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The hottest dish coming from the first day of Windpower 2011, the wind industry’s biggest conclave, which convened Sunday at the Anaheim Convention Center just down the street from the happiest place on earth, was that Mickey Mouse wants to build a 2.5-megawatt GE turbine in Tomorrowland, but Goofy is leading a protest against it because it might spoil his view of the Matterhorn.
Goofy is half right. One of the keys to a successful wind project is putting it in the right place. That was what the wind industry learned when the poorly sited Altamont Pass project, one of the first of three utility-scale wind farms, all built in California in the early 1980s, ran into a series of devastating complaints, including that it spoiled the view and was a travesty to avian migration. But what went wrong in Altamont Pass was rectified and improved on in the San Gorgonio Pass and in the Tehachapi Mountains -- and the industry kept growing.
U.S. installed wind capacity now stands at more than 41 gigawatts. Wind energy generates 2.3 percent of U.S. electricity and the industry is on course to match the status of nuclear energy before 2030 by providing 20 percent of U.S. grid power. To do so, however, wind will have to deal with more than Goofy’s complaints. But the industry has shown it is about solutions, and the Anaheim Convention Center is abuzz with solutions; three that were noted today show the breadth and creativity of thought leaders in the space.
The U.S., of course, is still something of a laggard in wind. There are 19 working ocean wind farms in Europe and one in China, and the Europeans and Chinese are busy building more. Europe plans to get 40 percent of its power from offshore wind by mid-century.
China’s government recently announced it will introduce new standards for its wind industry next month that will drive the manufacture of 2.5-megawatt and bigger turbines suited for the offshore environment. The standards, China wind industry watchers believe, will force consolidation of the turbine manufacturing sector and lead to the absorption of the smaller companies not ready to make machines capable of competing in more demanding ocean conditions.
The U.S. wind industry has no offshore projects and none ready to build. The controversial Cape Wind project has been fighting for life for nearly a decade. Other projects in U.S. federal waters are still working to meet federal environmental and other regulatory requirements. Projects in state waters would face fewer red tape rigors but would be near shore where locals like Goofy would complain about aesthetic impacts.
Richard Cogen, an attorney with wind industry legal mentors Nixon Peabody, confirmed that their client Fishermen’s Energy has come up with what may be a unique solution to that conundrum. It has convinced the leaders of tourist mecca Atlantic City that the six-turbine project it has secured permits for and expects to begin building next year in New Jersey state waters will be a tourist attraction.
The second solution comes from one of Broadwind Energy’s three businesses, the manufacture of gears for wind turbine gearboxes. Housed in the nacelle, the gearbox is the single biggest source of both turbine maintenance requirements and mechanical failure. CEO Peter Duprey explained that his company, the only publicly traded (Nasdaq: BWEN) pure-play firm in the wind sector, will soon begin tests -- the details remain temporarily embargoed -- of rebuilt gearboxes, utilizing Broadwind’s expertise in gears to make the rebuilt components a workable substitute for new gearboxes at a significant savings.
The third solution is a financial market product that draws on the advanced weather forecast and wind resource assessment capabilities of 3TIER to predict the needs of a wind developer for hedging against losses due to wind variability. The financial product is offered through Galileo, a weather risk management specialist.
3TIER can inform a wind farm developer of the degree to which his project is at risk of failing to meet minimum volumetric output needs due to wind’s seasonal or random variability. Galileo can then apply insurance industry actuarial skills to determine a price at which the developer can hedge that risk. With such a market tool, a developer can avoid the potentially profitability-ruining option of increasing or drawing on debt reserve.
More importantly, hedged risks are the kind of risks most favored by the financial institutions the wind industry relies on for project financing. 3TIER officials intimated that a comparable hedge will soon be available to solar power plant developers.
It is such solutions that have made the wind sector the most successful of the U.S. renewables. It is the capability to still generate such solutions that arguably has moved the happiest place on earth down the street from Mickey’s theme park to Anaheim’s convention center this week.