Wind is not only the cleanest source of energy available to humanity, it is also the world’s fastest growing source of electrical power. But the United States has been slow to adopt. A Canadian company is changing that, though – one wind farm at a time.
Western Wind Energy Corp (OTC:WNDEF) is North America’s largest publicly traded pure wind energy producer, currently providing 34 megawatts of wind turbine-generated electricity to the California electrical grid. Right now, it is the only publicly traded company in North America deriving its income exclusively from the sale of electricity generated from wind power.
With the announcement on February 14th of the successful acquisition of a 100 MW wind and solar energy site near Barstow, California, Western Wind has an additional 1,300 MW in its pipeline of expansion sites throughout the state.
The company now has over $1 billion of power sales agreements totaling 155 megawatts from the sale of wind energy electrical generation to two separate utilities.
In the United States during 2007, 5,244 megawatts of generating power was installed by the wind energy industry, breaking all previous records and growing the U.S. national wind generating capacity by 45%.
The new wind projects account for about 30 percent of the entire new power-producing capacity added nationally in 2007, and will power the equivalent of 1.5 million American households annually.
American wind farms will generate an estimated 48 billion kilowatt-hours of wind energy in 2008, just over one percent of U.S. electricity supply, powering the equivalent of over 4.5 million homes.
California is, as might be expected, a leader among states for installed megawatts of wind generated electricity with 2,439 MW of installed capacity, second only to Texas.
Nancy Rader, executive director of the California Wind Energy Association said, “I think that wind could realistically provide 20% of the state’s electricity needs 13 years from now – up from less than 2% today, which would be about 20,000 MW of capacity.”
Western Wind Energy is perfectly positioned to capture a big piece of that evolving capacity for one simple reason: the management team has 24 years of continuous wind installation operating experience – more than any other company within the industry.
The secret to creating profitable wind installations is in the siting of the turbines. Meteorologist Rich Simon, a consultant to Western Wind, has chosen the locations of over 40,000 turbines, or 10,000 MW of generating capacity around the world. He is one of the industry’s few “go-to” guys, responsible for siting 10% of the world’s turbine capacity since 1977.
As wind resource areas vary, so does the cost of generation. A wind farm operating in a 15 mph yearly average wind speed may have total costs of 6.8 cents per kilowatt-hour. That same wind farm, operation in a 20 mph yearly average wind speed, may have total costs of only 4.9 cents per kilowatt-hour.
Like most major forms of electricity generation, wind power is capital intensive. In economic terms, wind power has an extremely low marginal cost and a high proportion of up-front costs. The energy consumption for producing, installing, operating and eventually decommissioning a wind turbine is typically earned back within three months of operation.
At a robust wind location in the state of California, for each one megawatt installed, or US$2 million capital invested, $400,000 is generated annually in energy sales with a further $80,000 in annual federal tax credits (Production Tax Credit or PTC).
The Senate Finance Committee last month included an extension of the expiring tax credits for wind, solar, and other renewable energy technologies as part of its economic stimulus package now working its way through Congress.
Western Wind is not content to remain a “wind-only” company, and recently announced a cooperative agreement with Solon America Corporation to develop 5 to 40 megawatts of photovoltaic – solar energy projects in California and an additional 5 – 40 megawatts of photovoltaic – solar energy projects in Ontario, Canada.
Solon America is the subsidiary of $1.2 billion German solar energy equipment manufacturer Solon A.G.
The company was founded in 1998 by CEO Jeff Ciachurski, who has negotiated more than 200MW of off-take agreements and raised over $50 million to acquire real estate and develop the company's projects.
“To grow Western Wind Energy into a mid-size wind developer and operator with a market capitalization of between US $1 billion and US $4 billion.”
Given the company’s success to date, that doesn’t come across as just a lot of wind.