Traditionally, offshore wind farms have been located on the coast, but GE and LEEDCo hope to generate 1000 MW of wind energy from Lake Erie within the next decade.

Lake Erie will soon be dotted with five massive 4 MW wind turbines making it the first offshore freshwater wind farm in the continent.

The wind farm project, announced at the American Wind Energy Association’s annual WINDPOWER Conference in Dallas, will be a collaborative effort between General Electric (GE) and the Lake Erie Energy Development Corporation (LEEDCo).   At peak efficiency, the wind farm will be capable of providing 20 MW of energy, enough to power 16,000 homes in the Northern Ohio region.

“Ohio’s greatest potential for creating wind energy is offshore in Lake Erie, and this partnership marks a significant step forward,” said Ohio Governor Ted Strickland. “

GE will fit the turbines with ScanWind technology which replaces standard gearboxes with an advanced drive train.  ScanWind is a Scandinavian corporation which developed the technology and was acquired by GE in 2009.

“We look forward to installing our next generation offshore, direct drive wind technology in Lake Erie,” said Vic Abate, President of AWEA’s Board of Directors and Vice President of GE’s Renewable Energy. “GE is committed to working with LEEDCo to achieve its vision of creating an offshore wind sector in Northern Ohio and the Great Lakes region.”

The massive turbines, each weighing 225 tons, would stand 300 feet above the lake and be grouped approximately six miles or so off Cleveland’s shore.

The expected cost is projected to be $100 million.  Financing terms for the venture are still incomplete.  State and federal tax credits together with loans or grants may be needed. Half of the project’s expense will be the turbines themselves. The balance of the cost would cover purchase of the towers, foundations on the lake bottom, an underwater power line to the shore, and engineering expenses.

The 20 MW venture is just the initial phase.  If the test phase is successful, LEEDCo would like to see the Lake Erie wind farm generating up to 1000 MW of energy by 2020.

“LEEDCo is pleased to be working with GE and we value the equipment efficiency, product innovation, and commercial acumen they bring to the partnership,” according to, President of LEEDCo, Dr. Lorry Wagner.

“Together, we aim to develop a cost-effective approach for installing and maintaining offshore wind turbines with the highest possible availability. We are confident that as the GE product line develops and our methodologies mature, the combination will promote a self-sustaining and growing market for offshore wind in Lake Erie and the Great Lakes, providing economic opportunity and emissions-free energy for Northern Ohio”, Wagner added.

The opportunity to spur Ohio’s job market is an added bonus. “In Ohio, we have all the right assets to make offshore wind energy successful, including an innovative workforce and the manufacturing strengths that would allow us to build all the component parts for wind turbines.”  said Governor Strickland.  “This partnership will not only advance offshore wind technologies, it will also advance Ohio’s economy. We are eager to continue the State’s strong collaboration with GE and LEEDCo as we pursue this exciting, first-of-its-kind initiative for Lake Erie.”

“This is not just about making power, it’s about creating jobs,” Wagner concurred.

A new report claims that coal based power plants create more emissions than they normally would because utilities must comply with pro-wind energy policies.

The natural gas industry has produced a new report which claims that increased use of wind energy cause coal-fired power plants to “cycle” unconventionally and thereby cause an increase in the pollution levels they traditionally produce along Colorado’s Front Range.

Bentek Energy LLC, a consulting company, for the Independent Petroleum Association of Mountain States, conducted the report titled “How Less Became More: Wind, Power and Unintended Consequences in the Colorado Energy Market”.

“It’s not the wind that’s doing it; it’s what the wind energy is causing in behavior changes at the plants,” Bentek’s president Porter Bennett said.

According to the report, local ordinances in Colorado require utility companies to avail themselves of wind energy when it is available.  Compliant utilities are required to cycle coal plants on and off, most frequently at night when there tends to be more wind.  Because the coal plants are shutting down and restarting at irregular and unpredictable intervals they operate inefficiently and sustain interference with emission control equipment resulting in increased sulfer dioxide, (SO2) nitrous oxide (NO2) and carbon dioxide (CO2) emissions.

Data for the report came from evaluation of four years of emissions records from individual power plants owned by Xcel Energy Inc in Colorado. Emissions levels are reported to the federal government on an hour-by-hour basis.

Barring modifications to Colorado statutes, the report indicates that the problem may get worse in the future.  Presently, utilities companies operating in Colorado are required to furnish 20% of their energy through renewable sources.  Last Month, Gov. Bill Ritter signed a law bumping that requirement to 30% by 2020.

Natural gas power plants"cycle" on and off more efficiently than their coal counterparts.

The report recommends curbing the use of wind energy during the next one or two years to levels that match power output at existing natural gas-fired power plants — and building more natural gas plants in the long term.

According to the report, natural gas plants can ramp up and down without increasing emissions like their coal based counterparts.

