Wind power gets attention as energy picture changes

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WASHINGTON - Against a background of growing electricity prices and
potential power shortages, a subcommittee in the House of Representatives
heard that the time is right for tribal wind power.

"We are on the verge of witnessing a significant curtailment of our
conventional power generation capabilities," said Patrick Spears, president
of the Intertribal Council on Utility Power in Rosebud, S.D. "This
[sub]committee knows that the costs of energy are rising for a variety of
reasons nationwide, and particularly in the growing West. The challenges
are many, the time is critical, and opportunities are at hand.

"The full Resources Committee has jurisdiction both [over] the several
power marketing administrations and over Indian affairs. The purchase of
tribal wind energy [by the PMAs] will create jobs and revenue to restore
economies on the reservations and provide a new reliable source of energy
at a competitive cost."

Spears asked for congressional assistance in gaining access for tribal wind
power to the Western Area Power Association's hydropower distribution
system.

Thomas Heller, chief executive officer of Missouri River Energy Services,
concurred: "I believe there is an opportunity for a new partnership."

Hydroelectric power, drawn from water reservoirs on dammed rivers, is the
backbone of conventional power generation. Wind power, generated by the
turning of blades resembling propellers on tower-like turbines in windy
terrain, is an environmentally friendly or "clean energy" alternative that
has proved itself on a large scale in Europe - where, however, it is
heavily subsidized.

Wind power has gotten a serious hearing in the United States only in recent
years. The Western Governors Association, for instance, has committed to
including significant wind power in its "clean energy" generation goals,
Spears said.

Spears joined other witnesses Feb. 10 in testifying to numerous factors
that are "putting our current electricity system in serious jeopardy," he
said: "All-time record low water levels behind the dams on the Missouri
River have resulted in diminished hydropower generation, lost revenue from
the lack of surplus power sales, reductions in hydropower allocations to
preference customers, increased costs for both the remaining hydropower and
from WAPA's [Western Area Power Association's] need to acquire additional
purchase power from conventional sources to meet its long-term contracts,
and now the prospect of severe shortages of cooling waters for conventional
power plants both in the upper [Missouri River] basin due to drought and in
the lower basin due to reduced flow through the dams."

In the Colorado River basin, added Leslie James, executive director of the
Colorado River Energy Distributors Association, "We're rapidly approaching
minimum power generation ..."

Other witnesses referenced "historical drought" and the 2000 - 2001
conventional energy market "collapse" in California (triggered in part at
least by a Northwest drought) as warning signs for conventional power.

The nine Intertribal COUP tribes each plan to develop wind energy on a
significant scale, Spears said. Rosebud is home to the nation's only
tribally owned and operated commercial-scale wind power facility, according
to Intertribal COUP. Several wind power development projects are underway
with other tribes, and a wind farm of Kotzebue Electric Association in
Alaska serves many Alaska Natives. The Campo and Ewiiaapaayp tribes in
California have signed contracts with a private sector company to build 38
turbines by 2006 in what would be the nation's largest wind farm located on
tribal lands.

Intertribal COUP and its member tribes advocate for wind power in the
Northern Plains, where the wind energy potential of tribal lands is
enormous.

But wind power comes with a weakness. It is available in quantity only
intermittently as the wind blows. Because electricity cannot be stored in
commercial quantity - supply must instantly match demand for the lights to
go on at the flip of switches throughout a service area - intermittency is
a problem.

But it can be overcome, said Heller. Significantly, he testified that wind
power can be integrated with hydropower to overcome intermittency:
"Hydropower is well suited to integration with other resources: it can
serve as a baseload resource that is supplemented with other supplies in
order to meet peak demand; it can easily vary output in order to match
fluctuating loads; and, it can provide regulation service to adjust for the
variances in production from intermittent wind resources.

"The [upper Missouri River basin/Northern Plains] region contains some of
the best, untapped wind generation opportunities in the country. MRES and
its members would like to utilize this renewable generation to meet our
customers' ongoing energy needs. One of the main challenges in using wind
generation is overcoming the variability of wind. Hydro has great potential
to cost effectively provide the regulating resources for wind and
dramatically improve the economics of that resource."

If the past is any guide, this could be a significant admission. Wind power
advocates believe it is economically competitive even without the new
regulations needed to integrate it with WAPA hydropower.

But practically speaking, alternative power sources on the whole took a hit
to their reputation from California's abovementioned electricity crisis.
Despite subsidies of $25 billion during the previous 25 years, they never
made up more than 12 percent of the state's energy supply by the most
generous estimate (and much less by other estimates) - nowhere near enough
to fill the gap when the so-called imbalance of supply and demand
eventually caught up with the state. Court proceedings have since proven
that some of the resulting incalculable losses to the state economy came
from manipulative power marketers such as Enron.

Politicians may prove leery of the opportunity cost represented by wind
power investments with the California example in recent memory.
(Opportunity cost is an economic term indicating the prospective profit of
a lost opportunity, in this case increases in conventional power, that
might be pursued if a different use, such as increases in alternative
energy, is made of available monies.)

They are bound to be even more leery of subsidies, such as those on which
the European wind power industry relies. A proposal in President George W.
Bush's federal budget request to increase the cost of electricity sales to
utilities by up to 20 percent justified itself as a redress of previous
subsidies for power producers - a notion disputed by the producers and
their advocates. Still, substantial new subsidies for wind power in this
political climate is probably a non-starter.

Then again, they may not be necessary. With the nation as a whole facing
shortages in conventional energy supplies and all their associated higher
costs, the tables are turned. If, in this new context, integration with
hydropower can cost-effectively regulate the intermittency of wind
generation "and dramatically improve the economics of that resource," as
Heller maintained in his testimony, then any failure to invest reasonably
in bringing wind power to market becomes an opportunity cost. Likewise, if
Heller is correct, the alternative power subsidies of the past become an
investment in the future.