The alternative energy industry is growing rapidly worldwide, but coal is still king in the United States.
Solar and wind power are growing at rate of about 30 percent each year. Traditional “big oil” companies, such as BP, are investing in wind turbine plants and solar photovoltaic cells are in widespread use around the country, according to the National Renewable Energy Laboratory in Golden.
“Wind and solar are about moving neck and neck,” said George Douglas, NREL spokesman. “But they are two separate markets: solar is better for direct-to-the-consumer use — putting the PV cells on homes, for example. Wind energy is really good at generating electricity at a level utilities use.”
Utilities and alternative energy
Many utility companies in Colorado are focused on wind power because Amendment 37, passed in 2006, requires utility companies to generate 20 percent of their energy from renewable sources.
Xcell Energy, the state’s largest utility company, is building wind farms, Douglas said. It also is investing in solar power, by building a solar-generated power plant in the San Luis Valley.
“Colorado is a great state for both solar and wind, we have a lot of both,” Douglas said. “The Xcel Energy power plant will generate 8 megawatts of utilities, and it creates a buy-down program if individuals put solar panels on their home.”
The plant will be one of the largest solar facilities in the nation, with the average capacity to fuel 8,000 homes.
Colorado Springs Utilities has a similar rebate program, and spokeswoman Rachel Beck said that a few businesses have taken advantage of it. But CSU relies on hydro power to meet Amendment 37 requirements — a way of generating power that’s been used for more than 100 years.
“We also buy 1 megawatt of wind power from a company near the Wyoming border,” she said. “We’re working on a 20-year plan for power generation, and I imagine it will include more wind power purchasing.”
CSU considered building wind turbines on property it owns near Fountain, Beck said, but preliminary study results show that the wind in that area is not strong enough to generate power.
Douglas said that technological issues continue to make alternative energy sources more expensive than coal for electricity generation.
“The technology isn’t mature yet,” he said. “There are advances that need to be made in the science and engineering realm. Think what a computer was 20 years ago, and what a computer is today — that’s what where we need to be. It needs to get to a point where it can be integrated easily into people’s lives. It’s happening quickly.”
The cost of wind power has been declining steadily. The estimated cost of wind energy at large sites is less than 5 cents a kilowatt hour, not including the federal production tax credit, which applies to the first 10 years a wind plant is in operation. Coal-fired power plants — already in operation — produce energy at a cost of about 5.5 cents a kilowatt hour.
However, the cost of wind energy is affected by the average wind speed and the size of the wind farm. Small differences in average wind speeds can mean large differences in price, according to the American Wind Energy Association.
The cost of capital also is reflected in the cost of the energy — making the economics for wind energy extremely sensitive to changes in interest rates charged on capital expenses.
Wind power today costs only about one-fifth as much as it did during the mid-1980s, and its cost is expected to decline another 40 percent during the next few years.
Solar power, on the other hand, remains fairly expensive to produce.
Conventional electricity ranges between 5 to18 cents per kilowatt hour — depending on where it’s generated. The Energy Information Agency says the price is below 10 cents a kilowatt hour. Solar thermal energy costs between 15 and 17 cents a kilowatt hour, according to statistics from Schott, a German company that makes solar thermal equipment.
But the main challenge lies in technology, Douglas said. The lab is working on ways to produce and store the energy on cloudy or calm days.
“Another challenge is to change the way we think about how we get electricity,” he said. “Currently, utilities get power to homes and businesses using wires to connect them. But with solar, we might not need those wires. Some can be on top of the building and there’s no need to buy it or be on electric grid.”
Europe is far ahead of the United States in using solar and wind energy. BP has wind turbines in Germany and the Netherlands, but only recently began construction on wind farms in the United States, including one in Weld County which will eventually generate enough power for 120,000 homes.
When completed, the wind turbines in Weld County will produce more than 300 megawatts of power. BP’s other plants in California, North Dakota and Texas will produce an additional 250 megawatts of power.
“Most of the EU has been focused on alternative sources for years,” Douglas said. “They’re ahead of us in use, particularly in solar and wind power,” he said. “The EU countries have incentives in place to use those energies. But in technical developments, I’d say the U.S. still has an edge. Not as great an edge as we did 20 years ago. The EU partnership has a lot going on with ‘green’ energy.”
Coal still king
But coal-fired power plants will be around for decades, despite the growth in the alternative energy markets, Douglas said.
“We have a lot tied up in coal fired plants, which have an average life of 30 years,” he said. “I don’t see utilities shutting down those plants, since coal is so inexpensive. Electricity generation will still need coal as a base for power.”
Coal costs less because in many cases, the capital expenses were made years ago, unlike new technology. In Colorado, vast coal deposits in nearby Wyoming make the fossil-fuel very attractive.
The rapid growth in the solar and wind power fields is being fueled by the need for new sources of electricity. During the last 50 years, demand for electricity has doubled, and experts expect demand to double again during the next 50 years.
“That’s where the new power sources come in,” Douglas said. “Coal fired isn’t the way to go for new demand — instead we can use solar or wind energy. But if carbon sequestration occurs, or if it gets more expensive to use coal, then it could speed up the use of these new resources.”