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United States

Booming market in Northwest -- Wind power sellers happy

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California utilities, driven by state law to supply 20% of their electricity from renewables by 2010, are buying ever more wind energy from projects going up in the Columbia River Gorge, which straddles Oregon and Washington. But power retailers in California's northern neighbours, with their own renewables mandates to meet, are not enamoured by the wind drain south. Meantime, it is a seller's market for wind farm owners.

"We're seeing a lot of upward pressure on prices for renewables and California is certainly a major factor," says Steve Corson of Portland General Electric, which owns the 125 MW Biglow Canyon project and buys 100 MW of wind from other owners. "There's stiff competition throughout the region from renewable energy standards in Oregon, Washington, California and elsewhere," Corson adds. "So I think the upward pressure applies to power purchase agreements, but also to competition for the actual sites, and potentially for ownership as well."

Power from at least five Columbia Gorge wind projects -- representing 650 MW -- makes its way south to California (table). "We're not targeting specific area resources for wind, but look for the market to bring us qualifying projects," says Jennifer Zerwer of Pacific Gas & Electric (PG&E) in San Francisco. "We're looking for a competitive price for our customers." Overall, PG&E has nearly 1200 MW of wind power in its portfolio and is on track to meet the 2010 goal.

Puget Sound Energy (PSE), the largest utility in Washington state, handles the regional competition by operating its own wind plant. The company bought its first project in 2005 and now has 386 MW, with more on the way. "You can think of it as energy independence for our state and our customer base, where we are able to have our own renewable energy and not be out there in a competitive market," says PSE's Andy Wappler. "Clearly, if you're buying power on the open market from somebody else, those benefits don't all stay at home."

Californian utilities in pursuit of Northwest wind power have a clear advantage. Customers in the state pay roughly $0.15/kWh for their electricity, while those in Oregon, with abundant supplies of cheap hydroelectric power, pay less than $0.10/kWh. With hydropower not counting towards the government imposed standards in any of the Western states, California's utilities are scrambling to meet their requirements through solar, geothermal and biomass sources.

Some commentators say the competition for green power will be a boon for wind power development throughout the region. "Demand goes up and supply responds," says Rachel Shimshak of Renewable Northwest in Portland, Oregon, a clean energy advocacy group. "The increase in supply will help moderate the price over time." Shimshak says 10 GW of wind power is either operating, permitted or in the permitting process in the Northwest, compared with just 1 GW at the start of the decade. "More competition is good for consumers," Shimshak says.

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