by Wyman Meinzer, and an Introduction by Steve Halladay.
"On the prairies of North America, wind and water were pervasive, but whereas wind was tangible, water in quantity was hidden beneath the surface. The vast grasslands fed great herds of animals, which in turn sustained native Americans, but it was not until water could be brought to the surface that the plains could be cultivated and developed into a great agricultural bread-basket for the growing nation. The self-governing windmill forever changed the culture of this vast region."
"The only sound that day was from the windmill, a creaking sound that a windmill makes turning in the summer breeze. It is a memory I deeply cherish and why I love windmills so much."
--A visitor to the American Wind Power Center.
"In Windmill Tales, in ninety-nine beautiful full-color images, photographer Wyman Meinzer shows American windmills as they appear today. Many of them are still working, and others have fallen or are preserved at the American Wind Power Center, but all illustrate the way of life that was made possible by the windmill."
"Brief reminiscences and stories told by visitors to the American Wind Power Center give the reader a sense of the central importance of windmills in the lives of early pioneers in the West. Some of the stories reflect the sense of humor ranch and farm families developed to help them through hard times, whereas others hint at disappointment and tragedy. Together with the photographs they give us a fascinating insight into our history."
"The agricultural development of the plains is the story of the ingenuity, hardship, success, and sometimes failure of settlers as they applied a new technology in an environment with which they were barely familiar. The stories of these settlers and of their children and grandchildren often focus on the windmill, for this source of life-sustaining water often became the center of ranch and farm life.
Using the Beaufort Wind Scale- described later- you can roughly estimate the number of watts your wind turbine could harvest by seeing what effects wind has on trees, flags, and "trash-moving."
"The Beaufort scale is an empirical measure for describing wind intensity based mainly on observed sea conditions. Its full name is the Beaufort wind force scale. Beaufort origianlly used knots and open seas descriptions; the scale has been adapted for use on land as well."
4 on the scale is 13 - 18 mph. Dust and loose paper raised. Small branches begin to move and wind farming begins to make economic sense. National Renewable Energy Laboratory (NREL) energy density classes 3/4/5 are in this Beaufort number.
Wind power density is measured in watts per square meter. It indicates how much energy is available at the site for conversion by a wind turbine. A not-too-technical description of energy density classes is here.
6 on the scale is 25 - 31 mph. Large branches in motion. Whistling heard in overhead wires. Umbrella use becomes difficult. NREL energy density classes 6/7.
7 on the scale is 32 - 38 mph. Whole trees in motion. Effort needed to walk against the wind. Exceeds NREL energy density class maximum 7.
8 on the scale is 39 - 46 mph. Twigs broken from trees. Cars veer on road. Exceeds NREL energy density class maximum 7.
9 on the scale is 47 - 54 mph. Light structure damage. "Shingle-stripping" wind. Exceeds NREL energy density class maximum 7.
10 on the scale is 55 - 63 mph. Trees uprooted. Considerable structural damage. Most turbines "cut-out at these speeds to prevent damaging the generator and geartrain. Exceeds NREL energy density class maximum 7.
_________________________________
A handful of South Dakota wind-
7 PM Jun 06, S at 24 mph
11 AM Jun 06, SSE at 29 mph
6 AM Jun 06, S at 21 mph light rain
5 AM Jun 06, SSE at 12 mph
8 PM Jun 05, S at 5 mph.
Do contact me if you want to buy any of this blog's content or would like to have other specific wind power-related content uncovered.
'Til next time. Best Wind.
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