Wind Generation Technology maturing in North America

- With a strong breeze behind them, wind power advocates say they just need a little stability to make it down the long road ahead.

The Canadian landscape is increasingly dotted with the massive, spinning blades of wind turbines.

By harnessing one of nature's powerful forces, wind power holds much promise for a country looking to avoid pollutants.

"As the country with the longest coastline and the second largest land mass, we have wind resources that are unparalleled," said Robert Hornung, president of the Canadian Wind Energy Association (CanWEA).

But wind is not the answer to all our energy problems. In fact, there is no single answer, experts say.

In the future, energy production will likely become increasingly diversified. A mix of energy sources will be necessary to maintain a reliable power supply, big enough to meet the demands of the nation. Wind, they say, will definitely be an important part of the mix.

But the economics of wind power aren't particularly favourable right now.

Wind power might be clean power — relative to some of the more traditional sources — but it isn't free. Sure, the fuel's there for the taking. But there are substantial up front costs to setting up a wind turbine along with the ongoing costs of maintenance.

According to CanWEA, the costs of generating electricity from wind ranges from 6 to 12 cents per kWh (kilowatt hour) in prime areas.

Right now, Hornung admits, that price is higher than some other forms of energy generation, such as natural gas.

To help offset the difference, the federal government currently offers a tax credit to wind producers, based on the amount of energy generated.

The Wind Power Production Incentive (WIPPI) currently provides 1 cent per kWh to wind turbines that qualify for the program. (That number will decline to 0.8 cents per kWh in April 2006.)

The subsidy will cover 1,000 megawatts of new capacity and will be available to approved wind power generators for the first 10 years of energy production.

The feds also offer tax incentives to wind power producers. They can, for example, write off some of their equipment more rapidly. Feasibility studies can be completely written off, as well.

The federal government has also set a target for renewables: it promised that by next year 20 per cent of their electricity would come from renewable sources.

Several parties made big commitments to wind farms in the recent federal election. The victorious Liberals said they want to quadruple the breadth of WIPPI to target 4,000 megawatts of power.

Even so, CanWEA officials don't think the feds are doing enough. The federal subsidy, they say, is too low.

Hornung said he's happier with provincial government efforts at the moment.

Ontario is one of five provinces in the process of developing a renewable portfolio standard (RPS), which will mandate the minimum amount of energy that an electricity generation company must get from renewable sources.

In January, Energy Minister Dwight Duncan said he hoped to develop 300 megawatts of renewable capacity as soon as possible. Wind power companies are currently bidding for those 300 megawatts.

The request for proposals will close in August 2004. The current initiative is part of the provincial plan to build out the capacity for 1,350 megawatts of power from renewable energy by 2007 and 2,700 by 2010. The latter figure would represent about 10 per cent of the province's energy needs.

"The provinces are now thinking much bigger than the feds," said Hornung. "We really think the ball right now is in the feds' court."

The importance of such government funding is apparent in the U.S. where the money ran out last year. Steve Zwolinski, chief executive officer of GE wind energy, says the "on again, off again" wind energy production tax credit has created an unstable wind power industry, where many companies end up bankrupt.

"There was a very intensive build out until the tax credit ended at the end of 2003 and since then there's been nothing," Zwolinski said. "It's zero."

Christine Real de Azua, assistant director of communications for the American Wind Energy Association, said the tax credit, which was worth 1.8 cents (U.S.) per kWh, has expired three times over the past five years. Each time it expires, all new wind project development stops while the industry waits for a new tax credit to hit the books.

It's still unclear when the tax credit will be reintroduced, but those in the industry say the idea has bi-partisan support and that it will happen eventually.

"The key thing is getting it extended quickly and for the longest duration possible," said Real de Azua.

With any luck, such funding won't be needed forever. Hornung said he expects the economics of wind will change for the better in 10 to 15 years.

"Production costs have declined about 80 per cent in last 20 years and it's still decreasing by 3 per cent per year," he said.

Part of that cost reduction is due to design improvements in the wind turbines themselves. Today's turbines have bigger blades that generate more power, when compared to early versions of the technology.

Hornung expects wind generators will become even more efficient in the years to come.

Once costs are low enough, the subsidies will — hopefully — no longer be necessary and wind power can compete with our energy sources directly.

In the interim there are other hurdles to overcome.

Wind power has been an important source of power in parts of Europe for decades. But in Canada, the wind power industry is in its infancy. With only 341 megawatts of installed capacity here, there's a general lack of precedent when it comes to zoning for wind power projects.

"Most municipalities have yet to deal with wind," Hornung said.

Detailed policies still need to be developed. That means there's often a steep learning curve for local leaders with each new wind project. Creating new regulations for the first time tends to slow everything down.

Most municipalities have yet to determine how far back a wind turbine should be from roads and property lines, for example. That decision can have a significant impact on the size of a wind farm.

"It's not an easy process," said Mike Crawley, president and chief executive officer of AIM Power Generation Corp.

Crawley's company currently has four different wind power projects in development so he's no stranger to the permitting process.

"We've had to spend a lot of time working with municipal councils to educate them on what wind turbines were all about," Crawley said. "You have to be patient."

Connecting to the grid can also prove problematic in Canada today.

"It's a challenge connecting turbines to grid," said Crawley. "Sometimes you're dealing with system operators who aren't necessarily familiar with wind."

Traditional power sources, such as nuclear or natural gas, can provide a stable stream of energy into the grid. Wind turbines, however, only generate power intermittently — when wind conditions are just right. To integrate wind into the mix, system operators have to make sure that the other power sources that feed into the grid can pick up the slack when the wind dies down.

Despite these ongoing problems, there is much hope for the future when it comes to wind. Countries with a long history in wind power, having reached the top of the learning curve, are going like gangbusters on new projects.

"In Germany, 50 megawatts of wind energy is being built every week," said Hornung. "They have already dealt with issues about how to connect to the grid and how costs will be borne."

With long-term subsidies in place, it might be only matter of time before Canada works out its own implementation strategies and becomes another wind powerhouse.