Cost Of Wind-Turned-Coal Power Plant In SD Suddenly Jumps 50%

[hatrack]

The largest power plant in South Dakota history, a proposal already under fire from environmental advocates for using coal instead of wind, would be 50 percent more expensive than previously estimated, according to utility executives. Otter Tail Power Co. officials told Minnesota regulators last week that the price of building the coal-burning Big Stone II plant could reach $1.8 billion, up from $1.2 billion, because of higher costs for labor, steel, pollution control equipment and other factors.

At stake are the first major coal-fired power plant to be built in the region in more than two decades, and the interests of seven electric utilities -- led by Otter Tail Power -- that are partners in the project. Higher costs would mean higher electric bills for customers, but the bigger question is whether the project itself may be delayed or even jeopardized.

Otter Tail senior vice president Ward Uggerud said that even with the higher estimate, the project would be less expensive than producing the same power from renewable energy or natural gas. However, environmental leaders challenge those claims, and have said that the plant will emit too much mercury and other air pollutants, diminish stream flow and water quality in the Minnesota River, and consume land with its high-voltage transmission lines.

South Dakota officials approved two important permits for the power plant recently, one of them specifically against the wishes of the Minnesota Department of Natural Resources. The project still needs permits from Minnesota regulators because it includes about 85 to 125 miles of new or upgraded power lines in the state, depending upon which routes are chosen.

EDIT

http://www.startribune.com/484/story/577279.html

[Deja Q]

1. Isn't coal cheaper than wind?

[Sal Minella]

2. Not when you include the long-term human health damage and

environmental damage (mercury) of continuing to burn coal.

[NNadir]

3. Not if you include the external cost.

The external cost (cost of degraded health and destroyed environment) for coal is 1.60 eurocent/kw-hr and 2.00 eurocent/kw-hr for lignite, according to this reference:

http://www.itas.fzk.de/deu/tadn/tadn013/frbi01a.htm

The mean cost of wind power in Europe as of 2003 was about 5.00 eurocents/kwh (worse case), and the external cost was negligible, 0.04 eurocents/kwh.

In Europe, the use of so called "clean coal" gave generating costs of well over 4 eurocents/kw-hr. Using the best case for the production of coal power, the price is around $5.20/kwh, not really competitive with wind.

http://www.cffopet.net/events/wp1/report%20of%20the%20workshop%20-%20the%20emerging%20market%20of%20clean%20fossil%20fuel%20technologies%20for%20co2%20reduction,%20capture%20and%20sequestration.doc

Actually given the events of the last several weeks, I think maybe the external cost of coal, if anything, has been hugely underestimated.

However wind power does not compete with coal, since the capacity factor of wind plants is about 30% of name plate and the power is intermittent. The intermittent nature of wind power does effect its economics. For instance when Denmark dumps wind energy on the market during periods of low demand, it has to sell the power at reduced prices. This has slowed the expansion of wind power growth in Denmark:

Wind power producers get for installations before 2003 a guaranteed 10 year fixed price of 0,43 DKK/kWh plus extra 0,17 DKK/kWh based on different regulations, mainly full load hour based (e.g. 12.000 full load hour, approx. 5 year for WTGs from 600 kW and up). Finally there was a first round of scrap certificate system (ending 2003), where extra 0,17 DKK/kWh is given based on taking down older smaller WTGs. For WTGs installed after 1.1.2003 only market price + 0,10 DKK/kWh subsidy is paid, with a maximum upper limit of 0,36 DKK/kWh for getting the full 0,10 DKK/kWh (+ eventually the scrap certificate 0,17 DKK/kWh for WTGs installed before 2004). The low price, approximate 0,32 DKK/kWh (4,2 €c/kWh) incl. subsidy, is the main reason for that almost no new WTGs besides the off shore projects with special agreements was installed in 2003 and practically none in 2004. Due to this fact, the Government has now decided a new scrap certificate round (spring 2004), that should start winter 2004. The new round aims at taking down 175 MW up to 450 kW WTGs and building 350 MW new on shore where the subsidy will be extra 0,12 DKK/kWh in 12.000 full load hours. The time period is set to 5 years.

http://www.windenergy-in-the-bsr.net/countries_detail_2.html

http://www.windpower.org/composite-182.htm

Denmark hopes to reduce this problem by better grid integration, but they're not there yet.

Better integration of wind sources with intelligent load leveling should reduce dependence on natural gas, but it will have almost zero effect on the use of coal.

Germany, as I often point out, plans huge expansions in coal since it has decided - in a burst of insanity - to phase out nuclear power.