Renewables Becoming a Major Player in the Region

Renewables Becoming a Major Player in the Region's Power Supply

Sep 25 - Bulletin. Northwest Public Power Association

Energy Northwest has become a regional leader in renewable energy development with wind, solar, and hydro generation throughout their system.

Renewable energy sources - including wind, solar, biomass, and geothermal power - have assumed an important part of the energy portfolios of Northwest utilities.

Why is this not surprising?

Public support for renewable energy is strong and growing. Additionally, and more importantly, there are increasing risks to utility power planners from relying on traditional power plant technologies, or on the power trading market.

Large central station power plants have long been the backbone of the nation's energy supply. Large steam boilers fueled by coal or oil and large hydroelectric dams harnessing the energy of our river systems saw us through the industrialization of the nation. More recently, nuclear power plants were introduced and now provide 20 percent of the nation's power supply. The aftermath of the West Coast power crisis of 2000-2001 saw roughly 63 proposed Northwest plants, primarily natural gas fueled, scrubbed or mothballed. Sticker shock for natural gas prices was a primary stumbling block. Few new coal powered resources have recently been built. Yet if the economy of the region and the nation is to continue to grow, new sources of energy must be found, not to mention replacing existing power plants as they wear out.

The dominant source of electricity in the Northwest is hydroelectric power, which has been the lifeblood of economic development for decades. It provides approximately 66 percent of the region's capacity and 54 percent of its energy for the Northwest, according to the Northwest Power and Conservation Council. In addition to the 58 dams built exclusively for power production, there are 78 multiple purpose projects in the Columbia Basin that include hydropower production. But let's face it: future hydroelectric development will be limited to small, low-impact facilities with limited contribution to our futurex energy needs. Furthermore, there is the possibility that some smaller tributary dams may actually be removed to facilitate fish migration.

Coal powered generation provides almost 15 percent of the Northwest's electric capacity (20 percent of energy), and over half of the nation's electricity supply. Coal is the most plentiful fossil fuel available in the U.S. However, even though the basic cost of generation from a coal plant is one of the lowest available, proposed new coal plants will likely face significant opposition if proposed anywhere close to Northwest population centers. Coal plants built in more remote locations, such as near the coal mines of Montana or Wyoming, would have to overcome high-voltage transmission system constraints and losses in order to move the electricity to the load centers in the Northwest, and would almost certainly be required to make significant capital investments in new and upgraded transmission lines.

Natural gas generation contributes over 13 percent of the Northwest's capacity (20 percent of energy), but in recent times has proved to be subject to extreme fluctuations in fuel price. The nation's existing gas wells are aging, and new exploration is finding resources that are more costly to put into production. Canada, historically a major provider of natural gas to the region and the nation, is using an increasing amount of the resource internally, with exports dropping off. Industry experts expect our future needs to be met by increasing imports of Liquified Natural Gas (LNG) from various foreign sources, and placing Alaskan gas reserves into production. However, none expect the price to drop significantly from today's highs, and it is most likely that prices will continue to be volatile, creating a significant risk that power planners must consider.

Nuclear power is very dependable and produces no greenhouse gases. The Northwest's only nuclear plant, the 1,157-megawatt Columbia Generating Station, has proven to be a reliable source of base-load power for two decades. However, even though public acceptance of nuclear power has increased dramatically according to recent polls, and the solutions to long-term radioactive waste disposal are now political rather than technological, it is likely that it will still be quite a few years before new nuclear power construction will proceed.

Utility planners may to some degree rely on obtaining a portion of their energy supply needs from market purchases. However, relying on the open market has its own risks, as recently evidenced by the market manipulation perpetrated by Enron and other large power trading companies. Additionally, the Bonneville Power Administration has made it clear that they will provide for future load growth only if utilities requesting that expanded service commit to paying the actual cost of the new resource. Therefore the once abundant electric power supply from the Federal Columbia River Power System, which BPA distributes, is now a limited commodity that will not expand to meet the expanding energy needs of the region.

What's left?

Renewable energy.

This option is now viewed as an increasingly important contributor to our long-term energy needs, along with responsible management and utilization of non-renewable resources discussed above. Even though renewables provide only a small fraction of our energy supply today, there is a growing sense that we must increase our use of renewable energy and slowly but steadily supplant our dependence on fossil fuels. Widespread use of wind and other renewable power sources will eventually bring their costs down via economies of scale, making clean energy cost-competitive and more attractive than fossil fuels. Also, most renewable energy options, such as wind, enjoy short siting and construction lead times (2 to 3 years) relative to large thermal power plants (5-8 years), providing utility planners an attractive option when faced with the need for quick responses for load growth. Renewable resources provide a source of diversity to a utility's power portfolio, which is crucial in properly managing risk. Finally, renewable resources such as wind are not subject to the volatility and limitations of a finite fuel market.

Examples of Northwest Public Utilities that have invested in renewable energy resources include:

Klickitat County PUD owns the H. W. Hill Landfill Gas Power Plant, one of the most successful in the nation, producing 10 megawatts of green electricity.

Ferry County PUD has pioneered a unique program offering solar power systems to customers in isolated areas where it costs too much to extend conventional electric lines.

