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United States

Steps taken to boost market recovery

A series of initiatives in the Pacific Northwest of the US aimed at stimulating greater use of clean energy technologies is set to remove much of the current market uncertainty for utilities and encourage them to develop or buy power from renewable energy sources. In addition to the current draft plan for deregulation of the region's electricity market, a state committee in Oregon is recommending a global warming standard for new gas-fired plants that would eventually be applied to new generating facilities across the board. Portland General Electric is proposing to supply green power to large commercial consumers at a premium of about one cent a kilowatt hour.

The Pacific Northwest is rapidly becoming a test-bed for North America's electricity future. A series of initiatives aimed at stimulating greater use of clean energy technologies is set to remove much of the current market uncertainty for utilities and encouraging them to develop or buy power from renewable energy sources.

In a move that is unprecedented in the United States, a state committee in Oregon is recommending a global warming standard for new gas-fired plants that would eventually be applied to new generating facilities across the board. Under the proposal, carbon-dioxide emissions would have to be off-set by some method such as efficiency, tree planting or with a non-polluting power plant -- such as a wind farm. The recommendation, unveiled on October 23 by the Oregon Energy Facility Siting Task Force, already has the backing of the utilities Portland General Electric and PacifiCorp, the Oregon Office of Energy and The Renewable Northwest Project (RNP).

"We're really pushing the envelope here," says senior RNP analyst Pete West. "It will give utilities a certainty about what they have to do in Oregon." Emissions of CO2 would have to be cut by at least 17% compared to the most efficient gas fired plants now operating. Mitigation measures, whether met by a gas plant selling its excess steam or with tree planting or wind, would not have to be located in Oregon. "CO2's a global gas," explains West.

The global warming standard is in addition to the current draft plan for deregulation of the region's electricity market, which could also take the whole area to the cutting-edge in providing a longer period of certainty. Public workshops and hearings on the draft report of the Comprehensive Review of the Northwest Energy System are continuing until mid-November in Idaho, Washington state, Oregon and Montana.

After almost a year of review, the 20-member steering committee is recommending a package for restructuring that would bring the region to the forefront of the current power market revolution, along with California, Rhode Island, and Massachusetts. Within the package, a modest "systems benefit charge" of 3% -- amounting to an estimated $210 million yearly -- would raise money to encourage renewables, conservation and "low income energy services" for ten years -- a significantly longer time frame than is being proposed in California. That yearly amount, however, is only about 65% of what was spent in 1995 by the region's utilities and the federal Bonneville Power Administration for similar measures. Some one-third would be for "'market transformation" for renewables and conservation, of which about $34 million yearly would be for commercial scale renewable energy projects, $5 million yearly for "distributed" renewable projects, and $1 million yearly for research and development such as wind assessment. This final category is to bring data such as that collected by now bankrupt Kenetech Windpower into the public domain, says West.

It is hoped that the funding -- once leveraged -- could lead to completion of 11-12 large renewable energy projects within the decade, including four stalled wind projects amounting to 175 MW: the Wyoming Kenetech wind plant; the two Columbia Hills plants; and the Vansycle proposal in Oregon.

The committee also recommends: an independent transmission grid operator to ensure fair access and suggest that by 2001, providers, regulators and others should be prepared for open access.

Commercial green pricing

In yet another gauge of change, Portland General Electric (PGE) is proposing to supply green power to large commercial consumers at a premium of about one cent a kilowatt hour. If the scheme proves popular with companies, wind would have a guaranteed market. If approved, the proposal would allow industrial, commercial and general service customers to buy a minimum of 3% of their load from renewables, or a fixed monthly amount of 20,000 kWh or more for at least a year. The maximum would be about five average megawatts yearly.

"We would like to see them offering it to all customers," laments RNP's Pete West. He says utilities do not seem to be ready to offer widespread green pricing because their accounting methods are not flexible enough to allow green pricing for many small residential customers. Large industrial users who adopt green pricing, however, can be accommodated more easily.

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