Avista Utilities expects to reach an agreement soon to tie up a site to build its first wind-turbine farm and also has released generating-capacity and cost figures for the planned facility.


The Spokane company says in its recent annual report that it expects to construct the 50-megawatt wind-generation facility in 2010 or 2011 at an estimated cost of about $120 million.


We are close to completing the acquisition of a wind-generation site, it says.


Steve Silkworth, the companys wholesale power manager, says, We have not financially closed on a deal yet. It might be a month or two, or perhaps longer, before an agreement is completed. Silkworth says that to avoid harming negotiations, the company isnt divulging the location of the site for now.


At $120 million, the price tag of the proposed wind-turbine farm would be a big capital investment for the company, which has estimated the capital costs for its utility system at $200 million in 2008 and the same amount again in 2009. Neither of those estimates includes the projected cost of the wind-generation facility.


The cost of developing wind facilities has shot up by more than half since 2005, and because some of the equipment is made in Europe, the euros rise against the U.S. dollar adds cost pressures, Silkworth says.


The euro hit a new high compared to the dollar today, he said on April 22, and he added that other parts for wind turbines come from all over the world, which also can add costs because of the dollars weakness against other currencies. Silkworth says a U.S. manufacturer is planning to enter the wind-turbine market.


Cost issues aside, Avista has no choice but to add new renewable sources of electricity to its portfolio. Initiative 937, approved by Washington voters in 2006, requires utilities to acquire new renewable energy resources or to buy so-called renewable energy credits from others so that they supply at least 15 percent of their retail load with renewable energy in 2020. I-937 requires utilities to meet biennial conservation targets beginning in 2012, and because wind-turbine farms take only about six months to build after construction begins, Avista doesnt have to erect its wind turbines right away, Silkworth says.


Our needs dont really start until 2012; so, were not thinking of building this thing for a few years, he says.


Nonetheless, wind turbines are in high demand around the world, and Avista will have to order and make down payments on its turbines soon if it is to complete its project by 2012, Silkworth says. He says that even if the machines were ordered today, they wouldnt be available for delivery until three years from now.


Ive talked with three wind developers and two turbine manufacturers and a consulting firm, and 2010 turbines are about gone; you cant buy them, Silkworth says. 2011 turbines are available, but theyre in high demand.


Twenty-five to 35 of the long-bladed wind turbines would be erected in Avistas project, depending on which manufacturer supplies the equipment, Silkworth says. He says the turbines generate between 1.5 megawatts and 2.5 megawatts of electricity apiece, depending on who makes them. One megawatt of power meets the needs of about 750 homes.


Dozens of wind-turbine farms have been developed in the U.S. in recent years, and thousands of turbines have been erected, as the nation seeks to increase electricity supplies while minimizing the emission of greenhouse gases into the atmosphere.


The boom in wind-farm development should yield increased knowledge on how to maximize kilowatts from wind turbines, which are expected to generate power only about a third of the time because of the winds variability. Yet, Silkworth says, wind-farm owners are tight-lipped about any knowledge they gain on how to operate wind turbines more efficiently.


The owners keep that to themselves, he says. They do have wind droughts. If we have a good hydro year, they have a good year. Theres lots of storms. Most wind plants around here are storm driven. By storms, he says, he means winds that accompany changes in weather.


Though Avista would act as its own construction manager on the project, it would contract out the building of its wind farm to a vendor that has expertise in developing such projects, Silkworth says. One reason is that the company doesnt have some of the specialized equipmentsuch as the type of crane that would be needed to affix the turbines long blades to their towers.


A crane takes 30 semi-trucks to bring it in, Silkworth says.


While Avista hasnt closed on an agreement to tie up its site yet, its doing other work on the project.


The turbine layout is being developed right now, Silkworth says. Its being done by a meteorologist whos schooled in wind-farm layout, he says. Wind-turbine farms, he adds, need to be laid out correctly on a site to take maximum advantage of the wind.


Avistas wind-power project fits well on its proposed site, but the property doesnt have much room for expansion, he says.


Its probably right-sized, meaning that theres a certain topography that makes it work, Silkworth says.


Still, Avista is looking at other sites in or near its service territory and close to a transmission line to hold down the cost of transmitting power. It wants to use our lines that serve our load to avoid having to pay for transmission, so a site near its lines can be not as good as another site, but still be better, he says.


The project would be just a start on the companys road to satisfy I-937. Its most recent Integrated Resource Plan, which it filed with state regulators in September, outlined a preferred strategy that included adding 300 megawatts of supply from wind generation, 87 megawatts from conservation, 38 megawatts from hydropower plant upgrades, 35 megawatts of other renewal resources, and 350 megawatts of natural gas-fired generation, all by the year 2017. In response to changes in the law, Avista dropped coal as a source of new generation.


The I-937 mandate, however, requires that utilities meet targets in terms of average load served, rather than merely adding a certain amount of either new renewable generating capacity or renewable energy credits. Avistas requirements range from supplying 21.3 average megawatts with new renewable energy sources or credits in 2012, or 3 percent of its projected load in Washington state, to 124.5 average megawatts in 2020, or 15 percent of its projected Washington load.


At $2.5 million a megawatt, Avistas planned wind-power plant isnt cheap, but still would be near midrange on a list the company provided of power plants announced or completed around the world in recent years. Solar plants ranged from $6 million to $7.5 million a megawatt. A pair of tidal wave plants cost $6.4 million a megawatt and $7.4 million a megawatt, respectively. A coal-fired plant thats to be completed in Nevada in 2011 is projected to cost just under $2.5 million a megawatt, and one thats to be completed in Florida in 2010 is expected to cost $1.95 million a megawatt.


Of course, costs can vary depending on where plants are built. A 400-megawatt wind plant thats to be completed in Jilin Province in China this year will cost $1.33 million a megawatt.


Even though wind-turbine farms arent cheap, other kinds of generating plants also are more expensive now than they once were, Silkworth says. Everything has gone up, he says. Concrete has gone up. Steel has gone up.


At least, he says, with wind the fuel is free, while the price of natural gas, which is burned to fire many modern generating plants, is volatile, Silkworth says.


Contact Richard Ripley at (509) 344-1261 or via e-mail at [email protected].