Twisting in the Wind - Miami Herald

Posted on Monday, 06.30.08 Twisting in the Wind
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Florida's plan for renewables was a lot of wasted energy

For a year, while the green movement was at its height, Florida environmentalists, new solar companies, utility lobbyists and state regulators spent thousands of hours trying to determine how much of the state's power supply should come from renewable energy sources like solar and wind.

They did it because the Legislature in 2008 ordered them to do it. After sifting through thousands of pages of documents and sitting in lengthy workshops, the Public Service Commission sent its recommendations to the 2009 Legislature. A renewable-energy bill passed the Senate but died in the House. The result: A year of work wasted.

Among the major victims: The ballyhooed Babcock Ranch project, which is trying to become the first solar-powered city in the world, and thousands of construction workers who would have been hired to build new power plants.

•Buffett's MidAmerican may buy FPL wind power assets in Iowa
Buffett's MidAmerican may buy FPL wind power assets in Iowa

MidAmerican Energy Co., the Iowa utility controlled by Warren Buffett's Berkshire Hathaway, may buy wind-power assets from FPL Group rather than starting from scratch with its own windmill farms.

Such a deal would help MidAmerican jump-start a plan, filed with state regulators, to add 1,001 megawatts of wind power capacity in Iowa, Dean Crist, the company's vice president for regulatory affairs, said Monday in an interview. FPL, the largest U.S. producer of wind and solar power, offered to sell Iowa assets to keep MidAmerican from building competing farms.

TAX CREDITS

PSC lacks key data on energy

Florida's top utility regulators grappled Tuesday with the question of how much solar, wind and biofuels the state should use to produce future electric power and how much Florida electric customers should pay for the climate-friendly technology.

But the five members of the Public Service Commission concluded they don't have the information or the direction from the Legislature to answer those questions by the Feb. 1 deadline.

So, rather than give the Legislature one proposal, they're considering proposing options for how Florida can meet the goals of reducing its reliance on fossil fuels while encouraging the development of alternative energy markets at reasonable costs to consumers.

FPL Group profits jump 77 percent

While Florida Power & Light seeks a billion-dollar increase in its basic rates, its parent company, FPL Group, reported a 77 percent increase in quarterly earnings Tuesday, driven partly by market hedges on energy contracts.

The utility reported a small decline in profit, caused by more empty homes due to foreclosure and lower customer usage as people tightened their belts during the recession. But that decline was more than compensated for by a good showing of the company's unregulated energy division.

Altogether, the energy giant earned a profit of $370 million, or 91 cents a share, compared with $209 million, or 52 cents a share, for the same period last year. Removing unusual one-time items, FPL Group executives said, earnings were $401 million for the quarter, up from $375 million last year.

BY JOHN DORSCHNER
jdorschner@MiamiHerald.com

In the push to stop global warming, many experts are hearing a mighty rushing wind.

Clean and abundant wind power in vast stretches of America is not only far cheaper than solar, but as oil prices soar, it's proving to be less expensive than natural gas, a prime source of the nation's power.

At present, wind provides only 1 percent of U.S. electricity, but a federal report predicts the wind could be providing 20 percent of American power by 2030.

"Wind is ready to go, " says Christine Real de Azua of the American Wind Energy Association.

But perhaps not in Florida. Though pleasant breezes sweep in from the ocean, several experts say the quality and location of those winds make it difficult, if not impossible, to generate much wind power here at a reasonable cost.

Florida Power & Light, whose parent is the largest supplier of wind power in the nation, insisted for years it wouldn't build a wind farm in Florida because the state's breezes weren't strong enough. That changed last year when, under pressure from Gov. Charlie Crist and the public to move toward green energy, the utility announced plans for a small wind project near the Atlantic coast in St. Lucie County.

That effort has been mired in zoning disputes with neighbors who do not want their coastal skyline marred by windmills as tall as 40-story buildings. What's more, the strength of St. Lucie winds is less than half that of major wind farms in the American West.

