The glacial-but-steady move to renewable-energy sources by Indiana's coal-dominated electric utilities is picking up
speed and could spur demand for locally manufactured power-plant components.
Indianapolis Power & Light late last month issued a request for proposals from developers interested in building a renewable-generation facility for IPL that would increase the utility's capacity for generating electricity by 100 megawatts by the end of 2009. The developer would own and operate the facility under terms of a power-purchase agreement, according to the RFP.
IPL has not defined the type of power generation it's seeking. It could range from wind to biomass to landfill gas to solar--or even hydroelectric.
"It will be interesting to see what we get back" in RFPs, said Crystal Livers-Powers, spokeswoman for the 470,000-customer utility.
IPL, whose coal-fired plants now can generate 3,370 megawatts, said it plans to acquire another 100 megawatts of capacity "at a future date" from renewable sources in the Midwest.
Meanwhile, American Electric Power recently said it plans to purchase power from the Fowler Ridge Wind Farm, a facility in northwestern Indiana that is expected to begin production next year. AEP said the purchase would help it gradually reduce or offset its greenhouse-gas emissions.
And 750,000-customer Duke Energy said it remains on course to buy up to 100 megawatts of wind energy from the state's first utility-scale wind farm in Benton County in spring 2008. California-based Orion Energy LLC last year said the $150 million facility could produce 230 megawatts of power.
Helping drive interest in wind power are increasing costs of environmental compliance for coal plants and new federal wind maps that show Indiana is better positioned to capture wind than previously believed.
Wind patterns in parts of the northern half of the state are sufficient to spin the taller types of wind turbines now on the market. Many of the newer turbines stand more than 260 feet tall, versus about 130 feet for the previous generation.
The maps show especially windy pockets at higher altitudes between northwest Indianapolis and Lafayette, and along the southern shores of Lake Michigan.
"Indiana plays very strong in a robust wind future," said Lawrence Flowers, principal project leader at the National Renewable Energy Laboratory's Wind Technology Center in Golden, Colo.
Currently, the only renewable energy to speak of in Indiana is a handful of generators that burn methane gas from landfills--and "green" energy electric options offered by such utilities as IPL and Duke.
IPL has operated such a program since 1998. It allows customers to ostensibly buy their electricity from a wind farm in Minnesota and from landfill gas generation. The voluntary program costs the average residential customer about $2 more per month. More than 400 customers have signed up--almost double last year's participation. IPL attributes the heightened interest to increased marketing and a new online sign-up option.
Duke Energy introduced its "GoGreen" program last year. It said 1,090 customers had signed up as of this June.
According to a filing Duke made with state regulators, the wind power offset 805 tons of carbon dioxide in the last six months of 2006, "which is the equivalent of removing 134 standard passenger cars from the road for 15,000 miles each of driving."
Only about 1 percent of Duke's GoGreen participants were businesses and other non-residential customers. "[We] expect to see this number increase as we continue to promote the program to create awareness for residential and nonresidential customers," said Duke spokeswoman Angeline Protogere.
While such offerings fall under the renewable-energy umbrella, they have their limits. Neither Duke nor IPL are actually delivering wind-generated power to their customers. Nor is that power offsetting generation at the utilities' Indiana coal plants or reducing pollution here. Rather, the utilities buy renewable-energy credits--a commodity of sorts representing the environmental attributes of the power generated from renewable sources.
Such credits fund the development of renewable projects, which, as Protogere noted, tend to be more expensive than traditional sources of power. "At this time, there are not a lot of renewable projects in Indiana, so sometimes we have to look elsewhere."
Ultimately, "green programs don't get much participation from the public," said Jesse Kharbanda, a policy advocate with the Chicago-based Environmental Law and Policy Center.
A case in point is Austin, Texas, which fancies itself a progressive city. There, however, a green program garnered less than 10 percent of electric customer participation, he said.
"It's not likely this is really going to induce much investment in Indiana," Kharbanda said of certificate-based green programs.
In-state generation lucrative?
But actual renewable projects will encourage investment, said David Menzer, energy policy coordinator at Citizens Action Coalition.
Menzer pointed to data gathered by the National Renewable Energy Laboratory projecting 20,000 to 30,000 new manufacturing-related jobs in Indiana if 20 percent of the state's electricity were produced by wind turbines by 2030.
Some projections have shown that Indiana has the potential to produce 40,000 megawatts of wind-based electricity--more than the state's coal-fired plants now generate.
One advantage enjoyed by Indiana, as opposed to more rural wind states, is an abundance of transmission lines into which turbines can dump their power, and population centers close to where the turbines could be located.
Kharbanda, a leader of the Indiana Coalition for Renewable Energy and Economic Development, points to the potential for Indiana manufacturers to produce components for windmills and other renewable-generation facilities. Wind turbines in Iowa and Minnesota have drawn a handful of specialty manufacturers. For example, German industrial giant Siemens is opening a turbine-blade factory in Fort Madison, Iowa, expected to employ 250 people.
In many cases, turbines favor localized production because of the sheer size of components too costly to ship long distances.
"One blade could be much larger than a normal 18-wheeler. That's the scale we're talking about," Kharbanda said.
Already, in Indiana, ITAMCO Inc., a manufacturer in Plymouth, has started an energy division to explore production of wind and solar components.
Wind "could be a huge economic development opportunity for the state," Menzer said. "We're talking about billions of dollars of investment, of iron in the ground."
That doesn't count the jobs to construct wind farms, rents paid to farmers for land, or taxes paid to local governments. It's one reason groups such as Indiana Farm Bureau and Indiana Corn Grower's Association have testified in support of renewable-energy standards in Indiana.
During the last session of the Indiana Legislature, the House approved a measure that would require Indiana to obtain 10 percent of its energy from renewable generation. But the bill died at the last minute in a committee.
Other states that have enacted renewable-energy standards have attracted investment. Texas, for example, now produces an estimated 3,000 megawatts from wind, versus less than 100 megawatts in 1999, according to Kharbanda's coalition.
Congress, meanwhile, is considering a federal renewable-energy standard. A bill recently passed in the U.S. House would require that 15 percent of the nation's energy come from renewable sources by 2020.
HR 3221 also would establish a national system of trading renewable-energy credits and would permit some of the 15-percent target to be met through energy-efficiency measures.
Coal-generated electricity has a cost advantage in Indiana, though that could soon change with tougher pollution laws and with increased investment in wind.
Generally speaking, "wind is competitive with new coal plants," said Flowers.
Unlike coal plants, he noted, there's no cost for the fuel.