Indianapolis wind power contract canceled

In a statement made last Friday by EDF Energies Nouvelles (French Green Power Company), a power purchase agreement was terminated without explanation by Indianapolis Power and Light Company regarding the supply of wind energy by enXco,  a local EDF company. The contract was unilaterally terminated by IPL, and more than 10 days later, EDF has acknowledged it to the market.

The IPL wind power project web page is here

From the press release see here

======================

PRESS RELEASE

March 12th, 2010

Termination of the Lakefield PPA by IPL

On March 1, enXco, the US subsidiary of EDF Energies Nouvelles, received notification that the US utility Indianapolis Power and Light Company (IPL) would terminate the power purchase agreement related to the 201 MW Lakefield wind project currently under development (southwestern Minnesota).

The project received the approval of the Indiana Utility Regulatory Commission (IURC) on January 27, 2010. The IURC’s order was consistent with similar past orders. IPL has purported to unilaterally terminate the power purchase agreement on the basis of this order without providing further specific reasons.

enXco is considering its rights and remedies within the framework of the PPA. In addition, the Company is currently analyzing several options, including re-marketing the project to one or several other utilities.

Consistent with EDF Energies Nouvelles policy, construction has not yet started.

The 2012 operational objective of 4,200 MW net and 2010 objective of EBITDA will not be impacted by the Lakefield project evolution.

================

big h/t to Ecotretas

Page 1

PRESS RELEASE PRESS RELEASE
Paris, March 12, 2010 Paris, March 12, 2010
Termination of the PPA by Lakefield IPL Termination of the Lakefield PPA by IPL
On March 1, enXco, the U.S. subsidiary of EDF Energies Nouvelles, received On March 1, enXco, the US subsidiary of EDF Energies Nouvelles, received
notification that the U.S. utility Indianapolis Power and Light Company (IPL) notification that the US utility Indianapolis Power and Light Company (IPL)
would terminate the power purchase agreement related to the 201 MW would terminate the power purchase agreement related to the 201 MW
Lakefield wind project currently under development (southwestern Lakefield wind project currently under development (southwestern
Minnesota). Minnesota).
The project received the approval of the Indiana Utility Regulatory The project received the approval of the Indiana Utility Regulatory
Commission (iurc) on January 27, 2010. Commission (IURC) on January 27, 2010. The iurc’s order was consistent The IURC’s order was consistent
with similar past orders. with similar past orders. IPL has purported to unilaterally terminate the IPL has purported to unilaterally terminate the
power purchase agreement on the basis of this order without providing power purchase agreement on the basis of this order without providing
further specific reasons. further specific reasons.
enXco is considering its rights and remedies within the framework of the enXco is considering its rights and remedies within the framework of the
PPA. PPA. In addition, the Company is currently analyzing several options, In addition, the Company is currently analyzing several options,
including re-marketing the project to one or several other utilities. including re-marketing the project to one or several other utilities.
Consistent with EDF Energies Nouvelles policy, construction has not yet Consistent with EDF Energies Nouvelles policy, construction has not yet
started. started.
The 2012 operational objective of 4.200 MW and 2010 net objective of The 2012 operational objective of 4,200 MW net and 2010 objective of
EBITDA will not be impacted by the project Lakefield evolution. EBITDA will not be impacted by the Lakefield project evolution.
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262 Comments
Danzaroni
March 15, 2010 10:47 pm

I believe our future lies in harnessing the millions of degrees of heat from the center of the earth to power steam turbines that will…

George Turner
March 15, 2010 10:57 pm

Wouldn’t it make more economic sense to try and generate power with the waste heat from Al Gore’s mansion?
If you put a tent-like structure over it with the top leading to a chimney and the sides open, the airflow could drive a small turbine.
Another idea is to put smaller, less-invasive windmills at the ends of airports, gathering power from the exhaust of jetliners bound for climate meetings as they start their take-off runs.
Every little bit helps.

PiperPaul
March 15, 2010 11:25 pm

A lot of this nonsense can be explained by baby-boomers.
As a certain demographic expands, it self-creates jobs for those who exist within that demographic. Logically, the more “executives” there are, the more likely idiots will eventually fulfill and attain positions of power.
Observe corporate America as an example: How many “vice presidents (of whatever)” are there now compared to 30 years ago?
Observe movie-making, where now there seems to be producers, assistant producers, co-producers, co-executive producers, associate producers, etc.
Need I mention “directors”?

