Article

Distance, politics and 'the grid' block new turbines

ST. FRANCIS - The irony hits Ken Haukaas in the face, straight on in a stiff February breeze.

This spot near the high point on the Rosebud Indian Reservation is one of the windiest places in one of the windiest states. Yet that abundant energy resource is largely passing him by, along with the rest of South Dakota.

The Owl Feather War Bonnet Wind Farm was supposed to be built by now. But despite intense efforts by the tribe, all that stands here are a few utility poles and a man with a vision.

"To me, it's almost a sense of religious happening here, that we're going to be using renewable resources for our needs," says Haukaas, a tribal resource planner leading the effort to build 15 giant turbines.

But the state so far has missed its opportunity to fulfill that vision, and to add jobs and millions of dollars to its economy. And because of that, the country has lost out on a chance to reduce electric bills, feed its growing appetite for power, cut fossil fuel dependency and even stave off global climate change.

The reasons range from the obvious to the obscure, but if there is a single explanation, it is this: The nation's intricate electric power system is tilted against wind energy, especially in the state with arguably the best wind potential in the nation -... more [truncated due to possible copyright]  

This spot near the high point on the Rosebud Indian Reservation is one of the windiest places in one of the windiest states. Yet that abundant energy resource is largely passing him by, along with the rest of South Dakota.
 
The Owl Feather War Bonnet Wind Farm was supposed to be built by now. But despite intense efforts by the tribe, all that stands here are a few utility poles and a man with a vision.
 
"To me, it's almost a sense of religious happening here, that we're going to be using renewable resources for our needs," says Haukaas, a tribal resource planner leading the effort to build 15 giant turbines.
 
But the state so far has missed its opportunity to fulfill that vision, and to add jobs and millions of dollars to its economy. And because of that, the country has lost out on a chance to reduce electric bills, feed its growing appetite for power, cut fossil fuel dependency and even stave off global climate change.
 
The reasons range from the obvious to the obscure, but if there is a single explanation, it is this: The nation's intricate electric power system is tilted against wind energy, especially in the state with arguably the best wind potential in the nation - South Dakota.
 
"I think the next 10 years are going to be very important. That's the window of opportunity," said Public Utilities Commissioner Dusty Johnson. "In 10 years, if we have not been able to get into that game in a substantial way, that window will largely have closed. That's my fear."
 
The obvious reason that South Dakota was left behind is geography. It is far away from growing urban demand centers, and the transmission lines necessary to supply those areas can cost almost $1 million per mile.
 
But there are deeper reasons:
 
# A system of transmission fees left over from the era of rural electrification makes exporting wind unprofitable in much of South Dakota.
 
# Much of the power industry is hesitant to embrace wind energy because of its inherent limitations. Many feel wind is not ready to compete with traditional sources, but others argue that some utilities are biased against it.
 
# Building new transmission lines is a daunting, drawn-out process that investors fear.
 
# Half-hearted political support for wind energy has left the industry uncertain of its long-term future.
 
Determination at Rosebud
If anyone has the will to overcome those obstacles, it is the Rosebud Sioux Tribe. It already has already built the country's first Native American-owned wind turbine in one of its poorest counties, despite inexperience on the part of tribal and outside officials.
 
It also has the wind. Most of the land here is rated "excellent" or better for wind energy by the National Renewable Energy Laboratory. Here by St. Francis, and on a ridge along the north edge of the reservation, the wind is "outstanding" - a rating that applies to less than 5 percent of the state.
 
The tribe also has Haukaas, a crusader for renewable energy and conservation.
 
In his previous job as a construction superintendent, he persuaded the housing authority to install ground-source heat pumps in a new office building, saving thousands in energy costs, he said. More recently, he coordinated construction of a log-cabin homeless shelter from local timber.
 
"The clothes we wear, the utensils that we use, the whole thing is derived from petroleum," Haukaas said recently, at the wheel of his Nissan pickup. "We're burning it up insanely. It just bothers me how much we're using when we could use other sources."
 
