Wind proves not so mighty
Renewable energy optimists hope the breeze will pick up
The mighty wind that was supposed to sweep through the Northwest and fill the sails of the region's economic and environmental aspirations has fallen flat.
Based on bullish predictions from the past few years, the Northwest should by now be home to the fastest-growing market for wind energy in the nation. The epicenter of this emerging market was meant to be Portland, headquarters for a new wind-turbine manufacturing plant employing hundreds, and rich with deal-making capital for a fresh new industry on the rise.
This has not happened. Some quick examples:
• The Bonneville Power Administration has canceled a request for proposals that were supposed to bring 1,000 megawatts of new wind power to the region.
• The eagerly awaited Vestas North America Wind Systems turbine plant, which was supposed to be operational by 2004, is looking less likely than ever.
• The Union of Concerned Scientists, a national advocacy group that recently ranked the states by their commitment to renewable energy, gave Oregon a failing grade of D.
Energy advocates say that to make progress, Oregon needs to follow the lead of other states in requiring energy companies to increase their renewables by 1 percent a year.
Alan Nogee, the scientist union's energy program director, said a handful of recent wind projects in Oregon was not enough to compensate for the state's lack of hard laws and well-endowed funds.
'Those projects show Oregon's potential,' Nogee said. 'But it is hard to guarantee progress when Oregon has not taken the step that other states have.'
Big expansion canceled
Oregon's wind power plants, all built since 1998, have the capacity to generate 218.4 megawatts of electricity, according to the American Wind Energy Association. The Renewable Northwest Project, a Portland-based advocacy group, counts more than 580 megawatts throughout the region as renewables,
including geothermal, wind and solar projects.
By either measure, the Portland-based BPA's proposal to add 1,000 megawatts of wind power to the grid would have represented a huge increase in an emerging market.
But the request came in 2001, when new power was selling for a premium. More than 6,500 new megawatts of wind capacity were installed worldwide that year, by far the largest investment in wind power ever.
The energy crisis has since vanished into history, and the market for wind power, at least in the
United States, has flattened. The BPA decided to drop its ambitious wind plans this spring.
'Due to financial constraints, we were not able to execute any of those agreements,' said Tom Osborne, a BPA engineer.
Gone with the wind
In the meantime, the new Vestas plant Ñ praised prematurely by U.S. Sen. Gordon Smith, Portland Mayor Vera Katz and other Oregon leaders Ñ seems to have vanished.
'Nothing new is happening with Vestas,' said Michael Ogan, project manager for the Portland Development Commission, who tried to persuade the Danish wind giant to invest in Oregon. 'The status of the financial market and the production tax credit haven't changed, and both of those would need to be precursors to anything happening with the Portland plant.'
The company's most recent reports to investors show that the flat market for power was one factor in the decision by Vestas not to build in Portland.
Other factors were the poor performance of the U.S. dollar in comparison with the euro, and the uncertain future of a tax subsidy for building wind power infrastructure.
A federal production tax credit for renewable energy projects is scheduled to expire at the end of 2003. Smith, a Republican, has pushed for legislation to extend the subsidy for up to 10 years, but his proposal is buried within a much larger debate over the Bush administration's energy policy.
A vote is not expected until the fall.
Vestas maintains its U.S. headquarters in downtown Portland but did not return calls for this story. The firm's top executives, Chairman Bent Carlsen and Managing Director Svend Sigaard, wrote in their 2002 annual report that the market in the United States was 'distinguished by uncertainty' and down about 75 percent from 2001.
'Vestas is therefore viewing the expectation for 2003 in the United States from a perspective of caution,' they wrote.
A bad grade
Portland's wind power boosters, already stung by Vestas' turnaround, were further annoyed by last month's report from the Union of Concerned Scientists. The report gave Oregon a failing grade for its lack of commitment to renewable energy.
The report gave out only two A minuses, to California and Nevada, both of which have forced their utilities to increase their use of renewables by 1 percent each year. Oregon was one of 34 states to get failing grades.
Rachel Shimshak, executive director of the Renewable Northwest Project, argued that a fair grade would have been a B. 'The measures that they looked at aren't a very good reflection of what's really going on in our state,' she said.
Better times ahead?
Shimshak remains optimistic about the future of wind power in the Northwest.
'Our hope is that we'll see a sustained, orderly development of renewables for the region,' she said. 'Unfortunately, the utility business tends to go in a lot of fits and starts. Still, in the early 1990s we had no new renewables and now we have 580 megawatts. We think that's a lot of progress.'
Shimshak points to other signs of progress, including:
• The half-dozen or so wind energy developers that have set up offices in Portland and are 'eager to compete.'
• The high interest from local consumers Ñ business and residential Ñ in buying green power.
• The increasingly competitive cost of wind power, especially given the volatility of natural gas prices.
• An ambitious plan from PacifiCorp, the parent company for Pacific Power, to add 1,400 megawatts of renewable energy to its supply over the next 10 years.
But PacifiCorp spokesman David Eskelsen emphasized that the document calling for the new renewables, an 'integrated resource plan,' is 'not a rigid document' and is subject to change every two years or so.
PGE spokesmen insist they are open to considering renewables as part of the mix. More than 37,000 customers of PGE and Pacific Power have signed up to pay extra for various 'green power' options.
Among the wind energy development firms that have set up offices in Portland are Renewable Energy Systems, SeaWest and Zilkha Renewable Energy. Portland also is the headquarters for PacifiCorp's Power Marketing Inc., the unregulated sister company of PacifiCorp that was named wind-power marketing firm of the year last year by the American Wind Energy Association.
The law firm Stoel Rives also has gotten into the wind power field and is working on permitting issues throughout the region, although there is little work for now since most of the projects are on hold.
On the demand side, more Portland firms, such as Norm Thompson, CH2M Hill and Lucky Labrador Brewing Co., are opting to pay more for 'clean energy.'