"The power it's going to produce is so tiny, " complains Julie Zahniser of the Save St. Lucie Alliance. "It's political. Governor Crist wants to be seen as this green Republican, and FPL wants to make him happy. . . . The wind hasn't changed. The technology hasn't changed."

Ryan Wiser, a renewable-energy expert at Lawrence Berkeley National Laboratory, says a project with St. Lucie-strength winds would not be attempted in the West. "Why would you pick a place like the Southeast?"

Still, as oil and gas prices soar and Americans become more concerned about global warming, wind is now often viewed as the great savior. Vast stretches of the West -- particularly the Plains States and Texas -- now have fields of huge wind turbines that stretch for miles.

"It took us three generations to get the bugs out, " says Bob Thresher, director of the National Wind Technology Center in Colorado. The turbines kept getting bigger, the parts turning with less friction. Costs to produce a kilowatt hour of power dropped from 40 or 50 cents per kilowatt-hour in the 1980s to today's 6 to 9 cents/kwh, not counting the tax subsidies.

CHEAPER THAN SOLAR

Wiser at Lawrence Berkeley says wind energy now costs roughly a third to half the cost of solar, factoring in the tax credits for each.

The California Energy Commission calculated last year that wind in top locations could produce power for 6.7 cents/kwh, compared with 9.6 cents/kwh for a natural gas plant. These wind prices, which include all construction and maintenance costs, seem more attractive in light of today's energy market. In the past year, natural gas prices have soared by 32 percent, according to FPL, meaning wind power in good locations might be about half the price of natural gas.

The best place for wind is North Dakota, according to the American Wind Energy Association. No. 2 is Texas, followed by Kansas, South Dakota and Montana. (Florida is not in the top 20.)

LOCATION, TIMING

Virtually all the best wind places are remote. "Where the wind is best is far from the urban centers that need the power, " says John Reilly, an energy economist at Massachusetts Institute of Technology. That means more expense for adding transmission lines.

Wind's other problem is timing. While there are exceptions, wind is often at its best at night and during the fall, winter and spring, says Wiser. Utilities' greatest need is during the afternoons and summers, when air conditioners are humming. That means solar's afternoon peaks are "more advantageous to electric utilities."

Even so, many areas have come to embrace wind. It's cheap, and financially stressed farmers enjoy the $3,000 or $4,000 a year they typically get for renting land to wind producers. A turbine generally takes up one acre out of 50 -- turbines can't be too close or they block each other's wind -- and that means there's still plenty of land left for farming.

NORTHEAST CRUSADER

"We rarely hear about [protesters in] North Dakota, " says Lisa Linowes of Industrial Wind Action Group. From her home in Lyman, N.H., Linowes has become a crusader against wind farms ever since a company proposed putting huge turbines on a ridge near her home. She's become a cheerleader for many groups opposed to wind in their backyards, most of whom are in the East and Midwest.

The reality is that wind -- as clean and as green an energy source as Mother Nature can dish up -- has run into vehement opposition in some places. Some environmentalists complain the turbines kill birds. More often the critics are people who think wind is fine -- as long as the tall turbines are somewhere else.

Off Cape Cod in Massachusetts and off Long Island, wind merchants have been trying -- and failing -- for years to build turbines in the water offshore. In both cases, the plans were opposed by the wealthy owners of shoreline mansions.

FPL's sister company, FPL Energy, knows all about these fights. For years, it tried to get approval for the Long Island project before it finally gave up.

FPL Energy is "one of the most efficient wind operators in the country, " says Jay Apt, executive director of the Carnegie Mellon Electricity Industry Center. "They're very good at it."

FPL Energy has 55 wind farms in 16 states including the nation's largest, the 735-megawatt Horse Hollow field in Texas. Last week, it announced a new $2 billion wind farm to be spread over 250 square miles in North Dakota.

The company has mounds of data about the costs of producing wind power in different places, but it refuses to reveal any of it. When The Miami Herald asked FPL about costs, it replied crisply: "Wind is proportionally less expensive where the resource is more abundant."