South Dakota has only one major wind farm - 27 turbines near Highmore - but several factors could open the door to a surge of new wind farms during the next five years or so.
 
Costs dropping, obstacles fading
For one thing, many of the barriers to wind power nationally have toppled in recent years. The cost of a kilowatt-hour - which is enough energy to power the average American home for about 50 minutes - has fallen by 90 percent since 1980, and the cost of installation has been cut in half.
 
When tax credits are factored in, wind is cheaper than any other energy source except coal. The cost can be less than 4 cents per kilowatt-hour.
 
In South Dakota, utilities have agreed to buy power from new turbines near Brookings and possibly in the northern outpost of Java. A second power purchase agreement near Brookings also appears to be a possibility.
 
Farmer John Leiferman of White said he signed a lease agreement with PPM Energy of Oregon about four years ago and expects construction to finally begin this summer.
 
"I live right on the border, and they've been building in Minnesota now for 12 years," he said. "For 12 years, I'm up there tagging my calves and looking across the state line and all my neighbors in Minnesota are getting blessed."
 
Now, Leiferman and many of his neighbors will get substantial lease payments, which could prove a crucial second source of income.
 
"I'm real optimistic for my son getting a college education, and if he wants to return to the farm, I'd encourage him now," he said.
 
Success in Brookings County is not only because its relative proximity to big-city markets, but because of a connection with power lines owned by Xcel Energy. That connection makes sales and transmission simpler than it would be on land just a few miles to the west.
 
Complex web of fees
On Rosebud, the process has been more complicated. Haukaas said deals with Xcel, the Nebraska Public Power District and the Fort Mohave Indian Reservation in Arizona all fell through.
 
"I really didn't know that it would be that complex," he said.
 
A major reason was the fees for using different parts of the electric transmission grid. Selling power to Xcel, for example, would involve payments to the Western Area Power Administration and possibly the Nebraska Public Power District, he said.
 
This stacking of fees on top of each other is known as "pancaking," and is arguably the greatest obstacle to exporting power from central South Dakota.
 
And there is no easy way to change that - much of the state depends on power lines controlled by WAPA, a federal power marketer that sets rates that are in the interests of customers, not power generators.
 
Some wind advocates say utilities and their business practices also block wind development.
 
A question of capacity
Some of those practices are necessary to accommodate wind's drawbacks. The most obvious one: The wind does not blow all the time (though South Dakotans might swear otherwise). Even the best wind farms generate only about 40 percent of their maximum capacity.
 
That means utilities cannot simply replace, say, a 500-megawatt coal plant with a 500-megawatt wind farm.
 
"In the electricity business, there are two things that have value - energy and capacity. Wind is good at churning out the energy, but it's not good at always having the capacity when you need it to serve the load," said Rick Gonzalez, a Minneapolis consultant and former engineer for Xcel Energy.
 
"It's an unfortunate comparison when they say, 'Wind costs 3 or 4 cents a kilowatt-hour, so it's competitive with coal.' "
 
Wind cannot provide the most crucial part of a utility's power supply - large, reliable power plants known as "baseload." Coal and nuclear plants are the most common examples, and some say the only plants big enough to justify new transmission lines.
 
Other sources are used to add capacity or help meet peak demand. They do not always serve as baseload, for various reasons: natural gas is expensive; hydroelectric is limited by water availability; and wind is intermittent.
 
But wind developers say many utilities take that approach too far, partly defeating the purpose of clean wind energy by making it a junior partner to dirtier fuels such as coal.
 
"Yes, you can build power lines just for wind," said Ron Lehr, a former Colorado utilities commissioner who now is with the American Wind Energy Association in Denver.
 
"All we wind folks ask is that our technology be judged along with everyone else in the standard way."
 
When that happens, he said, it turns out that wind has many of the same virtues as any other source.
 
