Tuesday, August 25, 2009

Challenges Great in Wind Generation

With Southern Power District's involvement in the Our Energy, Our Future campaign, we have been continuously asked by our customers “Why hasn’t Nebraska put up more wind turbines?”

We do understand why this question is so common, after all wind is free, right? When you take a look around at other states there are certainly a lot more wind turbines popping up on the landscape. Its working there, so why not here? Some people feel that Nebraska has “balked” at the idea of adding wind generation.

The fact is that Nebraska IS taking a hard look at putting into place an extensive wind generation system. During the 2009 Nebraska Legislature Session, Interim Study Resolution LR 83 was introduced, which calls for a study of issues related to expanding the development of wind energy in Nebraska. Of importance within this study is preserving Nebraska’s public power system which serves our consumers with low-cost, reliable electricity—two factors that cannot be ignored.

The study examines the expected outcome for building 7,800 megawatts of wind power for use in Nebraska and for export out of state. To put that into perspective, all of Nebraska’s existing generation sources are nearly equal to this number. The intent is to harness wind resources in Nebraska and transport that generation to parts of the country where wind is not as abundant.

In order to get a project such as this up and running, the size of the investment will, shall we say…knock the wind out of you! The cost to build the wind generation facilities themselves is estimated at $16.38 BILLION. (That's right...billion with a letter "B".) This does not include the expense of a transmission system to transport the wind generated power, which would tack on an additional $3.9 billion. Added together, this gigantic bill would equal over $20 BILLION, or over $11,000 per Nebraskan.

How then, have our neighboring states been able to justify the cost to put up this type of generation? First of all, Nebraska is an all public power system and the tax incentives that were available for our neighboring states are not available here. While public power districts do not exist to make money from electric consumers, the lack of this incentive makes wind projects less feasible when considering affordability for our consumers. Secondly, many of these projects are owned by private investors who are seeking profits. The added cost is likely captured from the end-user in the form of higher rates.

Returning to the idea to develop a large-scale wind generation project in Nebraska, consider a few questions. First of all, who will pay for a $20 billion project? Can you afford $11,000 to get the ball rolling?

Secondly, if private investors come into the picture on a large scale wind project, much of that power will be consumed right here in Nebraska. Who do you feel will see the benefits of a wind generation system funded by private investment? I personally do not feel it will be the end-use electric consumer.

Here is another big problem. This large scale wind generation project would seek to export energy to other states. In May of this year, governors from 10 Northeast and Mid-Atlantic states delivered a letter to US Senate and House Majority and Minority Leaders. In this letter, the governors expressed a strong interest in developing wind generation in their own backyard, rather than paying the added transmission cost that I mentioned previously. How comfortable are you with spending $20 billion to provide a service, for which we may not have a “buyer”?

If you would like to read for yourself the results of this study, I do encourage you to take a look at the white papers outlining the details. The information does outline both the benefits and risks of a large scale wind project, and I think in reading the materials you will see that the challenges are monumental.

LeAnne Doose,
Communications Director, SPD


Andy Pollock said...

Excellent blog. All true. We need to find away to incent wind development in Nebraska without putting the cost on the back of public power ratepayers. It can be done through public-private partnership.

Butch Hughes said...

Thanks for some comvincing information. Wind energy is too expensive for public power. So some people want clean non-fossil fuel, let's build at least 2 more nuclear power plants. The cost/kilowatt is less than coal and produces no 'greenhouse' gases (the stuff Al Gore's cap & trade bill is all about). We can build these nuclear power plants based upon Nebraska common sense versus Washinton D.C. logic. That way the plants would be on line within 5 years and still under our efficient and customer oriented Nebraska Public Power. Note - Nebraska will be voting on 'sovereignty' as a state in 2010. With that 'sovereignty' we will not need permission from the federal government to build nuclear power generation.
Butch Hughes - Hastings, NE