Region takes lead role in wind farms

| Sunday, May 28, 2006

First used to generate electricity more than a century ago, wind power is rapidly moving from a niche product favored by environmentalists to a mainstream, valuable part of the country's power-producing portfolio.

And Pennsylvania has become a wind energy leader, ranking 13th-largest among the 34 states with electricity-producing windmills, and second behind New York east of the Mississippi River.

On a larger scale, the U.S. is ground zero for wind farm development. Installed electric generating capacity from wind jumped 36 percent from 2004 to 2005, to 9,149 megawatts. One megawatt of wind power meets the electricity needs of about 300 homes.

The increase is due to numerous reasons. They include a federal tax credit for production, actions by states like Pennsylvania to mandate that a percentage of in-state power be generated from renewable sources like wind, plus the influx of big companies with big money. Another is the nation's need for more electricity, which is forecast to increase by 1.6 percent per year through the year 2025, according to the Energy Information Administration.

"The enormous rebirth of the wind industry began in the late 1990s, in part because the industry's technology caught up with the wind energy concept," said Ed Zaelke, head of the Renewable Energy Practice at the law firm Morgan Lewis, Los Angeles. Zaelke is president-elect of the wind energy industry's primary trade group, the American Wind Energy Association.

Some experts say wind generating capacity could grow another 50 percent this year. If that happens, the U.S. would surpass Spain as No. 2 in the world in terms of capacity, trailing only Germany for the top spot.

Wind power capacity in the U.S. handles the needs of more than 2.7 million homes. A megawatt of wind power costs between $1.3 million and $1.7 million for construction, meaning roughly $13.7 billion thus far has been spent on this country's windfarms.

Bob and Tomalee Will hadn't a clue why a stranger wanted to erect a tall, spiraling tower on their 300-acre Somerset County farm in 1998. Something about measuring windspeed.

"We had no idea what would come of it," Bob Will said. "I knew nothing about windmills."

More than six years later, the Wills and their neighbors know a great deal about windmills. Together, their land holds one of Pennsylvania's best-known wind farms. Drive east on the Pennsylvania Turnpike, and near the Somerset exit, four of the six windmills on the ridgeline to the right are on Wills' property. Each of the Will's four windmills pays him about $4,000 annually in royalties.

"I think our (Pennsylvania's) leadership in wind energy has been a great boon to us in both investment and in jobs," said Kathleen McGinty, secretary of the state's Department of Environmental Protection. "Alternative energy today is in a different place than a few years ago. With the prices of fossil fuels, the national security issue, alternative energy is not a fad."

Pennsylvania, and particularly Southwestern Pennsylvania, has become a prime site. Four of the state's seven existing windfarms are located in Fayette and Somerset counties.

Colleges, universities and some progressive businesses earlier this decade got involved with wind. Carnegie Mellon University decided 5 percent of its energy needs in 2001 would come from wind. The percentage has since increased to 7 percent.

"Our decision prompted 30 other colleges to make commitments for wind energy," said Dave Dzombak, a professor of civil and environmental engineering at Carnegie Mellon.

Western Pennsylvania's prominence in the wind power industry is a major reason Pittsburgh was selected to host Windpower 2006 Conference & Exhibition, the industry's premiere convention-trade show. Slated for June 4-7 at the David L. Lawrence Convention Center, Downtown, the convention will bring to town some 4,500 attendees from around the world, along with 300 exhibitors, 25 percent more than 2005's convention, said Steve Minor, Windpower 2006's director.

One of the exhibitors is the nation's largest windmill owner-operator. Juno Beach, Fla.-based FPL Energy owns five of Pennsylvania's seven windfarms and nationwide its portfolio includes 46 windfarms in 15 states generating more than 3,000 megawatts of power.

FPL plans by the end of 2007 to add as many as 1,500 megawatts to its wind power portfolio, said spokesman Steve Stengel, and the company is actively scouting ridges and mountains throughout Pennsylvania.

As windpower moves from being a niche product to a mainstream power product that President Bush publicly has said could produce 20 percent of the nation's energy, bigger players have entered the U.S. market.

Spain's Gamesa, one of the four largest wind turbine manufacturers in the world, opened its North American headquarters and East Coast development offices in Philadelphia. It also is constructing four manufacturing plants, including one in Ebensburg, Cambria County, to produce turbine and windmill blades, towers and nacelle assemblies, the enclosures that house a windmill's gearbox, shafts, generator, controller and brake.

Windfarms are capital intensive, with the demand for wind power driving many small developers out of the business. For example, Goldman Sachs acquired Zielka Renewable Energy and Scottish Power's PPM Energy bought Atlantic Renewable Energy Corp. Both acquired firms were involved in the development of many of the region's windfarms.

Spain-based Iberdrola, the world's largest wind power company in terms of installed capacity, with 3,600 megawatts as of March 31, earlier this year acquired Community Energy Inc., a Wayne, Delaware County-based developer. Iberdrola's goal is to reach 10,000 megawatts of primarily wind capacity by 2011.

"One reason for the marriage with Iberdrola was the wind turbine shortage and attendant price increases for the turbines," said Brent Alderfer, Community Energy's president and chief executive. "When you work on a project-by-project basis, you can't compete for equipment."

Alderfer said Iberdrola seriously is considering taking the path of competitor Gamesa by building manufacturing plants in the U.S.

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