Wind Power Economics

In the comments of my previous post on Manitoba Wind Farms, David Billington asked,

” It would be interesting to know the economics of wind energy compared to fossil fuels as a source of electric power.”

Indeed it would.

And as if it were simply meant to be… out came a very timely article.

It’s about the village of Inukjuak which is in Northern Quebec. Reliance on diesel generators is a huge problem and expense in the Canadian North (and I would think in Alaska as well).

Within five years, the community (of 1100) of Inukjuak will use its water and wind to produce heat and light and end its dependence on diesel fuel to generate electrical power.

That is a very ambitious goal indeed… but the environmental and economic impact are clear. They will be using a combination of hydro and wind power to generate their enough electricity for their 1100 residents, with enough to spare for 1500 more households.

A wind-monitoring tower has already been tracking Inukjuak’s powerful winds since 2004. According to Hydro-Québec, the potential for energy-production is “interesting.”

The turbines could be churning out power within five years at a cost of $28 million. Studies show that it will return this investment at a rate of about 30 per cent a year — so the hydro-electric project will be able to pay for itself within its first five years.

… experts say 80 per cent of coastal communities in the Arctic have a similarly good potential for the production of wind energy.

Apparently, Hydro Quebec sees enough potential in Wind Energy that it “is considering spinning off all its wind power projects in Quebec into a stand-alone subsidiary”.

There is a tell-tale caveat in their business plan on using wind generation in the North that might deter companies from developing wind power in the North to energize Southern Canada. (emphasis added)

Hydro-Québec spokesperson Mathieu Boucher said studies show it’s too expensive to link Nunavik to the main power grid, so independent power production is the way to go.

I think it is very telling that the most active regions in North America in terms of developing new wind projects… happen to be in Northern, Sub Arctic or Arctic environments. The very regions that also show the greatest effect from global climate change.

Take this initiative back in 2000, in Western Alaska.

In Toksook Bay, the three turbines currently being installed are designed to produce around 675,000 kWh annually, which would replace about 32% of the power normally produced by the diesel generators. This amounts to a reduction in diesel fuel consumption of about 52,000 gallons a year. With conservative fuel price estimates of $1.84 per gallon, the three turbines could save AVEC approximately $100,000 in annual energy costs.

I’m betting diesel costs a fair bit more as of March 2006. How good does that investment in renewable energy look now?

It seems that wind turbines can and are regularly “hardened” to face the extreme cold of the arctic.

Manitoba Power has an excellent study (PDF) detailing the issues and solutions.

Whether the wind farm is not producing electricity because of exceeding the minimum temperature limit (-40C) or because of low wind speeds especially during cold temperatures, an external station service electrical supply is required for the wind farm. It is estimated that for the 99MW St. Leon Project, the wind facility would require 1 to 3 MW of station service supply from the Manitoba Hydro system during periods of low temperature when it is not operating.

At low temperatures, the air is denser and thus for the same wind speed more electricity can be generated by wind turbines. But this higher air density benefit is not sufficient to offset the lower wind speeds that tend to occur at low temperatures.

Despite the considerations necessary with respect to cold weather operation, Manitoba Hydro plans to develop or purchase 250MW of wind generation in Manitoba in the next 5-10 years.

The Manitoba Power paper references two excellent resources for more information on Wind Energy in cold climates.

#1: Is the International Energy Association Wind Energy in Cold Climates portal. A ton of information there about projects going on in cold regions around the world.

#2: Is Yukon Energys’ website. The Territorial energy supplier.

Sorry David, I didn’t get deep into the economics… got a little side tracked… but it’s a start. There looks to be a ton of this stuff going on on a small community level. The question is… does it scale well?