[Energy] AEP looks for wind from the east
PowerNews - April 11, 2007
[ Are we seeing wars waged over wind generation along the lines of aesthetics vs. environmental polluting? See 3rd paragraph from the bottom in boldface. ]
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American Electric Power is looking for wind power for its eastern utility system, issuing a request for proposals, due April 30, for up to 360 MW. Ultimately, says the utility holding company based in Columbus, Ohio, the company wants 1,000 MW of new wind by 2011 as part of its strategy to address greenhouse gas emissions.
AEP says it is looking for up to 260 MW of wind energy for its Appalachian Power utility and up to 100 MW for Indiana Michigan Power. According to an AEP press release, that amounts to “almost 60% of the currently installed wind generation in the PJM Interconnection,” where AEP’s mid-Atlantic and Midwestern utilities are connected to the regional grid. PJM is a coal-centric region.
AEP says it wants delivery of the wind power to begin at the end of 2008, the current date for expiration of the federal renewable energy production tax credit. Much of the 1,000 MW of wind power AEP hopes to add to its generating mix “is expected to be located in the PJM Interconnection,” the company said. AEP owns two Texas wind farms, with capacity of 310 MW, and has long-term contracts for another 467 MW in third-party-owned wind farms in Oklahoma and Texas.
Michael Morris, AEP CEO, said, “We face the need for additional supplies to meet our customers’ growing demand for electricity. Using wind energy to help satisfy that increased demand aligns with the desire expressed by many governors for alternative energy resources for customers in their states.”
But AEP, and its RFP bidders, may find it more difficult to site wind farms in the Appalachians than in Texas and Oklahoma. A feisty and growing contingent of opponents to wind on the Appalachian ridges, where the wind is most dependable, are raising challenges to utility wind projects. Many of the wind opponents are veterans of environmental campaigns that have slowed or derailed nuclear and coal-fired projects.
A key element in the future of wind power for AEP and other utilities will be the tax credit subsidy, which Congress consistently renews but never for very long. Morris said, “For wind to reach its maximum potential, Congress must first address the long-term extension of the federal production tax credit for wind generation. The product tax credits help make wind energy cost-competitive with other sources. But the short-term nature of the current production tax credit program and the constant uncertainty about extension serve as financial disincentives to investment by wind turbine manufacturers and wind developers and act to increase the cost of wind energy.”
Morris also noted another aspect of the political environment for wind. “With Congress expected to take action on greenhouse gas limits,” he said, “this added fuel diversity will prove important to our customers and shareholders.”
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