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Wednesday, October 19, 2005

Wind Power Cheaper than Natural Gas

That's right, I'm not making this headline up. It seems that the 29,000 Xcel Energy customers in Colorado who are purhcase their 'Windsource' all-wind electricity mix will actually be paying less - almost $10.00/month less - than Xcel customers who purchase electricity from Xcel's regular energy mix! According to a Denver Post article:

"Higher natural-gas prices are driving this abrupt change in the economics of Xcel's voluntary wind-power purchase plan. ... Residential customers who buy all of their power from the Windsource program will pay about $59 a month for electricity, on average. That compares with conventional customer bills that will spike from $53 to $69 under Xcel's recent rate-hike filing. The savings will be less for those who signed up for partial wind power."

Xcel now expects thousands of its other customers to flock to the Windsource program for purely economic reasons. It may, in fact, run out of wind power. This may force them, according to the Post article, to implement waiting lists for the program as well as consider securing more wind power in their supply mix. It all depends on how long gas prices stay high.

Natural-gas prices have soared right along with gasoline prices at the pump in the wake of Hurricanes Katrina and Rita. Natural-gas prices were already rising while wind prices, which are based on fixed levelized costs - wind power's fuel after all, blowing wind, never gets more expensive - have remained level. Katrina and Rita and the havoc they wrecked on domestic supply of natural gas and crude oil seem to be enough to cause a momentus occasion: the wind power price gap finally closed and then reversed itself ... at least in Colorado and at least temporarily.

There is, of course, no gaurantee how long natural-gas prices will remain at this elevated level. However, in my opinion, this seems to me a potent reminder of things to come. Declining supply (or at least declining easily accesible supply, both will have the same effect) will cause the price of finite fossil fuels, especially petroleum and natural gas, to increase while the price of clean and sustainable technologies like wind and solar will continue to drop. We no longer live in the age when renewable power was a losing venture and it will only be a matter of time before solar - whether it's concentrated dish-stirling or trough collectors or new thin-film photovoltaics - joins wind as a true competitor for traditional fossil fuels.

[Thanks to Treehugger for providing the scoop on this one]

Resources: Denver Post (10/12/2005): "Energy bargain blowing in wind"


The Sanity Inspector said...

There's a good book by a geology professor named Kenneth S. Deffeyes about energy alternatives, Beyond Oil, which deals with the rise of energy alternatives as the petroleum crunch continues.

Roger, Gone Green said...

This is a great article, and timely for the "sales pitch" I've been giving my friends on Green Power.

As a fellow Gemini / Rat (1960)I look forward to reading more.

(As an aside, you might want to put up an email link, such as a special hotmail account; I often will drop a private note to folks I read when I wouldn't always clutter their blog comments. (grin).)