Chelan County PUD promotes renewable energy through SNAP - Sustainable Natural Alternative Power. The utility acts as an intermediary and facilitator, collecting funds from individual and business customers who voluntarily pay a little more on their electric bills each month to support development of additional renewable resources. These customers are essentially purchasing solar and wind power in addition to the utility's hydropower. On the production side, the renewable power hardware is owned and maintained by the individual customers. The utility does not install systems, but provides technical expertise to residents of Chelan County who want to establish solar or wind power generation. Generation from these producers is added to the existing hydropower base and transferred across the utility's electrical grid.

Franklin County PUD sponsors an annual Renewable Energy Expo & Fair to highlight both conservation and alternative sources of energy.

Snohomish County PUD, as part of its Integrated Resource Plan, is actively soliciting customer input in deciding on a range of resources in its long-range planning.

Private utilities also have made solid commitments to renewable energy.

Portland General Electric ranks No. 2 in the nation for renewable power purchased by customers, according to the federal government's National Renewable Energy Laboratory (NREL).

Puget Sound Energy has established a goal of renewable energy as a 10-percent share of the utility's electric supply mix by 2013.

Recently, the American Wind Energy Association (AWEA) announced that PacifiCorp would receive its 2004 Utility Leadership Award. PacifiCorp, which serves customers in six Western states as Pacific Power and Utah Power, has emerged as a national leader in making a business case for wind energy.

Fortunately, non-polluting sources of energy enjoy solid ratepayer support. A recent public opinion poll conducted by Opinion Dynamics Corporation found 93 percent of Washingtonians support renewable energy. When offered the option of having a small portion of their monthly electricity supplied by renewable sources, Northwest ratepayers support such initiatives, depending on the efficacy of the marketing effort.

Grays Harbor County PUD, for instance, introduced its Green Power Program in 2001 and has enjoyed solid support. Clark Public Utilities supports customer choice, in partnership with the Bonneville Environmental Foundation, with the "Green Lights" program.

In Oregon, the Eugene Water & Electric Board's successful EWEB Windpower Program offers ratepayers the choice of 10, 25, 50 or 100 percent of the cost of electrical service originating from wind power.

As utilities plan to meet the growing demand, the region will need "homegrown" e\nergy projects.

Energy Northwest, in answer to growing public power interest in renewable energy, continues to develop viable options for Northwest public utilities to jointly participate in renewable power project development. Working with our public power partners, we have developed the 64-megawatt Nine Canyon Wind Project and the 35- kilowatt White Bluffs Solar Station. We are monitoring emerging fuel cell technology for distributed generation applications, and keeping an eye on some ocean wave devices for potential commercial application. We are working hard to bring a promising biomass technology into commercial production. We are also exploring several very promising wind sites around the region that will be available for rapid deployment of additional wind resources. This year the Packwood Eake Hydroelectric Project that earned a "green" label as a low-impact hydroelectric facility celebrates its 40th anniversary of producing environmentally friendly power.

Renewable resource projects provide local jobs, lease payments to farmers on whose land wind turbines are placed, and property tax revenues to rural communities. They protect the environment for present and future generations. The many advantages are not lost on those who develop public policy in the Northwest, regardless of political affiliation.

Oregon Governor Ted Kulongoski said in 2003, "We can make Oregon the national leader in renewable energy and renewable product manufacturing ... Development of renewable energy will lessen our reliance on fossil fuels, protect Oregon's clean air and create jobs."

In support of this policy, state agencies are developing the Oregon Renewable Energy Action Plan.

Idaho Governor Dirk Kempthorne, in proclaiming October 10, 2003, as Idaho Renewable Energy Awareness Day, said "...the integration of renewable energy sources into Idaho's energy portfolio is a logical continuation of Idaho's commitment to environmentally sound energy development and a coordinated partnership with a major national movement toward a sustainablc energy future."

Washington Governor Gary Locke said in 2001, "I see the development of clean energy sources as something that will be market- driven. It is no longer the least bit exotic to think of wind and biomass as anything other than two more important energy sources. These sources are essential and they will be developed."

Support for increasing use of renewable energy is virtually universal. Cost is no longer the show-stopper it once was. Even the unsubsidized price of wind power is now approximately what it would be for power from a new natural gas power plant.

The business and industrial sectors increasingly look to renewable energy sources to demonstrate good corporate citizenship. Renewable Northwest Project tracks organizations that commit to using energy from renewable sources and this list is rapidly growing, as a visit to the RNP Web site will attest. As Rachel Shimshak, director of Renewable Northwest Project, wrote recently, "We have a golden opportunity in the Northwest to help rebuild our economy, diversify our energy supply, and preserve our treasured quality of life. How can we do this? By meeting our growing energy needs with our abundant, indigenous, clean, renewable energy resources such as wind and solar."

For all these reasons and more, renewable energy is a perfect fit for public power to provide an increasingly important share of its customers' needs.

Gary K. Miller is a communications specialist at Energy Northwest in Richland, Wash. He can be reached by e-mail at GKMlLLER@energy-northwest.com .