A year ago, few believed Indiana had enough wind to generate electricity.

Today, at least five developers are planning or prospecting for wind farms in Indiana, saying the potential exists to produce hundreds and maybe thousands of megawatts of electric power.

Technological developments have made it possible to develop wind farms for only slightly more than traditional energy costs, making utilities more likely to embrace wind.

“Wind is starting to pick up,” said Brandon Seitz, energy division manager in Indiana’s Office of Energy and Defense Development, part of Gov. Mitch Daniels’ administration.

That’s good news for rural areas such as Benton County, which is the state’s best spot for wind resources. About 50 farmers in the county, northwest of Lafayette, will receive a few thousand dollars a year in lease payments from California-based Orion Energy to host 75 wind turbines Orion is planning to erect next year.

It’s good news for companies such as White Construction, a wind farm construction firm based in Clinton that intends to bid on projects that come to Northern Indiana.

And it’s good news for the state. Electricity produced by that wind farm will go all across the state because Orion has secured a contract with Duke Energy Indiana for 100 of the 130 megawatts of capacity it plans to build.

Indiana needs the extra power. Hoosiers’ peak demand for electricity now exceeds peak capacity — and the energy shortage is projected to grow to 3,000 megawatts by 2010, according to a 2005 report by the State Utility Forecasting Group.

But adding power plants isn’t easy for Indiana, which burns coal for 84 percent of its electricity. The federal government is ratcheting up environmental regulations on sulfur and nitrogen emissions — and soon might crack down on carbon emissions, too. Coal-fired plants require expensive scrubbers to reduce significant emissions.

Wind farms, while not capable of the scale and consistency of coal, produce no emissions.
Orion and other developers say Indiana could produce hundreds and even thousands of megawatts in clean wind energy.

“You go where the resource is,” said Wayne Hoffman, Orion’s point man for its Indiana project. Orion was alone when it started measuring wind in Indiana five years ago, but now it has a lot more company. “The competition swooped in in a hurry,” Hoffman said.

California-based enXco is far along with plans for a wind farm. Other companies eyeing Northern Indiana include Horizon Wind Energy of Texas, Clipper Windpower of California and Gamesa of Spain, according to industry and state leaders.

Wind projects picked up momentum after the National Renewable Energy Laboratory in Colorado released results in January from a “tall tower” study that showed much more wind in Indiana than short-tower studies had discovered before. The “tall tower” study showed that, at 80 to 100 meters altitude, as much as 200,000 megawatts of wind energy is waiting in Indiana.

But wind farm developers also started flocking here after some legislators earlier this year proposed a renewable electricity standard. It would require the state’s utilities to generate 10 percent of their power from renewable sources, such as wind, solar, biomass and farm waste.

Indiana’s major electric utilities oppose such a mandate, even though they are working to expand the amount of renewable energy in their power systems.

Northern Indiana Public Service Co. is seeking bids for new power, indicating it wants some of it to come from renewables. Indianapolis-based Indianapolis Power & Light Co. is asking state regulators to OK its plan to build or buy more renewables.

The governor, too, has promoted renewable energy but has withheld his support for a renewables mandate.

“We need to be always careful at moving that type of thing forward because there are concerns: How is it going to affect rates? How is it going to affect the consumer?” said Seitz, one of Daniels’ energy aides. Seitz said the administration favors tax credits and incentives to encourage renewable energy development.

But wind proponents say Indiana won’t sprout enough renewable energy unless it guarantees a market for developers such as Orion and enXco before they put millions of dollars at risk. Only a mandated renewable electricity standard will do that, they say.

“To get to the scale and the potential, you need it,” said Steve Aker, project manager for White Construction.

Right now, 22 states and the District of Columbia have a renewable energy requirement, and 15 others are considering them, according to the Environmental Law and Policy Center in Chicago. Roughly 70 percent of wind turbines in the United States are in those states.

The Indiana Coalition for Renewable Energy and Economic Development unveiled a rate analysis last month that projects a slight increase — 1.14 percent — in rates if Indiana were to phase in a 10 percent renewable requirement by 2017.

The study, written by Peter Boerger of Engineering Economic Associates in Indianapolis, was funded by the Environmental Law and Policy Center, a strong proponent of renewable energy requirements.

But the study’s estimated rate impact seems low to Kay Pashos, president of Duke Energy Indiana in Plainfield. Her staff received a copy of the study last week and intended to talk to Boerger about his conclusions.

“Based on the bids that we’ve seen, our gut instinct tells us it’s higher than that,” said Pashos. Duke received six bids when it sought renewable power generation in 2005; all cost more than traditional power sources. But Orion’s bid was only slightly more costly, Pashos said, so Duke decided to go ahead.

“It’s kind of a hedge against those future (environmental) regulations,” she said. “It’s just another diverse addition to our overall portfolio.”