August 25, 2008

For a profitable crop, try harvesting the wind

Construction Corner

Korky Koroluk

With energy prices soaring and environmental concerns mounting, people everywhere are looking for alternatives to fossil fuels. There have been great strides made in the field of solar energy, but even more progress has been made by “farming the wind.”

Now, two important things have happened.

Texas regulators have approved a $4.93-billion wind-power transmission project to bring clean electricity to places like Dallas, Houston, Austin and San Antonio.

The little town of Rock Port, Missouri, has become the first in the United States (and likely the first in North America) to operate solely on wind power.

These are two projects on vastly different scales, and both are important.

The Texas project will put the United States ahead of Germany for installed wind capacity. The state is already the largest producer of wind power in the U.S., with 5,300 installed megawatts, more than double the installed capacity of California, the next closest state.

Transmission companies will pay the up-front costs of the project. They will collect that money from users of the power they carry, at a rate of about $4 a month for residential customers.

The transmission problem is so acute in Texas that turbines are sometimes turned off, even when the wind is blowing.

But, there is more generation capacity in the works.

T. Boone Pickens, a Texas oilman who has become something of a legend in his own time, plans to build what has been called the world’s largest wind farm in Texas and his spokesman welcomed the announcement about transmission capacity.

But because roughly a quarter of the Pickens capacity will come on line by 2011, two years before the Texas lines are ready, Pickens will move forward with plans to build his own transmission.

These projects demonstrate the increasing faith reputable investors have in alternative energy. They are of such a size that they also demonstrate the tremendous amount of work that will become available to the construction sector as the alternative energy industry ramps up.

In Missouri, people in the northwestern part of the state are looking forward to saving money on their utility bill and county government expects to reap a lot of extra tax revenue. The development company, Wind Capital Group, of St. Louis, will pay the county more than $1.1 million a year in real estate taxes.

Jerry Baker, a community development specialist, said the situation is unique, because in rural areas it is quite uncommon to have this increase in taxation revenues.”

Impressive though the projects in Texas and Missouri might be, there is still a long way to go before wind power makes a significant dent in the U.S. energy market.

The U.S. department of energy said that wind has the capability to provide 20 per cent of the nation’s energy needs by 2030.

Randall Swisher, the executive director of the American Wind Energy Association, said that the U.S. needs to back away from fossil fuel and embrace renewable energy.

“The survival of the world depends on it,” he said.

But, there are immediate advantages to depending on wind when possible. The turbines installed to power Rock Port have a design life of about 20 years.

During that time, they will provide savings to the rural electric companies that are tapped into the system.

For the residents of Rock Port, it will mean no increase in rates for the next 15 to 20 years, said Jim Crawford, an engineer from the University of Missouri, who has worked with the town from the outset.

“We’re farming the wind,” Crawford said.

“The payback on a per-acre basis is generally quite good when compared to a lot of other crops, and it’s as simple as getting a cup of coffee and watching the blades spin.”

Korky Koroluk is an Ottawa-based freelance writer. Send comments to editor@journalofcommerce.com

Print | Email | Comment