March 15, 2010 11:42 pm

heresy101 (21:20:18)
Thanks for an insight into the real world. All this alarmism about wind energy is disturbing, coming from a bunch of sceptics who should know better.
I know more than I want to about the subject as my step-father was chairmain of the BWEA (British) and set up the EWEA (European), so I know it is a practical solution. It is marginally cheaper than nuclear I understand, and there are ways to handle the load balancing. Solar seems poor in comparison yet.
The large cost, as some have mentioned, is mitigated by very low maintenance costs. The main cost of wind is the interest on the finance for building it, effectively. The cost therefore depends on the interest rate, oddly enough.
I am not going to get involved in an argument, however, as I am sure there are many far more opinionated and learned than myself.

March 15, 2010 11:46 pm

Mark (18:11:49) :
Maybe this is part of the reason why?…
Wind farms could raise temperatures
***************************************
Think this one through…
The ‘drag’ of a wind turbine unavoidably must remove a certain anount of wind force. Only a percentage (Possibly rather small) of this will be converted into electricity. The remainder turns into—-heat, which increases temperature!
Geoff Alder

March 15, 2010 11:57 pm

The project received the approval of the Indiana Utility Regulatory Commission (IURC) on January 27, 2010.
So far, so good — next sentence, please.
The IURC’s order was consistent with similar past orders. IPL has purported to unilaterally terminate the power purchase agreement on the basis of this order without providing further specific reasons.
A permit to begin construction is not an order, and no company would terminate an agreement with another based on a permit to begin construction.
Something is missing from this equation…

PhilW
March 16, 2010 12:12 am

Conference over claims wind farms are health risk.
http://news.bbc.co.uk/1/hi/wales/8481873.stm

Erik
March 16, 2010 12:16 am

From the Danish Think Tank Cepos, Wind Energy, the Case of Denmark:
http://www.cepos.dk/fileadmin/user_upload/Arkiv/PDF/Wind_energy_-_the_case_of_Denmark.pdf

brc
March 16, 2010 12:35 am

I was just thinking the other day – I wonder what is the best way to short the global warming industry. Perhaps a combination of short green power companies, short carbon trading invested companies (invesment banks, maybe?) and go long coal and uranium companies. Maybe even look at a couple of shorts for news organizations heavily invested in the green space selling advertising to greenwashing companies.

bill hughes
March 16, 2010 12:36 am

when my company started publishing Wind Engineering (journal on the technological aspects of wind power) in 1977, long before ‘green’ was fashionable, the Central Electricty Generating Board scoffed that wind could never make a serious contribution to national power needs.Quite right. No one then was claiming that. Then, correctly, the focus was on renewables as site specific -if you live on a windy Welsh hillside you’d be crazy not to have a turbine, just as if you’ve got a 1000 unit pig farm you’re crazy not to have an anaerobic digester to turn poo into power. And over 30 years later it seems to me still that renewables offer excellent local solutions but the idea that they can play a significant national role is fanciful – unless of course its politically expedient to adopt a ‘solution’ which is less efficient and more expensive than alterntives. The best policy option would be a national solution by default, by encouraging thousands of tiny local solutions. But serious progrss in battery technology is needed for that to move forward.

March 16, 2010 12:43 am

“Green ” energy? There is nothing greener than chlorophyll, which is composed of 75% carbon.

DirkH
March 16, 2010 12:52 am

“JER0ME (23:42:38) :
[…]
is a practical solution. It is marginally cheaper than nuclear I understand, and there are ways to handle the load balancing. Solar seems poor in comparison yet.”
The only way i know of is pumped storage energy. Are there others?
“I am not going to get involved in an argument, however, as I am sure there are many far more opinionated and learned than myself.”
This makes your argument (or the hint at an argument) look very weak.

DirkH
March 16, 2010 12:55 am

DirkH (00:52:01) :
“The only way i know of is pumped storage energy. Are there others?”
Oh i forgot, the other is to build so many gas powered stations that their peak performance equals the peak performance of wind power and letting them run constantly (idling when the wind blows and under full power when it doesn’t). JEROME, we already knew that. Still other solutions?

