Project Development, Wind Power

California Funds Wind Energy Facilities

Wind energy received 93 percent of funding awarded by the California Energy Commission (CEC) in a recent state auction for new renewable energy projects.

WASHINGTON, DC – The “overwhelming showing” underlines the growing economic competitiveness of wind energy in the state, says the American Wind Energy Association (AWEA). The auction under California’s New Renewable Resources Account provided $40 million in incentives to new green power projects. Of the total of 471 megawatts of generating capacity selected, wind projects will receive 439 MW. Each megawatt generates sufficient electricity for 300 homes. “The bottom line from this auction is that for a total extra cost of about $37 million, or a little more than $1 per person, Californians will see enough new wind power plants on line within the next 18 months to meet the daily needs of more than a quarter of a million people,” says AWEA executive director Randall Swisher. “Wind plants can be installed quickly and affordably, they produce no pollution or greenhouse gases, and they will help ease California’s power crisis.” “One of the best things the state could do in its current situation is to find ways to stimulate more wind energy development,” he adds. The major beneficiary of the auction is FPL Energy, the largest wind farm operator in the United States, which received funding for 410 MW in four projects. The $30.1 million in incentives range from 0.26 to 0.76 cents per kilowatt-hour, and the facilities will be commissioned between November of this year and March of 2002. Each project will receive a 10 percent bonus for completion before June of next year. Five other wind projects to be funded will receive an incentive of 0.71 to 1.12¢ / kWh. A number of other wind projects qualified for the incentives of less than 1.5¢, but were not funded because the auction was fully allocated. Another 136 MW of facilities were seeking incentives of 1.36 to 1.45¢ / kWh. “One simple step California could take to bring more wind energy on line quickly would be to provide more money to fund all of the qualifying projects,” says Swisher. The New Renewable Resources Account was established by the state in 1997 as part of California’s utility restructuring. Funding comes from a charge added to the cost of electricity and funds are distributed on competitive bids. The incentive is limited to 1.5¢ / kWh, and funds in each auction are awarded to the lowest bidder. Winners are eligible for the incentives for electricity generated during the first five years after a project is commissioned. The funding established by the original legislation was scheduled to expire in March 2002, but the California legislature recently extended the program for ten additional years. More auctions will be held in future. AWEA was formed in 1974 to represent the U.S. wind energy industry. Its 700 members includes turbine manufacturers, wind project developers, utilities, academicians and individuals from 49 states.