TEXAS CEO Magazine Article

Green Power: Myths & Realities

Posted on 11 December 2011

WHY CEOs NEED TO BE THINKING GREEN ENERGY NOW, NOT LATER

By Mark  Kapner, PE and Virginia Palmer, Ph.D

Mark Twain once said, “It’s not what you don’t know that gets you in trouble. It’s what you DO KNOW for sure that just ain’t so.” This gem seems to apply to the conventional thinking about renewable energy. There are three myths often repeated about wind and solar power that “just ain’t so.”

Myth One: “These sources are always more expensive than conventional methods of generating electric power.”

Fact: The true cost of wind-generated energy became competitive with natural gas-fueled electric power in Texas a decade ago. Utilities that had the foresight to commit to long-term contracts to purchase wind-generated energy have saved tens of millions of dollars by locking in stable electric prices through these “power purchase agreements.” Large commercial, industrial and institutional purchasers of electric power have begun to do the same thing. This is a critical time to make smart power purchase decisions.

As the cost of solar-generated electricity continues to decline, the worldwide market for solar cell panels has doubled every two years for several decades. Within the next five years, solar will be competitive with conventional power in some parts of Texas.

Myth Two: “Wind and solar require enormous land area – we’d have to cover most of our open spaces to generate a significant amount of power.”

Fact: The land area required for modern wind and solar farms, even if they were to furnish most of our electric energy, is a tiny fraction of our available open space. Wind turbines are widely spaced out; the land between them is still available for grazing, hunting, farming and many other land uses. Wind turbine technology has evolved dramatically since the early 1980s; a single modern turbine can power 900 homes or small businesses and generates as much power as 25 of the older units. Solar power systems installed on building rooftops don’t take up any open space. The reality is that the total land area that would be required for solar farms that could meet all of Texas’ peak electric demand is less than two thousandths of the land area of Texas.

Myth Three: “Wind and solar will never contribute significantly to our energy supply because they are not always available when we need them – i.e. they can’t be scheduled like conventional power.”

Fact: Modern electric power systems currently combine the outputs of wind and solar along with conventional power plants. While wind and solar vary in their output, the conventional power plants are operated so as to take up the slack; therefore supply and demand for electricity are kept in perfect balance. Electric systems with significant wind generation (such as Denmark, Spain, Germany, and Texas) are doing this today. In fact, Texas gets over eight percent of its electricity from wind turbines and this will increase to 20 percent over the next five years. During the windiest hours – typically at night – wind farms will furnish well over half the total electric power required by the state and we don’t have to wait for technological breakthroughs in energy storage to continue growing our renewable energy supply.

Timing is Critical

Because of a temporary natural gas supply glut, electric prices in Texas have declined in the last three years. They will certainly move upward again, but no one knows when or by how much. Forward thinking businesses are seeking ways to hedge against the inevitable rising cost of energy.  It’s turned out that locking in a fixed price for electricity through a long-term power purchase agreement with a wind farm is one of the most effective hedging strategies.  The best time to do this is now while electricity prices are relatively low. Some wind developers are offering terms of 15 and 20 years in fixed price power purchase agreements.  (See fig 1.) Depending on wind output and location, wind energy can be locked in near or below today’s conventional energy prices.

Federal tax incentives for wind farms are likely to expire at the end of 2012, thus driving up wind energy prices to increase for wind projects not already started. Customers that lock in wind energy prices by the end of 2011 will benefit from the current tax breaks.

Beyond the Bottom Line

What are other reasons a business should buy green energy?

For companies in international trade, the environmental and climate protection policies  of their customers in Europe and Asia are crucial, and these policies increasingly dictate a company’s vendors buy green energy when available. A low “carbon footprint” will become increasingly important in the future for any company doing business globally. One of the most cost-effective ways to lower a company’s carbon footprint is to obtain a significant portion of power from renewable sources.

A company’s customers and employees will often view the business more favorably when the company commits to purchasing renewable energy. Although this benefit may not seem so obvious, Going Green spotlights a business as a good corporate citizen that looks to the future.

Mark Kapner PE, is an energy consultant and former engineer at Austin Energy. Virginia Palmer, Ph. D., is a leadership and green business consultant based in Austin. www.mvgreenpower.com

Pioneer Sells Wind Farm

Mark and Virginia, MV Green Power, are happy to announce that our former client, Pioneer Green Energy, has sold the 200 MW wind farm that they developed to Pattern Energy.   MV Green Power’s role in this wind project was identifying and contacting Walmart as an ideal power purchaser, then facilitating  the power purchase contract negotiations.
We congratulate all parties and are pleased to be part of such a significant renewable energy project.

Pattern Development Acquires Logan’s Gap Wind Project in Texas

Walmart to purchase majority of power from 200 MW project

SAN FRANCISCO, Aug. 5, 2014 /PRNewswire/ –
Pattern Energy Group LP (“Pattern Development” or the “Company”) today announced it has acquired the Logan’s Gap wind project from Pioneer Green Energy. Logan’s Gap is a 200 megawatt (MW) wind project to be built in Comanche County, Texas. As the developer of the project, Pioneer Green Energy began work of a significant nature in 2013 and executed a 10-year power purchase agreement (PPA) with Wal-Mart Stores, Inc. for approximately 60% of the project’s expected production.
“We are very pleased to be working with Walmart, an icon of American business, which has agreed to buy the majority of the power produced by the Logan’s Gap project for the next decade,” said Mike Garland, CEO of Pattern Development. “America’s leading corporations are increasingly interested in wind energy, recognizing that as the price of wind power continues to decline, it is both good for the environment and good for business.”
Pattern Development expects to arrange financing for and start full construction of the project in the fourth quarter of 2014. The project is located in ERCOT’s North Zone and will connect to Oncor’s 138kV Comanche‐Zephyr line, which crosses the project site and supplies power to the Dallas‐Fort Worth area. The project is expected to begin commercial operation in late 2015.
Andy Bowman, president of Pioneer Green Energy, stated, “Logan’s Gap is a unique asset in the ERCOT market due to its robust wind resource and excellent location in the grid. We are delighted that Pattern Development has acquired the Logan’s Gap project and will carry it forward with their strong team and excellent track record.”
The Logan’s Gap project has been added by affiliate company Pattern Energy Group Inc. (NASDAQ: PEGI) (TSX: PEG) (“Pattern Energy”) to its right of first offer (ROFO) pipeline.

About Pattern Development
Pattern Energy Group LP (Pattern Development) is a leader in developing renewable energy and transmission assets. Pattern Development operates and manages wind power projects through its affiliated public entity, Pattern Energy Group Inc. (Pattern Energy). With a long history in wind energy, Pattern Development’s highly-experienced team has developed, financed and placed into operation more than 3,000 MW of wind power projects. A strong commitment to promoting environmental stewardship drives the Company’s dedication in working closely with communities to create premier renewable energy projects. Pattern Development has offices in San Francisco, San Diego, Houston, New York, and Toronto.