Activity to repower California's early wind farms and replace old technology with more efficient modern turbines was effectively stopped in 1999 by a provision added to wind's federal production tax credit (PTC). That barrier to repowering could come down this year if regulatory approval is forthcoming for a repowering deal struck between wind project developer G3 Energy of Dallas, Texas, and giant California utility Pacific Gas & Electric (PG&E).
The PTC provision, known as the California Fix, "essentially requires the abrogation of existing contract provisions in order for a project to benefit from the federal PTC," says Nancy Rader of the California Wind Energy Association (CalWEA). In other words, to access the PTC a developer has to give up its standard contract and start negotiations for an individual deal with a potential power purchaser. Since the fix was passed into law, only 23 MW of repowered projects have been built in California, none of them in Altamont Pass. Meantime, up to 1000 MW of installed capacity eligible for repowering in the state, including 585 MW at Altamont Pass, has been left on the table.
Commenting on G3's newly worked agreement with PG&E, Rader says: "It is significant because it is the first time that a California utility has sought to facilitate wind project repowering by negotiating an agreement that satisfies restrictions contained in the federal wind energy Production Tax Credit (PTC)." G3 is ready to move ahead and repower 37.55 MW of 1980s vintage turbines at its Buena Vista site in Altamont Pass and PG&E is ready to buy the power -- if the California Public Utilities Commission (PUC) approves the new contract agreed between the two. It requires the project to be completed this year, says G3's George Hardie III. That means that by July he must obtain the needed project permits from Contra Costa County and that Congress must have extended the PTC. Hardie, current president of CalWEA, adds that the new contract, which replaces the current California Standard Offer 4 contract, "works for us and it works for PG&E."
In agreeing to give up its current SO4, or qualifying facility contract, G3 says goodbye to a premium price $0.0537/kWh. The new contract, which also has a fixed price, is for the purchase of far more power by PG&E and allows the developer to use the PTC, worth $0.018/kWh, says PG&E's Rich Moran. The contract meets the dual purpose of increasing renewables production and saving money for ratepayers, he says, adding that he expects the PUC to approve the contract early this month.
G3 and fellow developer Enxco, its partner in the Buena Vista project, will replace nearly 38 MW of antique Windmaster, Danwin and Nordtank turbines with Mitsubishi 1 MW machines. Hardie says the installed capacity will remain largely the same, but due to the number of turbines currently not operating and the higher efficiency of the new Mitsubishi turbines, the wind farm's energy output will increase from about 20 GWh a year to more than 100 GWh.
The difference in project output will help PG&E meet its requirements under the California renewable energy standard. Under the minimum standard, the utility must add 1% of renewables power to its additional sales each year until renewables make up 20% of energy sales by 2017. Moran says that about 13% of sales to PG&E customers are currently supplied by renewable energy.
Hardie has a long history in wind power, most recently with Zilkha Renewable Energy, which at one time owned the Buena Vista, Tres Vaqueros and Patterson Pass projects in California. Now owned by G3, they total about 90 MW. He left Zilkha in March, forming G3 with current business partners Pat Volkar and Roland Coombs.
Wind industry developers believe that redevelopment of projects using larger and fewer turbines spaced further apart and with slower rotating blades can significantly reduce bird deaths at Altamont Pass. The wind farms in the area are reputed to be the most lethal for birds anywhere. In January, the Center for Biological Diversity (CBD) filed suit against wind farm owner FPL Group Inc and its partner in its Altamont Pass Wind Resource Center, NEG Micon, in an effort to stop the Alameda County Board of Supervisors from extending the conditional use permit owned by the companies. The CBD argued that the permits should not be renewed without extensive environmental review, specifically of the problems with bird deaths at Altamont Pass wind farms.
FPL says it already is doing what it can to prevent bird mortality and has been working with the California Energy Commission and the US Fish and Wildlife Service, which oversees federal wildlife protection laws. But while repowering is something the company periodically evaluates, it has yet to moved ahead with its Altamont Pass facilities, says FPL's Steve Stengel.
As the first potential repowering in the Altamont Pass, G3's project is important. It will give local agencies and the Fish and Wildlife Service the data they need to assess how much repowering will reduce bird fatalities, Rader says.
"We will be the guinea pig," Hardie admits of his project, which he says will be "avian sensitive" and could be the first to prove that bird deaths will drop once a project is repowered. "There will be before and after assessments, as well as using it to compare to projects not repowered."
Although there are many factors that contribute to bird kills, his first-hand experience is showing that the size and spacing of turbines makes a difference. Of the 90 MW in Altamont Pass projects owned by G3, the 28 MW Tres Vaqueros project, which has the largest turbines -- 85 Howden 330 kW wind turbines -- has just one-third the avian deaths as does Buena Vista. "It's encouraging to us that fewer turbines appear to significantly reduce avian fatalities," he says. The Buena Vista wind project is scheduled for completion before the end of 2004.