March 16, 2010 1:06 am

Juraj V. (00:43:29) :
“Green ” energy? There is nothing greener than chlorophyll, which is composed of 75% carbon.
If you are my age, you might remeber the famous toothpaste commercial comment
”How reeks the goat on yonder hill
Who feeds all day on chlorophyll”

Gary Prince
March 16, 2010 1:19 am

As an englishman living in Copenhagen I would like to see the real price of Wind energy (including all subsidies) made public in Denmark.
That said, the fact that there is alternative energy sources (wind and water) should be seen as a positive element of any countries energy production.
If one assumes the Danes know and accept the cost of the alternative energy, then having it is a GOOD thing IMHO. Especially with oil prices on the way through the roof.

March 16, 2010 1:34 am

In U.S., Many Environmental Issues at 20-Year-Low Concern
Worry about all eight measures tested is down from last year
by Jeffrey M. Jones

PRINCETON, NJ — Americans are less worried about each of eight specific environmental problems than they were a year ago, and on all but global warming and maintenance of the nation’s fresh water supply, concern is the lowest Gallup has measured.
http://www.gallup.com/poll/126716/Environmental-Issues-Year-Low-Concern.aspx
The truth is now out, the global warming scandal has not only discredited those who deserve to be discredited: Climate forecasters, but the effects have spread out to other and real environmental problems. In the end all this evil lying campaign plugging planetry disaster to get environmental issues in the news is going to do is to make the public less interested in helping the environment, totally predictable and there are other things far too important to let the rubbish on global warming get in the way!

Hans Henrik Hansen
March 16, 2010 2:04 am

Here is an interesting, recent report on Danish experience with wind energy:
http://www.cepos.dk/fileadmin/user_upload/Arkiv/PDF/Wind_energy_-_the_case_of_Denmark.pdf
The report has been strongly criticized by the Danish wind turbine industry and political proponents for ‘renewable energy’ {almost came under accusation of treason! :)} – but in my judgment it paints a pretty realistic picture.
Here is an older one on same subject:
http://www.ecolo.org/documents/documents_in_english/wind-Danish-Lessons-03.pdf

JustPassing
March 16, 2010 2:09 am

From what I read and saw few months ago, China is keeping a firm hold on rare earth materials for its own uses and strickly limiting supplies to the rest of the world.
Interesting vid. “You buy a Prius hybrid car and think you’re saving the planet.”

March 16, 2010 2:15 am

I´m not in line with these alarmism theories but anyway someone has to keep an eye on the environment.

Troels Halken
March 16, 2010 2:29 am

As a wind energy professional (from Denmark), I am quite intrigued to read through the argument in this tread. Most arguments are not based on real knowledge of wind energy, on updated information or knowledge of how the electricity grid work.
Wind energy is not THE SOLUTION to become independent of gas and oil, but it can be part of such a solution.
Another thing to keep in mind is that no grid operator converts electricity production til 100% wind power over night.
heresy101 (21:20:18) has a good and informative post.
JimInIndy (21:44:14). The amount of steel used for a turbine varies with manufacturer, tower height and most importantly nominal effect. I’d say that 250 tones is about 1,5-2MW turbine. Steel in itself is a material and does not have a carbon footprint, so you first question is not valid. The second question is, because here we’re dealing whit how much energy it takes to produce the machine (and the steel and other materials that goes into such a thing). Depending on the site, between 3-8 months to generate as much energy as went into building it.
An argument often heard is that it generates energy as the wind blows. That is of cause correct, but large operators have found out that if they know how much energy their turbines produces just a day in advance, they can sell the energy for a higher price. Hence they operate with wind forecasts, and these are about 90-95% reliable (predicting wind speed is a lot easier than to predict weather as a whole).
But what to do when the wind does not blow? Obviously there are several ways to get around this. A small amount of hydropower can regulate a lot of windpower or provide intermittent power until conventional plants start up. Conventional power plants with short startup time and where the cost of fuel is the major part of the price plays well with wind power, such as gas turbines. Nuclear has very low fuel costs and high investment costs as with wind power, hence if these dominate the production mix, they do not play that well together. Lastly transmission grids with higher capacity across states can also play a role to level out the energy production (see the supergrid some companies are promoting in Europe), and at the same time provide a real free energy market across borders.
The cost of a power plant is not interesting, but the cost pr. produced kWh is what matters.
Solar is expensive still, but plays rather well with wind and other sources as it produces energy when most needed (daytime). Geothermal is also viable in places where the underground is hot enough or for heating. Wave power and other renewable sources are still in their infancy.
Wind power has a high investment and low operating costs. That means that if the turbine is produced in the country, the money we pay for our electricity for the most part stay here. For fossil fuel plants, a high part of the electricity price is made of up of the cost of fuel, and this of cause goes to the country where that have been bought.
I hope this clears up a few things.
Troels

Julian Flood
March 16, 2010 2:37 am

I think everyone is too hard on windfarms. If correctly sited they can provide a useful cooling reflective coat of cloud over the sea when they are offshore.
http://www.windaction.org/pictures/25251
If millions are deployed they’ll produce enough salt particles to offset those lost by oil pollution on the sea surface and restore the status quo ante. They could even have their vanes lengthened so they pump out lots of CCNs whenever the wind is blowing, like Latham’s cloud ships.
Or we could clean up the pollution.
JF

OceanTwo
March 16, 2010 2:39 am

bill hughes (00:36:19) :
Absolutely agree. I think a lot of people are unduly harsh on wind power, but it’s not surprising when politicians/environmentalists push it as a complete solution. It’s a local solution.
There are a lot of technical limitations that the majority remain ignorant of. I’ve petitioned my local politicians and the local paper to stop following the hype of wind power. SC is currently following the notion that off-shore wind power can be a significant source of energy, but the practical considerations just don’t make it feasible.
I received a retort from the Clemson University Restoration Institute: Clemson recently was praised for its push to implement a wind energy partnership in South Carolina.
I can foresee wind power offsetting a total of 10% energy. But it is not a cost saving in the long term in either jobs or capital expenditure. As noted, you still need a regular energy generation to backup this 10%, even if its not used. Additionally, yes, ‘green’ jobs are created – this simply means the maintenance costs and manpower required are greater per megawatt than any other energy production source: saying it creates jobs is actually a bad thing in this case because these jobs don’t create revenue (contrast with, say, a retail store or factory).
I foresee my states energy future in building windmills for export to other states (tee, hee, hee!) up until they realize the emperor has no clothes and quit buying the things, of course.
As an engineer, I do see windmills as pretty cool machines: the design and construction can be pretty high tech. But then, so are space shuttles, warp drives and time machines. But this is no reason to go out and plonk them everywhere you can to please an ignorant populace.

lowercasefred
March 16, 2010 3:25 am

We will know the lesson has struck home when we see coal mining on a resurgence in the UK.
Still a few years out yet – but coming.
If you live in the UK it’s time to buy UK Coal.

March 16, 2010 3:41 am

Our forebears would regard this as ridiculous. There were very good reasons to move up from using wind power for windmills, windpumps, sailing ships etc. We regarded the industrial revolution as progress – but not these Greens; oh, no.
The UK government is trying to roll out small-scale hydro schemes on every stream in the country: 36000 of them. So every stretch of water will be dammed, fish imperiled, but landowners will get generous subsidies. Every unit of electricity generated will net the landowner around 8 times the wholesale rate for electricity produced by conventional means, courtesy of the UK taxpayer. That’s some expensive electricity, expensive taxes, and ecological damage.
What will be the maximum contribution to the UK’s electricity requirements, for tens of thousands of installations and grid connectors, and phenomenal cost? According to government figures, maximum 0.5% . A lot less when there’s a dry season. Lets call it ‘nothing’, shall we?
Now that is insanity, or it is religion. Just like the wind turbines, these will merely be highly visible shrines and offerings to the Green goddess. They are useless religious symbols as they have no instrumental value and require daily provisions of offerings from taxpayers to propitiate the wrath of the goddess.

R Dunn
March 16, 2010 3:49 am

Wind turbines do not exactly fit the definition of “high reliability.”
It’s always fun to revisit this video –
[youtube=http://www.youtube.com/watch?v=c3FZtmlHwcA&hl=en_US&fs=1&]