The Great Lakes Zephyr - Wind Energy & Hydrogen Journal

From Alt Power digest at Yahoo! Groups...

Message: 4
Date: Mon, 15 Mar 2004 11:59:42 -0800 (PST)
From: Tosha27@webtv.net
Subject: Japanese Island May Adopt Hydrogen Economy...

http://www.forbes.com/forbes/2002/1223/290_print.html
Yakushima Island, south of Kyushu, Japan, is designated by the UN as a
world heritage nature preserve. An engineering executive aims to create
the world's first zero-emission, hydrogen-exporting economy.
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Message: 5
Date: Mon, 15 Mar 2004 12:10:38 -0800 (PST)
From: Tosha27@webtv.net
Subject: Warren Buffett, Farmers Invest In Wind Power...

http://quote.bloomberg.com/apps/news?pid=nifea&&sid=akd3Lss8Xvbk
General Electric, Warren Buffett, Farmers Invest in Wind Power
Feb. 27 (Bloomberg) -- Corn and soybean farmer Roger Kas steps off his
red Massey Ferguson combine and gazes over his 1,800 acres, focusing on
his newest crop: windmills.
With corn prices 44 percent less than the 1996 peak, Kas would have to
take out bigger loans to buy seeds without the $30,000 he earns from the
two white metal poles topped with spinning blades that hum 20 stories
overhead.
``We´re looking at wind like just another cash crop,´´ said Kas, a
third-generation farmer in Pipestone, Minnesota. He sells as much as 1.5
megawatts of electricity -- enough to power about 1,200 homes -- from
the two 750-kilowatt, NEG Micon A/S wind- power generators to local
utility Xcel Energy Inc.
Farmers trying to make up for lower crop prices are joining such
investors in wind power as Warren Buffett and General Electric Co., the
biggest company by market value. Stocks of the three biggest publicly
traded wind-turbine makers, NEG Micon and Vestas Wind Systems A/S of
Denmark and Spain's Gamesa Corporacion Tecnologica SA, more than doubled
on average in the past year as governments tightened emission rules.
Worldwide wind-turbine sales exceeded $7 billion in 2003 and may double
in the next three years as U.S. government subsidies draw farmers and
power companies, the American Wind Energy Association trade group said.
The latest equipment generates about 10 times more energy than in the
early 1990s, making wind the cheapest renewable power source.
Federal and state tax incentives trim the cost of wind power to about 3
cents per kilowatt-hour, while natural gas-fired generation has tripled
to 5 cents per kilowatt-hour in the past 5 years. North American gas
demand is set to surpass supplies as soon as 2006.
Sales Rise
``Wind has become less of a scientific project and more of an energy
source,´´ said Steve Zwolinski, president of GE Wind Energy. The
unit of General Electric makes 1,000 turbines a year after buying Enron
Corp.´s wind-generation business in 2002 for $328 million. ``We see a
very strong market for the next decade´´ as oil costs rise, he said.
Wind power must overcome obstacles such as opposition from local
residents, a lack of utility lines and political debate. Congress in
November shelved an energy bill, putting $2 billion in wind projects on
hold. The bill would have extended for 2 1/2 years a tax-credit program
begun in 1992 that offered farmers last year a record 1.8 cents per
kilowatt-hour of wind power.
Global sales of wind turbines rose 36 percent on average in the five
years ended in 2002, the most recent industry figures, bringing
worldwide wind power capacity to more than 32,000 megawatts, Danish
researcher BTM Consult said. That's enough to supply 25.6 million U.S.
homes.
Return on Wind
MidAmerican Energy Holdings Co., a unit of Buffett's Omaha,
Nebraska-based Berkshire Hathaway Inc., plans to start building in Iowa
the world's biggest wind farm as soon as this year. The $323 million
project, on leased farmland, calls for generating as much as 310
megawatts from as many as 200 wind turbines.
Buffett conducts his power transactions through MidAmerican, in which he
bought an 80 percent stake in March 2000. Buffett and MidAmerican
executives who own the other 20 percent paid $2.05 billion in cash and
assumed $7 billion in debt. Buffett declined to comment and referred
questions to MidAmerican.
Iowa utility regulators agreed to let MidAmerican set rates to let the
company receive an annual return of as much as 12.2 percent on its $323
million investment, or $39.4 million a year, over the projected 20-year
lifespan of the wind farm. The company can apply for a rate increase in
the event that returns fall below 10 percent, said Jack Alexander,
MidAmerican's senior vice president of marketing and supply.
MidAmerican is using wind to comply with an Iowa requirement that
utilities in the state have 1,000 megawatts of generating capacity from
renewable sources by 2010. The wind farm will increase the state's
supplies of wind power by 66 percent, MidAmerican said.
Adjusting Speed
The company is waiting for Congress to renew tax credits before
beginning construction, Alexander said.
``We´ve got turbine contracts in place,´´ he said.
General Electric has had a better return making wind-power equipment
than MidAmerican expects from wind-power generation. General Electric,
based in Fairfield, Connecticut, said sales at its wind-turbine business
more than doubled last year to $1.2 billion. The company forecasts a 17
percent increase in sales to $1.4 billion this year and estimates profit
doubled to $100 million in 2003.
The company is building on industry improvements in turbine design, such
as the doubling of windmill heights to more than 300 feet in the past
decade, by making generators that adjust blade orientation and speed to
