Sunday, February 19, 2006

Wind developers tout front range potential

Wind developers tout front range potential

By Acantha staff
The Rocky Mountain Front - home to spectacular wildlife habitat and rugged ranchland - may also be the perfect setting for wind farms of the future, a panel of speakers told the Golden Triangle Pachyderm Club in Choteau recently.

The U.S. Department of Energy's National Renewable Energy Laboratory ranks Montana as fifth in the nation in wind power potential. The Laboratory's wind power resources map for the state shows a bright band of blue, red, purple and pink along the east slope of the Rockies from the Canadian border south.

The DOE classifies wind power potential for the front range anywhere from "fair to outstanding" with most of the front range in the "good to excellent" range. The eastern two-thirds of Teton County is rated as "good" with the western third as "excellent and outstanding," particularly in the north-western corner of the county.

With this economic development potential in mind, the Pachyderm Club invited as guest speakers David L. Dumon, managing partner of Great Plains Wind & Energy Inc. of Somers; Bob Williams, vice president for regulatory with Montana Alberta Tie Ltd., of Calgary; Edward A. Sundberg, managing partner, GPS Group, L.L.C., of Roswell, Ga.; Mark D. Jacobson, senior development manager for Invenergy, L.L.C., of Pewaukee, Wisc.; and Harold Koegler, managing director for Hyperion Energy L.L.C. of Ponte Vedra Beach, Fla.

According to the DOE, wind energy is the fastest-growing energy generation technology in the nation, expanding by 30 percent to 40 percent annually. The cost of producing electricity from wind power has dropped from 80 cents per kilowatt-hour in 1980 (in current dollars) to 4 to 6 cents now.

The DOE says that wind energy systems are now installed in 27 states. In Montana, as of 2005, there were three wind farms on-line on the Blackfeet Reservation in Glacier County, on the Martinsdale Hutterite Colony and, most recently, at the Invenergy Wind Farm at Judith Gap, according to the American Wind Energy Association. The AWEA also says that wind farms are in the planning stages at Poplar and in the Glasgow area.

Introducing the speakers, Pachyderm Club President Llew Jones of Conrad said the program was intended to provide information on electricity transmission line capability and wind energy potential in northcentral Montana.

Sundberg, giving background on wind energy issues, said, "I think it's safe to say that we're facing, nationally and even globally, a perfect storm of a lot of issues."

Sundberg's company provides "global project solutions, management and capital" and has U.S. offices in Atlanta, Boston and New York City and abroad in Geneva, Switzerland.

Sundberg said the Kyoto Treaty protocols are pressuring countries to reduce carbon emissions and to look at cleaner energy sources. Secondly, he said, the United States is trying for security purposes to diversify its energy portfolio and reduce its reliance on foreign oil. Thirdly, the costs of production and acquisition for both crude oil and natural gas have spiked in recent months.

With that backdrop, Sundberg said, a number of large Wall Street firms have seen the potential for wind energy and are purchasing wind energy developments, and many utilities are looking to develop wind energy resources.

The renewed interest in wind energy comes at a time when the technology used to convert wind energy to electricity - wind turbines - has been greatly improved and is much more efficient, resulting in much lower wind energy production costs, Sundberg said.

"Wind is now becoming extremely competitive," he said. "Montana has a tremendous, tremendous amount of wind. And I'm not referring to the Pachyderms in this room."

Sundberg said GPS Group L.L.C. has invested in wind energy on the Blackfeet Reservation and is still working there.

One issue facing Montana, he said, is the lack of a large enough transmission system to get energy produced here into the national grid and available for sale to consumers.

Williams, however, said his entrepreneur-owned company, wants to provide that critical link. Montana Alberta Tie Ltd. is building a 200-mile transmission line from northeast of Lethbridge, Alta., south to Great Falls.

Utility companies have looked at installing such a line in the past, but the economics have not penciled out, Williams said. His merchant-developer owned company, however, believes that investing in a transmission line that can provide services to yet-to-be-built wind farms will be a profitable venture in the future. This transmission line will encourage large-scale wind developments, Williams said.

The Canadian wind energy atlas supports his contention, he said. "The message that this picture conveys is that this land passes through some of the best wind resource in north America," he said.

He said the transmission line is going through the regulatory permitting process now, and his company plans to have it built by the end of the first quarter of 2007.

Koegler, who has been in the wind energy arena since 1984, said, "The wind in Montana is strong and constant and it's cold. All of that means good power."

"Wind energy is now efficient, it's priced properly and its worthy of taking note of," he said. "It's a non-polluting, renewable resource."

Like Williams, Koegler also said that to take advantage of Montana's wind generating potential, the state will have to have a way to transport the electricity to the consumers and companies that need to purchase it. He said he and other wind developers are working with government officials and programs to foster transmission line production.

Local economies can benefit when commercial wind farms are installed through an infusion of wage and materials dollars into the economy and can see ongoing benefits from property taxes and employment, Koegler said. Building a commercial wind farm capable of generating 1,000 megawatts of electricity with about 500 wind turbines would cost about $1.5 billion, he said. Of that, 20 percent would stay in the local economy in labor, materials and services - a whopping $300 million. "As you can see, not only will you be exporting power and the state will be making money from that through their normal revenue procedures, but you'll also be bringing new jobs and new money," he said.

Jacobson's company, Inven-ergy, has invested in Montana's wind energy, building the Invenergy wind farm at Judith Gap. The facility has 90 1.5-megawatt turbines and produces 135 megawatts of power. Each turbine could provide electricity to 300 to 400 homes. The Judith Gap plant was the largest of three wind farms that Invenergy invested in the west last year. The other two were in Colorado and Idaho.

Jacobson said six to 12 full-time operators and maintenance workers are employed at the Judith Gap farm.

"The market is improving," Jacobson said. Utilities want to buy this power because it provides a nice predictable price, a hedge against volatile natural gas prices, Jacobson said, adding that the federal production tax credit is also encouraging investment in wind energy.

Dumon, who hails from the Conrad area, said his experience has come through developing 15 wind farms in Texas. He and his partners formed their new company in January 2005 and are now looking at developing wind farms in the Northwest.

The topography that Great Plains Wind & Energy Inc. is looking for, west of Interstate 15, is the buttes and tabletop mesas of the Front. "These are ideal places to build wind farms," Dumon said.

He said his company is looking at a 5,000-acre to 8,000-acre wind farm on private property in Pondera and Toole counties and has three other projects in Montana on the drawing board.

Dumon's company plans to take out 20-year leases with the landowners with the option to renew the leases every 10 years twice. He said the impact of the project to the local communities and the state will be significant.

The Montana Wind Working Group, made up of industry, consumer and government representatives promoting wind energy development in the state, has developed an informal guide for landowners considering leasing their property wind developers.

The manual says, "If you're interested in offering your property as a site for a wind farm, you need to think about how you'll make money from the project. If you're serious, after reading this [the guide], hire a professional to help you negotiate with wind developers."

The guide is available on the state Web site at: