Another major theme of the workshop was the effect that high natural gas prices are having on the wind power market. In general, the high fossil-fuel prices will be very good for the wind power market, most agreed, as utilities and investors that want to limit their fuel-price risk start looking for other energy technologies that can be built quickly. However, that interest is making project development more difficult in some ways, as well. As utilities try to define power output from a wind project more and more precisely, they are tending to make power purchase agreement terms more onerous -- too limiting in some cases to make the project viable.In other words, a wind facility is only attractive to investors if it is not actually expected to produce useful electricity!
In light of that fact, investors and developers are starting to look toward merchant wind plants -- those built without a long-term supply contract. In some markets, especially those with high renewable energy credit prices and predominant use of natural gas for electricity, merchant plants look as though they may be more profitable than those with supply contracts locked in. However, with the exception of a few cases, there has been little action on the merchant plant front yet.
categories: wind power, wind energy, wind farms
