The News About Renewables
Using renewable resources for electricity generation is a cost-effective way of ensuring a reliable energy supply and achieving customer satisfaction.
Sue Kleeman (Apr/May 08)

What a difference a decade makes. Ten years ago bigger was better - whether it was "clean" coal or a natural gas generating plant. But demand for natural gas put pressure on prices and tightened supplies. Clean coal technology was expensive. The economics of big generation changed. While U.S. generating capacity still consists mainly of large plants powered by natural gas, coal, and nuclear fuels, the Department of Energy (DOE) calculates that about 10 percent of our electricity now comes from renewable resources. Most of it is in the form of large hydropower plants, but about 3 percent is coming from wind, biomass, solar, and other renewable technologies. That 3 percent is getting a lot of attention these days because it is growing - fast.

 Improved renewable technologies are part of the reason. There are smaller "low head" hydro plants with fewer environmental impacts. Plants burning biomass and trash, including landfill gas, are used throughout the country. Wind energy is growing the most, with huge turbines lined up in fields generating 5 MW or more. Solar technologies have expanded; some now capture solar heat as well as light, increasing efficiency and enabling solar energy to be stored. Beyond these "conventional" renewable technologies there are the emerging technologies of photovoltaics (solar cells that absorb sunlight to produce electricity), ocean gradient, tidal power, geothermal, and fuel cells.

The demand for renewables is growing despite capital costs that are typically twice the cost of conventional resources: $800-$1,000/kW compared to $400-$500/kW. But with fuel costs rising and improvements in renewable technologies, renewables can compete with conventional resources on a kWh basis. For example, wind generation cost a whopping 40 cents/kWh in 1980; 20 years later, thanks to increased turbine sizes and other advances, it can be purchased for as little as 4 cents/kWh.

Smaller, renewable generation plants have much to recommend them. Many produce no air or water emissions. Utilities also are looking at renewables to help insure adequate electric supply and maintain price stability. There is no fuel price variability or concerns about supply availability. These resources are often quick to build; for example, many wind installations can be up and running in six months. Another benefit of some renewable programs has been economic development; most renewables are home-grown so energy dollars stay at home.

Another reason for the surge in renewable energy supply is consumer demand. Customers and state and local governments are demanding green power for environmental and energy security reasons. This demand had been measured and addressed through the use of green pricing programs. Customers are willing to pay a premium for green power.

According to the National Renewable Energy Laboratory's (NREL) green power network, "Although renewable energy development has traditionally been limited by cost considerations, customer choice allows consumer preferences for cleaner energy sources to be reflected in market transactions. In survey after survey, customers have expressed a preference and willingness to pay more, if necessary, for cleaner energy sources."

These preferences can be expressed three ways, through green pricing, green power marketing, and renewable energy certificates. Green pricing lets utility customers support investment in renewables by paying a premium to cover the extra cost of renewable generation. Currently more than 750 utilities of all types offer a green pricing option. Selling renewable energy into competitive wholesale markets is called green power marketing; this is occurring in about 20 states. Even if customers have no access to green power through their utility or a competitive marketer, they can purchase renewable energy certificates (RECs or green tags), in essence buying the environmental attributes of renewable resources.

Green pricing programs can be instituted either by the state or a utility. For example, the CleanPower Choice Program from the New Jersey Board of Public Utilities' Office of Clean Energy is a statewide program that allows customers to choose renewable energy sources for electric generation - solar, wind, small hydro, and landfill gas. The program is part of a larger initiative, the New Jersey Clean Energy Program. The N.J. Clean Energy Program is administered by the New Jersey Clean Energy Council. The Council has members from government and industry, including utilities operating in the state such as PSE&G, which support the goals of a stronger economy, less pollution, and less dependence on foreign sources of energy. Customers sign up with a CleanPower marketer and pay a little extra per kWh for electricity produced by wind or a wind/other renewable combination.

While there are many renewable technologies, there are also many ways to integrate them into utility energy programs. Renewable energy is being employed by both wholesale and retail companies; by large generating entities operating in multiple states; as well as by small municipal utilities and by power producers in all parts of the country. The following examples are just a sample of the many different ways renewable energy resources are being developed and used.

It's all about wind.
According to DOE, apart from hydropower, wind power is the most frequent source of renewable generation in the United States. About 30 states generate some wind power, and today the total U.S. wind capacity is about 17,000 MW - enough to generate electricity for about five million households.

Wind power is making economic sense for utilities of all sizes. The Nebraska Public Power District (NPPD) is Nebraska's largest electric utility, serving about one million people through its wholesale and retail operations. NPPD became interested in wind power when it evaluated all forms of renewable resources feasible in Nebraska with the intent of producing 5 percent of its energy from renewable resources, if economically viable.

In 2005, 36 wind turbines with 130-foot blades were constructed across the Sandhills, six miles south of Ainsworth, Nebraska. Called the Ainsworth Wind Energy Facility, its capacity is 60 MW. The output is used for NPPD customers, but also sold to utilities as far away as Florida. Last summer, NPPD invited developers of wind projects to submit more proposals. Dave Rich, NPPD's renewable energy manager sees even more wind energy in NPPD's future: "NPPD has longer-term goals of incorporating more wind-powered generation into our portfolio down the road."

XCEL Energy - which operates as an energy company in eight different Midwest and Southwest states including Colorado, Minnesota, Wisconsin, and Texas - is as committed to wind power as NPPD. XCEL has always had hydro plants - currently it operates 28 plants totaling 500 MW - but it became interested in wind in 1980. The American Wind Energy Association claims that XCEL is today the largest single U.S. wind provider with about 1,500 MW of capacity.

