High gas prices spark interest in wind power development in Oklahoma

Journal Record, The (Oklahoma City), Jun 1, 2005 by Jerry Shottenkirk

Conversion to wind power is no small undertaking, but more and more utility companies are showing an interest.

And that's good for Oklahoma, according to a pair of alternative energy experts in the state.

Mike Bergey, president of Bergey Windpower of Norman, said high utility costs are prompting Oklahomans to take a look at renewable energy.

It's a perfect storm for wind power development, said Bergey, whose company for 25 years has produced wind turbines and towers for homes and farms. Natural gas is at an all-time high and no one predicts it will come down soon.

Federal and state tax credits for commercial wind facilities have helped the progress of wind power in the state.

FPL Energy, an unregulated subsidiary of Florida Power and Light, and Zilkha Energy, which was recently bought out by investment giant Goldman Sachs, have become players in Oklahoma. FPL has constructed wind farms near Woodward and Weatherford, and Zilkha and Goldman Sachs have one near Lawton.

Wind turbines stand at a height of 100 feet or more and take in the wind's power with their propeller blades.

Corporation Commissioner Denise Bode, who heads the Oklahoma Wind Power Assessment Committee, said it's an exciting time in the world of renewable energy.

I think there's a tremendous opportunity for Oklahoma, Bode said. I'm very excited about the variety of different renewables, particularly wind power, biomass, hydro, and in a smaller, way, solar.

Oklahomans should feel right at home with wind power.

We have specialized potential, Bode said. The state's Mesonet system gives us 10 years of data on wind. That's critical for investors. It tells how successful it can be and it's the best data in the country.

The national average price of electricity in the United States rose by 5.2 percent from April 2004 to April 2005. NUS Consulting of Park Ridge, N.J., indicated the average price was 7.95 cents per kilowatt-hour, up from 7.56 last year.

That's bad news for natural gas consumers but good news for supporters of renewable energy. The U.S. gets about one-third of 1 percent of its electricity from wind, and energy groups have predicted that number will increase to about 6 percent in the next 15 years.

The biggest barrier 10 years ago was the low energy prices, Bode said. We were low in wind power because it was too high a startup. Back then there were no interchangeable parts. Today the higher energy prices make it market driven.

Bode said the Mesonet system details windier areas of Oklahoma.

Wind power is intermittent power, she said. We give a mapping of the state and highlight the best area. It doesn't always blow the same. It's not like gas or coal-fired energy.

Oklahoma has come a long way in the development of renewable energy, Bode said.

We went from nothing to No. 5 in the generation of wind power, she said.

Oklahoma is the eighth-windiest state, she said.

A study recently released by the Corporation Commission indicated wind power, biomass and hydroelectric power are viable energy options.

The state has more than 176 megawatts of wind power and another 256 megawatts is expected by the end of next year.

It's no small financial chore to start up a wind farm, Bergey said.

In commercial development, a large wind farm can be built for $1,200 to $1,400 per kilowatt hour, Bergey said. That's gone up 15 to 20 percent over the last two years due to steel prices. Typically wind farms are 80 megawatts. At $1,200 per kilowatt, you're talking about $100 million. A wind farm will sell power to a utility company for 2-3 cents per kilowatt hour. With that, along with tax credits, FPL and Zilkha (and Goldman Sachs) can recoup their investment in eight to 10 years.

Last month Public Service Co. of Oklahoma signed an agreement to purchase up to 31.5 megawatts from Zilkha's Blue Canyon II wind farm over the next 10 years. The Blue Canyon II site will have 84 turbines by the end of the year.

OG&E announced last year its intentions of purchasing power for 15 years from the FPL's 34-turbine Oklahoma Wind Energy Center near Woodward. The Oklahoma Municipal Power Authority also buys power from the site.

While large wind facilities sell power to utility companies, Bergey Windpower makes renewable energy available to homeowners and farmers.

In homes and farms, the value of energy produced is 8-10 cents per kilowatt hour, Bergey said. The payback comes in about 20 years. There is no federal subsidy program for homes and farms and no federal tax credit, so it's not as attractive.

Bergey said his main markets are in California, New Jersey, New York and Vermont.

It costs about $40,000 for a home or farm, he said. It's like a home improvement project. They have radically lower electric bills. What they love to see is a utility meter going backwards.

Bergey said his company has revenues in the $3-$5 million range and has 25 employees. Bergey Windpower produces wind turbines and towers and buys its electronics from a firm in the state of Washington. Homeowners buy the equipment and a dealer installs it, Bergey said.