make more power from variable winds.
Germany, U.S. Lead
The adjustable-blade design, exclusive to General Electric, opens areas
to turbines such as the Northeast and southwestern U.S. that lack the
steady winds of the upper plains states, Zwolinksi said. ``We´ve
proven the technology,´´ he said.
The General Electric windmills are more difficult to maintain than
standard equipment, said Dan Juhl, who has helped set up dozens of wind
turbines, including the two on the Kas farm and 17 he owns across the
street. ``I won´t touch them,´´ he said.
Germany leads the world in wind-power capacity, with more than 12,000
megawatts, or 5 percent of its electricity, BTM said. Windmills
installed in the U.S. last year were capable of generating 1,700
megawatts, about four times the amount in 2002. The U.S., now capable of
generating 6,374 megawatts from wind, overtook Spain as holder of the
world's second-largest capacity.
Growth Limits
Denmark's Vestas has benefited most from the demand, with 22 percent of
global wind-turbine sales in 2002. Germany's closely held Enercon has an
18.5 percent market share, making the company the second-biggest by
sales, followed by NEG Micon, Gamesa and General Electric. Vestas shares
gained 174 percent in the 12 months ended yesterday, while Gamesa stock
rose 104 percent and NEG Micon shares climbed 77 percent.
Vestas Chief Executive Svend Sigaard said ``2003 was a big year and it
is clear that 2004 won´t be as big.´´ He declined to provide
specific estimates in an interview last week. He expects orders for
windmills to pick up with a renewal of federal tax credits in an energy
bill this year. NEG Micon and Gamesa declined to comment.
Wind-power has environmental and political limitations. Residents living
near some proposed turbine sites oppose building.
In Nantucket Sound off Massachusetts' Cape Cod, sailors and
environmentalists have opposed a plan by closely held power company Cape
Wind Associates to build this year 130 wind turbines that are 417 feet
tall to produce 420 megawatts. Turbines will reduce tourism and block
waterways, opponents say.
Tax Credits
Renewal of the U.S. tax credits, which expired Dec. 31, may come as soon
as next month when Congress plans to reconsider energy legislation, said
American Wind Energy Association President Randy Swisher. Wind power tax
credits were included in a bill introduced this month by U.S. Senator
Peter Domenici, a New Mexico Republican who is chairman of the Senate
Energy and Natural Resources Committee.
Some utilities are reluctant to pay market prices for an energy source
that runs only when the wind blows. Wind generators operate about 40
percent of the year, less than half the 90 percent of fossil-fuel
plants.
``When customers flip a switch they expect their lights to come
on,´´ said Michael Sullivan, a senior vice president at FPL Energy
Inc., the biggest producer of power from wind in the U.S. ``We can´t
guarantee that all the time with wind.´´
Only about 14 percent of the contiguous U.S. has wind capable of making
the turbines profitable, excluding unsuitable sites such as cities and
national parks, the U.S. Energy Department said. Wind generates 0.7
percent of U.S. power. To provide 20 percent of the nation's electricity
would require wind turbines covering about 0.6 percent of those 48
states. As a result, wind-power companies are turning to farmers for
land.
Cash for Farmers
Wind is the least expensive new source of electricity that doesn't burn
fossil fuel and is one of the easiest to develop, the U.S. Energy
Department says. That's one reason utilities such as Xcel Energy are
signing contracts to buy more wind power, said Price Hatcher, Xcel's
manager of renewable purchases.
Xcel Energy buys a total of 150 megawatts of electricity from farmers
with wind turbines that produce 2 megawatts or less and plans to
purchase 100 megawatts more from those family-owned generators by 2007,
Hatcher said.
The company plans a $160 million transmission grid upgrade that includes
a 90-mile, 345-kilovolt line to deliver wind power from southwest
Minnesota to Minneapolis starting in 2007.
Farms that lease land to developers such as MidAmerican and FPL rather
than buy the windmills receive as much as $5,000 a year for each
turbine.
``There´s a cash flow right out of the box´´ for farmers, said
Juhl. ``It´s a real family-farm saver.´´
School Fundraiser
Public schools in Iowa are joining Buffett and General Electric in
turning to wind power. The Eldora-New Providence school district in
Hardin County, Iowa, installed a turbine in 2002 that it expects will
generate 50 percent more electricity than the system needs. Alliant
Energy Corp., the owner of the local utility, agreed to buy the excess
power, contributing as much as $20,000 a year to the school system's
budget.
Some wind farms produce more power than surrounding systems can handle.
Wind farms in western Texas are capable of generating 997 megawatts of
power, while transmission lines can only carry 440 megawatts from the
region to more populated areas.
``Regular curtailments of wind generation will continue´´ until more
transmission is built, the Electric Reliability Council of Texas said in
an analysis of the transmission system completed last year.
Kas plans to add two more turbines to his Minnesota farm in the next
couple of years, making wind power his fastest-growing crop. After all,
he said, maintenance on wind turbines is less work than tilling,
watering or planting.
``It´s the easiest crop I´ve got,´´ he said.
To contact the reporter on this story:
Chris Martin in Chicago, or cmartin11@b...
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