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Happy convergence of man and resource

Wind, wheat farmers and a well-maintained grid form a powerful force for wind power development in the Pacific Northwest. Landowners and the region's utilities are happily working on facilitating many more wind farms yet

In the area surrounding the mighty Columbia River, which divides the US states of Oregon and Washington, wind is an almost constant presence. It speeds down through the river cliffs, making parts of the river a fabulous playground for windsurfers. It ripples constantly over the wheat fields and the cattle ranches that are the main feature of the counties extending both north and south of the river.

Wind is a well-known presence here -- and so is wind development. A first wave of prospecting in the 1990s, buttressed in part by Enron money before that company's downfall, led to Stateline, the 300 MW wind farm that straddles the Washington-Oregon state border and for some time the world's largest.

Now a next wave of wind is breaking, pushed forward by rising energy prices, a maturing industry with pockets full of patient capital, and the right combination of local factors including Renewable Portfolio Standard (RPS) legislation on the two states' horizons. Oregon and Washington, despite lying only midway in the American Wind Energy Association's ranking of US states for wind resource, have now inched their way to seventh and eighth places in terms of wind plant developed.

Most recently PacifiCorp put 101 MW online in August as the turbines at Leaning Juniper I started turning near Arlington, Oregon. Meanwhile Big Horn, a 200 MW project owned by Scottish Power subsidiary PPM Energy, also got up and running in Bickleton, Washington.

Further down the line, Stateline's owner FPL is making headway with plans for expansion, aiming to add 203 MW, while a new entry company to the wind power market, LifeLine Development Group of Sacramento, California, has submitted an application to build 750 MW to make up the Shepherds Flat Wind Farm, also near Arlington. All in all, 2200 MW of wind plant is on the drawing board just in the Columbia Gorge region.

Contrast that with California, which took two decades to build its 2300 MW of wind and now only has 500 MW in planning. The sunshine state was also recently eclipsed by Texas as the US wind leader.

If the first time wind developers came knocking a few years ago Gorge region farmers and ranchers and local power planners were surprised, this time they are better prepared. The Bonneville Power Administration (BPA), the Pacific Northwest's grid operator, together with the Northwest Power and Conservation Council, is currently gearing up to support the integration of as much as 6000 MW of wind plant in the Northwest system by 2020. The farmers and ranchers are not sitting still either. In Klickitat County, Washington, one hot spot of development efforts in the region, a trio of concerned ranch and farm owners set up a corporation, Praise The Wind (PTW), to help other owners secure favourable leasing contracts with wind developers. "There's no downside," says PTW principle Cheryl Woods. "It's absolutely marvellous to get cash flow from a resource that used to be a pain in the butt."

Hydro's happy legacy

Hydropower has long dominated the Pacific Northwest's energy picture. President Franklin Delano Roosevelt built huge dams on the Columbia and other regional rivers during the depression of the 1930s and sanctioned the BPA, which in turn built and operated the power grid to move electricity from the dams around the region. It is this well-developed grid that makes it immeasurably easier for wind developers to get their projects connected. It also makes it convenient to sell surplus generation to power-hungry utilities further south in population-heavy California. All the output from Big Horn's turbines is being sold hundreds of miles south to the Modesto, Santa Clara, and Redmond Public Power Agency, known as the MSR utility.

BPA is already adding substations in the Columbia Gorge to handle the additional amounts of wind going in to the system. The latest went online in August to handle the new output from Leaning Juniper and two others have been built in the previous two years. But the real story, according to Elliot Mainzer, BPA's manager of customer service planning and engineering, is the coming together of planners to manage wind integration in the future.

"At 1800 MW, we'll be fine," Mainzer says. "We think we'll be okay for a couple of years. We use some of hydro's flexibility to manage more wind. But beyond two, three, four thousand megawatts, that's where the questions start."

While BPA and the region's utilities are generally supportive of new wind, Mainzer says the pace and scale precipitates concerns that need to be dealt with systematically -- and creatively. This year, a steering group and a technical group comprising regional experts are both working to get a better picture of where developments are clustered and to see how other regions or countries have approached large scale wind integration. After that the groups will spend about six months tackling the questions of maintaining system reliability and flexibility -- and the trickier issue of who will be responsible for resulting costs.

"At some point the question pits the benefits of wind against whether it is worth spending additional money to maintain reliability," Mainzer says. The groups will detail longer term options for transmission planning and expansion, "flexibility augmentation" and wind forecasting, and associated costs.

