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Wind Power– Can it make sense in Michigan ?

Wind Power– Can it make sense in Michigan ? . Tom Hewson Energy Ventures Analysis Inc Arlington Virginia Hewson@evainc.com March 2003. Michigan Wind Power Overview.

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Wind Power– Can it make sense in Michigan ?

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  1. Wind Power– Can it make sense in Michigan ? Tom Hewson Energy Ventures Analysis Inc Arlington Virginia Hewson@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 Michigan’s 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 (>Class 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 costDOE’s 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 % > 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 owner’s ability to develop land for >30 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 >2500 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

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