Monday, July 25, 2005
Windpower prices fall as oil, gasoline prices double
David Crowder
El Paso Times
While oil prices have more than doubled in the past two years, and gasoline prices have gone up with them, the cost of generating electricity by wind has fallen 80 percent in the past decade.
Along ridges and peaks of the Delaware Mountains and other small ranges east of El Paso County, half a dozen energy companies have erected hundreds of massive wind turbine towers in recent years to take advantage of the growing market for renewable energy.
That's because Texas ranks second in the nation behind North Dakota for its wind- energy potential and West Texas is the windiest part of the state.
El Paso Electric, with its rates frozen for the past decade and for the next five years to come, hasn't invested much in the wind market, but it has had two turbines spinning out electricity since 2001 in the Hueco Mountains 35 miles east of the city.
"Our two wind turbines are rather small, not on a wind farm scale, but we have a voluntary renewable energy rate for customers," said the electric company's manager of economic and rate research, Joe Provencio.
The two turbines cost $2.2 million and generate a megawatt, or 1 million kilowatt hours a year, which enough to supply more than 500 El Paso homes with power.
For $1.92 per 100 kilowatt hour plus their regular electric costs, El Paso Electric customers in Texas can effectively buy their power from the wind turbines.
The average El Paso home uses about 500 kilowatt hours a month -- half the state average -- and is billed $57.49.
Upper Valley resident Dick E. Sargent uses a lot more electricity than that for his 8,000-square-foot home and pays for five 100 kilowatt hour blocks of wind power.
"I do it because wind power in this part of the country is the way to go," said Sargent, whose last electric bill was $286.
That's high by El Paso standards because he runs three refrigerated air units to cool a home that is more than four times as large as the average house.
"I thought about going solar when I built my house, but I was told it would cost me $40,000 for half of what I needed," he said.
His investment in 500 kilowatt hours of renewable energy costs him less than $20 a month.
Rajesh Tahiliani, who teaches statistics and management science at the University of Texas at El Paso, signed up for 10 power blocks, or 1,000 watts a month, which is more than his West Side home actually uses.
"I read a few articles on wind power, and it appears that there is a lot of promise and that it is a safe way of harnessing power," he said. "I also realize there is still more work that needs to be done."
Another selling point for the utility's wind power program is that it saves approximately 2.4 million gallons of water a year that would otherwise be converted to steam to drive the turbines at the utility's gas-fired plants.
Teresa Souza, spokeswoman for El Paso Electric, said more than 90 percent of the available power-blocks are bought each month, and that the utility is considering buying a third wind turbine with the $1 million in its renewable energy account.
The biggest investor in wind energy in West Texas, Texas and the world is Florida Power and Light's FPL Energy, which has erected 563 wind turbines that generate more than 513 megawatts of electricity an hour in West Texas.
Each megawatt of electricity is enough to serve about 250 homes, so FPL's wind turbines are providing enough power for more than 128,000 homes -- or very nearly every single-family home in El Paso.
But the power is sold to Central Texas.
"We've been in the business for more than 15 years and we believe in renewable wind power," said Steve Stengel, spokesman for FPL Energy, which has 45 wind projects in 15 states.
"One of the reasons there is such popularity today with wind energy is it has become more more economical in the last few years and the technology is improving while fossil fuel prices continue to increase," he said.
Given the scale of FPL's wind farms, the company is able to sell wind-generated electricity to its wholesale customers for 3 to 5 cents per kilowatt hour, well below the 11 to 12 cents that Provencio said it costs El Paso Electric to generate a kilowatt hour with its two wind turbines.
FPL's cost is also competitive with El Paso Electric's overall system average of 4 to 4 1/2cents per kilowatt hour of electricity generated by a combination of nuclear, gas, coal and wind generation.
That cost is down from as much as 30 cents per wind-generated kilowatt hour in the 1980s.
How does the retail price of wind generated electricity compare with the other forms of generation nationally?
Those comparative figures are elusive -- so elusive that Karen Freedman, spokeswoman for the U.S. Department of Energy's Information Administration, said her agency could not provide them.
"We don't collect cost data and (utilities) don't want to give it to us," she said.
The closest thing the Department of Energy could provide was a table showing anticipated future costs of power generation by different methods.
By 2015, the department estimates, the per-kilowatt-hour costs of electricity generated by new plants would be 6 cents for nuclear, 4.9 cents for wind, and 4.8 cents for coal or gas.
But Freedman said those cost estimates do not account for the skyrocketing costs of energy in the past year that have seen the price for a barrel of oil go to $60 from $25.
Christine Real de Azua, spokeswoman for the American Wind Energy Association in Washington, said, "The big advantage to wind power is the fact that the cost of power is stable over time once a wind farm is built."
Put another way, wind will always be a free, nonpolluting resource, she said.
David Crowder may be reached at dcrowder@elpasotimes.com; 546-6194
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