XCEL offers a program to its customers in Minnesota, Colorado, and New Mexico called Windsource, ranked by NREL as the second-largest green pricing program in the nation. The program lets customers purchase up to 100 percent of their generation from wind resources, at an incremental cost of about $14 per month. XCEL has committed to buying or building sufficient capacity to generate the wind energy needed to meet program demand.

XCEL is also working with NREL on wind-to-battery projects that take intermittent wind-generated electricity and store it for use when the wind isn't blowing. Efficient storage has been one big stumbling block to expanding wind and other intermittent resource generation.

Solar power is popular where the sun shines.
The array of projects offered by the Arizona Public Service Company (APS) illustrates the diversity of solar power installations. APS now has more than 5 MW of installed solar capacity statewide. APS' Flagstaff solar plant produces 82 kW of solar power using a single-axis tracking technology to maximize the intake of the sun's energy. APS installed high-concentration photovoltaic arrays at the Glendale Municipal Airport that track the sun's movement and concentrate the sun's rays onto each solar cell. A solar-hybrid power system was installed at the remote Gray Wolf Regional Landfill using photovoltaics and battery storage. APS and the City of Scottsdale combined the need for covered parking at a commercial building with clean energy generation, resulting in an 8,500-square-foot parking structure covered with photovoltaic panels that generate 93 kW.

In late February, APS entered into an agreement with Abengoa Solar to build one of the largest solar power plants, 280 MW, at a cost of $1 billion, in Gila Bend, 70 miles southwest of Phoenix. The Solana Generating Station should be producing energy by 2011. APS will pay Abengoa $4 billion over 30 years for the electricity it generates, tripling the amount of renewable electricity APS produces. Unlike most solar collectors, Solana will use the sun's heat instead of its light to produce power as it trains thousands of parabolic mirrors to focus the sun's heat. This heat will be used to heat liquid that can be used to power turbines even when the sun is not shining.

APS President Don Brandt is clearly thinking big when it comes to solar energy: "APS is committed to making Arizona the solar capital of the world and bringing affordable renewable energy to all our customers." It is not just the green benefits that are important. APS estimates that the Solana Generating station will create about 1,500 construction jobs and will employ about 85 highly skilled people. Total economic benefits to the state are estimated at more than $1 billion.

In Florida, FPL Energy, a wholesale generation company and part of the FPL group that includes Florida Power and Light, is a leader in wind energy but also operates the two largest solar fields in the world. FPL also operates 55 wind farms in 16 states, with 5,000 MW capacity. FPL offers the Sunshine Energy program to residential and commercial customers who want to "go green." To ensure sufficient renewable energy to meet program demand, FPL is building solar projects in Florida, including a 230 kW project at Rothenbach Park in Sarasota. A second project is under construction at the Miami Museum of Science & Planetarium.

Smaller utilities also can benefit from solar power. Austin Energy's GreenChoice claims to be the nation's most successful utility-sponsored green pricing program, with over 665 million kWh in subscriptions. Austin has more green-powered businesses than any city in the nation. To meet demand, Austin Energy augments wind power from fields in McCamey and Sweetwater with several solar installations in Austin. Some of the solar installations are on city buildings - the largest are at the Austin-Bergstrom International Airport, a large city parking garage, and atop a hotel.

Utilities that operate in sunny climates do not always go the solar route when investigating renewable resources for their portfolios. Alabama Power, Georgia Power, and Mississippi Power, all part of Southern Company, offer their customers energy powered by biomass - sawdust, switchgrass, and landfill gas. However, Gulf Power, another part of Southern Company, offers its customers energy generated from photovoltaics.

Renewables are being integrated into energy conservation plans.
Because of energy shortages and higher prices, the utilities on the West Coast have been using renewables as part of a plan to reduce dependence on fossil fuel generation for many years. These utilities are bundling their green power options with other programs and services for businesses, helping them to get maximum benefit from every energy dollar they spend.

A top green program belongs to Oregon's Portland General Electric Company (PGE), which offers two renewable energy programs for businesses. For small and mid-scale business, PGE's Green Source option matches 100 percent of energy usage with several types of renewable power. Large businesses can purchase a separate Clean Wind product, where small units of renewable energy are purchased for a set fee. PGE offers added inducements including free publicity and advertising, depending on level of participation. Supporters are included in advertisements that appear in local newspapers and periodicals and in PGE's renewables newsletter. PGE provides a range of marketing tools including window decals and Web graphics to help businesses demonstrate their concern for the environment to their customers.

The Sacramento Municipal Utility District (SMUD) in California is a municipal utility dedicated to green power - its power mix emphasizes hydropower and other renewables and is one of the cleanest in the country. SMUD has a goal to meet 23 percent of its retail electricity sales with renewable power by 2011. To help achieve this goal, SMUD has integrated "go green" programs for both residential and commercial customers with new wind field construction and renewable power purchases. In addition to buying green power, SMUD has programs to encourage businesses to generate their own solar power, offers advice and assistance to help business evaluate new energy-saving technologies, and provides information on rebates and tax incentives and energy audits.

Whether it is by implementing new renewable technologies, expanding existing facilities, offering incentives to "go green," or bundling green power with other products and services for residential and commercial customers, U.S. utilities have embraced renewable resources. With their predictable costs, security of supply, local economic benefits, and clean power, renewable energy is a good choice to meet future electricity needs.

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