Wind was not FPL's first choice for diversifying its power sources in Florida. Last year, the utility tried hard to get approval to build a new coal plant. Gov. Crist didn't like the idea. On June 5, 2007, regulators flatly rejected the 1,960-megawatt coal plant.

BOWING TO PRESSURE

Two days later, the utility announced it understood which way the political winds were blowing and said it planned to construct the first wind farm in Florida. "This is a great first step in seeking more renewable generation resources in Florida, " said FPL President Armando Olivera.

"I am very pleased, " Crist responded.

"I'm thrilled, " said a representative of the Southern Alliance for Clean Energy.

Buried in the press release was a statement reiterating FPL's longtime position: "While wind in Florida is not consistently strong and reliable enough to produce a large amount of electricity, FPL will explore ways to best use this resource."

FPL'S CONCERNS

Several months later, in a little-noticed filing with the Public Service Commission, the utility was unusually blunt about how poorly it viewed Florida's winds when the PSC staff asked why FPL wasn't doing more with wind, when wind power was so much cheaper than solar. That seems particularly true in Florida because experts say solar here produces considerably less energy than in the American Southwest, where solar is thriving.

FPL responded that the noted cost difference between wind and solar in Florida "may not necessarily be the case." The utility said it could be expensive to buy wind turbines designed to withstand hurricanes. It noted that even offshore, wind often does not have the strength for a viable wind project "and is reduced on the coast and further reduced inland."

SEASONAL VARIATIONS

What's more, the utility had a study showing "wind resource limited to winter seasons (October through March) whereas FPL load peak is in the summer."

FPL answered Miami Herald questions by e-mail: "Wind power is a vital part of any serious effort to address global climate change. . . . The St. Lucie site has wind speeds high enough to generate ample electricity with zero greenhouse gas emissions."

FPL and experts agree that to generate wind power in Florida, the turbines have to be on the coast, and that's what the utility proposed at St. Lucie.

At first, some of the nine turbines in the $60 million, 20-megawatt project were planned for FPL-owned oceanfront land on Hutchinson Island, where it has nuclear reactors. Others would be on nearby oceanfront public park land. The plan drew howls of protest from environmentalists and other local residents.

In February, even though the project still lacked zoning approval, the state Department of Environmental Protection announced it would help fund the wind project by giving $2.5 million to FPL, which had a profit of $836 million last year.

As opposition continued over use of public land, FPL scaled back the project in March to six turbines, all on FPL's own property. Environmental and neighborhood groups remain adamantly opposed. "This is like building a solar farm in a rain forest, " said Zahniser of the Save St. Lucie Alliance. "And there are 36 endangered species at that site. . . . We see this as ruining precious resources in Florida for absolutely no benefit."

NO PROGRESS

Three months have gone by. The county commission has yet to approve the project. "We hope the St. Lucie wind project gets a fair hearing, " FPL said in an e-mail.

The utility has kept up the pressure. It conducted a survey showing that four out of five St. Lucie residents favor the project. Critics said the phrasing of the questions misled people.

The utility notes that this is a small project. "The roughly $45 million total cost of the project works out to about 33 cents a year for the average FPL customer, or less than the price of a postage stamp."

"It's political, " insists Zahniser. "Do you know how many light bulbs you can swap out with new energy-efficient light bulbs for $45 million? This is a false green scam that diverts valuable time and resources away from true solutions."

In April, FPL released a study conducted by a sister company, WindLogics, that said FPL's St. Lucie project had a "capacity factor" to power turbines at about 20 percent of their rated power. Apt at Carnegie Melon contrasts that with North Dakota, where turbines work at almost 50 percent capacity.

Based on those numbers, Apt calculates North Dakota wind power has an unsubsidized cost of 6.5 cents/kwh, compared to about 15 cents/kwh in St. Lucie.