All in all, Mainzer is fairly optimistic. Wind's current contribution to the Northwest system hovers at around 3% while the accepted wisdom is that until wind is supplying 20 percent of demand, little change has to be made to the system and thus the additional cost remains minimal. And while in the US nationally power transmissions systems have been gradually rusticating, BPA has continued to upgrade: transmission congestion is not a looming issue. "We're really taking a look at what is needed to support all that new wind under development," Mainzer says.

After proximity to power transmission lines, a second factor contributing to the growth of wind development in the Columbia River Gorge is motivated farmers and ranchers. In the mostly rural areas that straddle the gorge, landowners, government, and wind developers have found ways to effectively collaborate. In counties with names such as Skamania, Klickitat, and Wasco, cash-starved governments can get needed infusions for services such as fire departments and school districts through wind farm developments. The 75 MW Klondike II addition to a plant in Sherman County is estimated to bring in an extra $700,000 in tax revenues -- a 30% increase to the county's annual general fund.

Benefits

To Cheryl Woods, a landowner in Washington's Klickitat County, the possible benefits are as good or better for farmers and ranchers as they are for county governments. "It might just prove the difference between being able to hold onto a farm for the next generation and being forced out," she says.

Woods, along with wheat farmer John DeMoss and lawyer Victoria Kane, formed Praise the Wind to create a strong negotiating based for eager landowners. Not, Woods says, because they were necessarily getting a bad deal from wind developers, but to make sure contracts being written protected owners from unnecessary risks. For the Biglow Canyon wind farm in Sherman County, Oregon, PTW got 23 owners owning approximately 80,000 acres together, then turned to Orion Energy LLC and started negotiating. Orion's project, which received its building permit in June 2006, is planned to be between 350 to 450 MW.

The result of PTW's negotiation, Woods says, is "stronger royalties than have ever been done before," and advantages on both sides of the negotiating table. Orion had it easier with a single point of contact, Woods says, and landowners who paid one percent of their royalties to PTW for negotiation also got their tax paperwork completed.

Woods says she cannot see any downsides for farmers and ranchers who are lucky enough to have a wind plant sited on their land. "My brother just custom farms right around the turbines, it's completely doable," she says. "I have not talked to a single landowner that thought this was not a good idea."

The future looks bright for the wind developers continuing to prospect in the Columbia River Gorge. Even though the wind resource is "adequate, not screaming" as Dana Peck of Horizon Wind Energy describes it, all other factors seem to be favourable.

"Even ignoring the fact that more capacity is coming online, demand for wind is staying constant," Peck says. "People are now in this business for the long run. The cyclical market is also in the past. There's overall acceptance of the resource and the patient money is in." Northwest utilities are getting into wind (Windpower Monthly, September 2006) and developers are showing little concern that the on-again, off-again Production Tax Credit (PTC), this time set to end at the end of 2007, will permanently expire.

In the same way that setting minimum standards for the proportion of renewables in electricity supply portfolios proved to be significant for stimulating wind markets in Texas and California, both Oregon and Washington have standards under consideration. Washington's is a ballot measure known as I-937, which the state's voters will decide on in November. It requires utilities to obtain 15% of their electricity from renewable resources such as wind by 2020.

Utilities are taking a neutral stance to I-937, saying they are not against developing more wind but would rather not have it forced upon them. Regional energy expert Rachel Shimshak of the Renewables Northwest Project in Portland points out that 20 other states have passed legislation for minimum standards of renewables -- and as she puts it, "the sky has not fallen."

Whatever voters decide, Oregon is right behind with its own, more ambitious plan. A task force appointed by state Governor Ted Kulongoski is writing up a mandate calling for 25% of energy to come from renewables by 2025, with wind sure to be a large part of the equation.

No signs of slow down

Though Shimshak advocates a broad and diversified portfolio of renewables in the Northwest, not just wind, she says the rising cost of wind development globally is not going to have a dampening effect on the local market, at least not yet. Analyst Ryan Wiser of the Lawrence Berkeley National Laboratories in California agrees. Rising costs in part indicate a maturing industry, Weiser says, with manufacturers taking profit after years of investment.

In other parts of the state, such as along the Oregon coastal area and in more urban centres, developers such as Horizon Wind Energy have met more resistance to large new projects. The company is not having much luck on its biggest Northwest project, in the Kittitas Valley north of the Columbia Gorge in Central Washington. Despite scaling Kittitas back from 121 to 65 turbines and dropping tower heights, local officials recently rejected the project. Nonetheless, Peck remains bullish for wind's outlook, especially in the gorge.

"There is a scenic area to protect here, but also vast areas outside of that scenic area to explore," Peck says. "Add to that the definite mix of factors favouring wind and you get a lot of wind developers out there that are going to continue to knock on peoples' doors."

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