For example, it adds capacity to the system, since the wind is always blowing somewhere, Lehr said. And according to Mike Jacobs, deputy policy director for AWEA in West Concord, Mass., wind has important advantages over coal. It lacks certain financial risks, for example.
 
"What gets my goat is the risk being taken for fuel (cost) increases, for pollution control increases. Those risks are shifted to the rate- payers, the customers, and they are not in a good position to take risks," he said.
 
But many in the industry say it's too soon to move full-speed ahead with wind.
 
"I think it's always going to be a partnership of wind and another baseload. I don't think that wind can make a large transmission line make sense economically," said John DiDonato of FPL Energy. FPL is a sister company of Florida Power and Light, and owns the Highmore wind farm.
 
Few new transmission lines
One last obstacle to wind is the uncertainty that keeps investors from building power lines.
 
Gonzalez said there is plenty of opportunity in the energy business.
 
"The transmission line business, though, it's a mess," he said.
 
Investment in the national transmission grid decreased by half from 1975 to 1997. Although it has since rebounded, there still is little excess capacity, industry experts say.
 
One major reason is deregulation, a movement to break up monopolies that owned both the means of electricity production and the means of getting power to customers. The resulting competition was supposed to reduce prices, but many states have seen the opposite.
 
California provides the most spectacular example, exacerbated by Enron and other market manipulators. But Montana also saw electric bills rise after a deregulated utility went bankrupt and was bought by Northwestern Energy, based in Sioux Falls, which also went bankrupt.
 
With no way to predict what happens next, utilities are skittish about pouring money into transmission, which also can take a decade to pay off and is subject to a capricious market and a tortuous permitting process.
 
"The reality of it is this: If you want more transmission facilities built right now, the only way to get it done is to have certain wholesale generators come together to jointly build large baseload resources," said Jeff Peters, director of marketing and development for Missouri River Energy Services. The not-for-profit company generates power for 57 communities, including Brookings and Watertown.
 
Utilities and wind developers say that in the current energy market, that means partnering with coal. With today's technology, wind eventually might reach 20 percent of the mix, they say.
 
"Some of the wind people are very philosophically opposed to coal, but the reality is coal is wind's friend out there," Gonzalez said.
 
'It's self-reliance'
Haukaas, standing by the solitary turbine on Rosebud, does not want to be a friend of coal.
 
"You go through the West and you see the coal trains. Every other train is probably a coal train. We're using it like it's going out of style," he said.
 
"That's causing warming of the Earth, and do we have enough time to change that?"
 
Tribal President Rodney Bordeaux adds another reason to pursue the wind project.
 
"It's self-reliance. We eventually have to get to how our people were way, way back - where we don't have to rely on anybody," he said.
 
The proposed Owl Feather War Bonnet wind farm is a fitting place to start that. Tribal elders say they used to come to this site, in the days when their native language, Lakota, was prohibited in school, Haukaas said.
 
Some of those elders are still around. Now, from the empty land where they went to speak their own tongue, they might soon harvest their own wind energy.
 
Haukaas said it will take $48 million to get the turbines up, and the tribe still needs a buyer who can offer a decent price.
 
On a larger scale, South Dakota also will have to accelerate investment if it is to realize its potential.
 
Demand in other states is raising the price of new turbines, and many manufacturers are sold out through 2007.
 
"We're here with Minnesota and Iowa, and we do have to be concerned about them possibly blocking us out of markets," said Public Utilities Commissioner Bob Sahr.
 
Haukaas, who always seems to be both idealistic and intensely practical, puts the hopes and the obstacles in perspective.
 
"The spirit that brought the buffalo is bringing another source of livelihood to tribes now, I think. That is, wind and all renewable resources that we can use without damaging the Earth," he said while standing by Rosebud's turbine.
 
A little later, he said:
 
"I really wish I had $48 million."


Source: http://www.argusleader.com/...

MAR 26 2006
http://www.windaction.org/posts/1879-distance-politics-and-the-grid-block-new-turbines
back to top