Wind Power

1
Wind Power Can it make sense in Michigan ?

• Tom Hewson
• Energy Ventures Analysis Inc
• Arlington Virginia
• Hewson_at_evainc.com
• March 2003

2
Michigan Wind Power Overview

• Existing Michigan renewable power generation is
  dominated by biomass and hydroelectric. Less
  than 1 of existing state renewable generation is
  from wind power (estimated 3,600 MWh in 2002).
• Michigan mostly has wind resources of class 3 or
  lower, making wind power production costs high
  and non cost-competitive vs. conventional fossil
  power sources.
• Demand for high cost wind power has been very
  limited in Michigan because of its high cost. Two
  utilities offer wind power purchase options.
• Consumers Power Green Power Program. Michigan
  Public Service Commission authorized Consumers
  Power to supply up to 50MW of wind power to
  consumers willing to pay 3.2c/kWh higher cost.
  Only 500 consumers representing 2,800 MWh (0.008
  of CMS 2000 sales) of load has signed up for
  program. Therefore, CMS current program contract
  demand is met by 2 WTGs-1.8 MW.
• Traverse City Green Rate Program City green rate
  program (1.58c/kWh premium) fully subscribed but
  city has no plans to expand program beyond the 1
  WTG- 600 kW. WTG output was 33 less and
  production costs 50 higher than projected.

3
Michigan Wind Power Overview

• Local ordinances for wind power development
  should be designed to protect public health
  safety and minimize adverse environmental
  impacts. Elements of ordinance should address
• Setbacks (Safety, wind access, scenic)
• Safety security
• Fire protection
• Noise
• Interconnection electric distribution
  facilities
• Unsafe inoperable wind energy facilities
• Abandonment Site Reclamation
• Interference with navigational systems
• Soil erosion
• Certification
• Monitoring
• Time related conditions
• Height limits

4
Existing Wind Capacity is Highly Concentrated 6
States account for 88 of existing capacity5
States accounted for 98 of 2000 wind
generationWind power supplied only 0.15 of US
2000 power output that is far less than the
output of Michigans Monroe station
5
Why is Wind Power Capacity So Concentrated?

• Few states offer significant green power
  incentives to offset higher wind production costs
• Renewable portfolio standards Mandated purchases
  from non-cost competitive renewable sources
  (California, Texas, Minnesota, Iowa)
• Direct state payments to offset portion of higher
  production costs (California, Minnesota)
• Net metering (California, Iowa, Texas, Oregon,
  Washington)
• High quality wind resources (gtClass 4) limited
• Large available land area-
• Rule of thumb had been 40 acres/turbine to avoid
  wind turbulence interference. AWEA believes 75
  acres/turbine required for larger new turbine
  designs. To displace energy from CMS smallest
  coal unit would require turbines covering 100
  sq-mi.

6
US Wind Resources-The higher the wind class, the
lower the projected production costDOEs NEMS
Model considers Class 4 or higher winds needed
7
Wind Power in Michigan

• Only 3 operating wind turbines
• Traverse City- 1 WTG 600 kW
• Mackinaw City- 2 WTG- 1.8 MW
• 48.2 MW planned from 6 projects already
  contracted by CMS but will not be activated until
  Green Power program demand grows.
• High production costs
• Traverse City-- 15.1 average capacity factor
  (6/96-10/02) TCLP Green Rate subscribers pay
  1.58c/kWh premium (25 more) for wind power.
  Actual power output 33 less than projected.
• Mackinaw City Supplies Consumers Power Green
  Power Demand 2,800 MWh in 2002 (18 CF)
  Customers pay 3.2c/kWh premium (46 more) for
  wind power
• Low project capacity factors indicate current
  sites likely have low grade wind resources
• Non-detectable environmental benefit in Michigan
  since wind backs out already very clean, low
  emitting Michigan power generation

8
Traverse City Wind Turbine OutputOutput is
lowest when power demand greatest
9
Wind Power Siting Issues

• Electric Transmission
• Transmission costs high because wind variability
  makes control difficult unpredictable. Wind has
  poor transmission capacity utilization.
• Large Footprint
• Wind has the largest area requirement per unit
  capacity of any power source. DOE estimates
  average 40 acres/turbine (75 acres for newer
  larger design) .
• Need access to WTG for construction and
  maintenance
• Environmental Health Safety
• Aesthetics
• Effects on Local Property Values Few studies
  exist
• Lincoln County WI study found wind property
  values declined by 26 within 1 mile and by 18
  gt 1 mile.
• Assessed values declined significantly for
  property adjoining Mackinaw City WTG after it
  started operation.
• Traverse City adjoining property for sale but
  languishes on market.
• Leased wind property easements often can limit
  owners ability to develop land for gt30 yrs (in
  some cases even if project not built).

10
Wind Siting Issues

• Local ordinances for wind power development
  needed to protect public health safety,
  minimize adverse environmental impacts and
  achieve land use plan
• Noise Address through setting minimum setbacks
  and limits on dBA, dB (for low frequency noise)
  and sound penalties. 45-50 dBA
• Aerodynamic Low frequency, impulsive, broadband
• Mechanical tonal
• Visibility Address through limiting allowable
  sites and setting minimum project setbacks and
  height restrictions. Setbacks can reach gt2500 ft
• Shadow Flicker Address though minimum setbacks
  and/or WTG location
• Safety (blade throw, ice throw, structural
  failure, ground clearance) Use Setback minimum
  clearance requirements
• Wildlife Minimize through eliminating sited
  along/near major bird migration paths, major
  nesting areas and sensitive areas.
• Unsafe inoperable wind energy facilities
  Require bond to cover cost of removal site
  restoration.
• Interference with navigational systems Location
  away from airport flight paths locking
  mechanisms to limit airport radar interference
• Soil erosion Plan to control soil erosion from
  WTG and access roads
• Safety Lighting for aviation
• Non-compliance penalties Must remove facility if
  out-of-compliance