Thresher of the National Wind Technology Center describes the state's challenges this way: "Florida's flat and low. . . . And it's at a latitude that rarely gets strong winds." He thinks the St. Lucie location might be "marginally cost effective . . . but Florida is not a good regime for wind. It's a little better offshore."

Offshore power is widespread in Europe, but it needs good winds to justify the extra expense of building and anchoring turbines in the water, which raises the cost by "50 percent or more, " said Thresher. In Europe, that expense means builders are developing turbines with blades 200 feet long -- "That's a beast, and they're working on ones that are a lot bigger."

FPL dodged several questions about the feasibility, cost and strength of offshore turbines. "We are not proposing any offshore wind projects in Florida at the moment, " the company said.

At the moment, many wind projects around the country are on hold because the wind energy tax credit of 2 cents/kwh is set to expire at the end of the year. FPL and other wind users believe its essential and needs to be renewed, and most members of Congress are thought to favor the credit, but it has yet to pass.

Even if it does, it won't be as good as the tax credit solar gets -- 30 percent of the construction. Thresher at the National Wind Technology Center says there was a time when wind projects received a similar 30 percent tax credit. "A lot of junk got built that didn't work."

COST A CHALLENGE

Thresher says the challenge for wind is going to be improving the cost. Since 2002, wind costs have been creeping up. One reason: Demand for turbines is so high that there's a shortage, driving up prices. What's more, many parts are built in Europe, where the Euro exchange rate drives up dollar costs.

Eventually, more turbine parts will be built in the United States, says Thresher, but the great price reductions that wind has shown in the past will not be easy to repeat. Thresher thinks the best that can be hoped for is 10 percent to 15 percent drops in the West, where wind is plentiful.

"I think it's doable, " says Thresher. "But it's not going to be easy. The easy stuff has been done."

But Thresher and many others know what will really elevate wind projects is action by Congress, expected to come after the November elections, when power plants belching greenhouse gases will be forced to pay stiff penalties.

Under that scenario, a study by Black & Veatch consultants shows that the cost of wind power will remain steady while the cost of coal and natural gas could climb steadily until they are almost twice as expensive.

CHEAP, STRONG POWER

Wind power has become much cheaper over the past 25 years, dropping from about 40 or 50 cents per kilowatt-hour in the 1980s to 6-9 cents/kwh today for Western wind projects.

* Costs have plummeted as the size of the turbines grow.

* Turbines proposed for St. Lucie County would reach 400 feet high -- considerably taller than the 300-foot Statue of Liberty.

* Wind produces 1 percent of the nation's power today. By 2030, wind might be producing 20 percent of the power.

* North Dakota is the state with the best wind potential. Florida is not in the top 20 states.

PROS AND CONS Wind's advantage: It costs only one-third to one-half what solar power costs.

Wind's disadvantage: It's often strongest at night and in the winter, when utilities need it the least. Solar is strongest in the afternoon, when utilities have their biggest need.

ALTERNATIVE FUELS -- THE STORY SO FAR Earlier this month, The Miami Herald began a series examining power alternatives that would help cut back on the greenhouse gases scientists are convinced are causing global warming.

The first installment focused on solar power, which is doing well in the American Southwest but is still considerably more expensive than the typical fossil fuel sources, such as coal and natural gas.

Several experts said that Florida, despite being the Sunshine State, was not a good place for economic solar energy, but Florida Power & Light, aided by new legislation that will allow it to recover all its costs, is going ahead with three solar plants.

FPL refused to reveal to The Miami Herald its estimates for the costs of producing solar energy in Florida, but last week at Gov. Charlie Crist's summit on climate change, Lord Adair Turner, a British expert on global warming, said he had been given a cost estimate by FPL President Armando Olivera, and it was so low "the figure shocked me."

Lord Turner told The Miami Herald he had promised Olivera not to reveal the exact number, and FPL ignored repeated requests by The Miami Herald for an interview with Olivera.

Future installments in the series will look at other power alternatives, including the Gulf Stream and nuclear.