The report could have a nationwide impact.  Congress is considering introducing a bill which may set standards for renewable energy sources nationally.  Accordingly, the ramifications of the report may extend far beyond Colorado’s four corners if it sways Congress to consider its findings during bill deliberations.

Furthermore, authors of the report claim that increased emissions from coal based power plants are not unique to Colorado as they found similar results in Texas.

Wind energy advocates, however, claim the report is flawed.

“The aggregate numbers are what they are,” said Michael Goggin, American Wind Energe Associan’s (AWEA) manager of transmission issues. “When you’re adding wind power, a zero-emissions resource to the grid, that power has to displace some of that other power. You’re driving off coal or natural gas. Wind is displacing fossil fuel generation and it’s a zero-emission resource.”

Bennett counters that the AWEA’s numbers are misleading.

“One of the points of our study is that you can’t look at aggregated data; you have to go down and look deeper because the aggregation masks the real reality,” Bennett said.

Emissions levels statewide declined during the subject four year period, in part, due to new emissions control equipment that Xcel added to its Comanche coal-fired power plant in Pueblo, Bennett said.

The Air Force has concerns that erecting wind turbines in Shepherds Flat could create safety issues.

The Federal Aviation Administration has issued a “notice of presumed hazard” halting Caithness Energy’s development of what would be the world’s largest wind farm in Shepherds Flat, Oregon that was scheduled to break ground on May 1.

The FAA’s order resulted from increasing concerns from the Air Force that the three hundred and thirty eight turbines would interfere with transmissions from a radar station in Fossil.

“We’re just sitting here in no man’s land,” said Les Gelber, a Caithness Energy partner.

Oregon stands to lose 706 jobs and millions of dollars in royalties for Oregon farmers if the venture is canceled. Oregon Sens. Ron Wyden and Jeff Merkley are assisting Caithness Energy in trying to resolve the issues and permit the project to continue.

“If the Defense Department allows this project to go down the drain after years and years of development, the (wind farm) investors are going to walk,” Wyden said. “We don’t see why they should be able to come in at the last minute and put the kibosh on this program.”

Gelber claims that the Air Force and Navy were notified of the project years ago and never raised any concerns.  He asserts that Caithness has invested four to five years in obtaining proper permits from federal and local authorities to enable construction of the 845 megawatt capacity farm.  Now, after signing a $1.4 billion agreement with General Electric, workers are arriving for construction on roads and turbine foundations, however, Caithness cannot put them to work.  They may be prevented from ever completing their venture.

The Air Force’s concern stems from two factors.  Turbines can reflect radar and create blind spots that erase airplanes from the radar screen.  Additionally, the varying speeds in turbines due to changes in wind clutter the radar screen.

According to the FAA notice, the proposed turbines could “seriously impair the ability of the (Department of Defense) to detect, monitor and safely conduct air operations in this region.”  The FAA further states that the Fossil radar station “already experiences significant clutter and target tracking issues in this general area.”

The GWEC's projection for development of wind energy through 2014 is based on their expectations that growth will proceed at a rate of 21% per annum.

The Global Wind Energy Council (GWEC) reports that in 2009 China slipped past Germany in its wind production and presently ranks second in the world to the United States.

For the past decade, wind production has increased at a rate of 29% globally. China installed 13.8 GW of wind farms last year for a cumulative effort of 25.9 GW, a 114% increase.

Both the United States and China have exceeded wind growth expectations over recent years. While insiders expected the US to scale back its 2009 production of wind energy due to a struggling global economy, both countries have shown a commitment toward investing in wind.

“Even in the face of a global recession and financial crisis, wind energy continues to be the technology of choice in many countries around the world” said Steve Sawyer, GWEC Secretary General. “Wind power is clean, reliable and quick to install, so it is the most attractive solution for improving supply security, reducing CO2 emissions, and creating thousands of jobs in the process” Sawyer added. “All of these qualities are of key importance, even more so in times of economic uncertainty.”

Notwithstanding the 29% growth trend, the GWEC predicts wind energy capacity will increase at a rate of 21% over the next 5 years.  At that rate, the global installed wind capacity will reach 409 GW by 2014, up from 158.5 GW at the end of 2009.

While the United States’ 35.1 GW wind capacity provides a significant edge over any other countries, it seems possible that China will be a lot closer, if not ahead of the US by 2014.  China has gone on record as stating that they intend to produce 150 GW per annum by the end of 2020, a quantity that exceeds the collective amount of wind energy generated globally at the close of 2008.

China’s rapid development could justify the GWEC’s prediction that wind energy may save 10 bn tons of CO2 globally by the end of the decade.

Welcome to the new R-Squared! Our goals here are to provide a place to engage in respectful and thoughtful debate about the very important issue of energy.

I thought it might be a good idea to summarize my positions on a wide variety of energy issues. Here I will attempt to briefly cover my views on oil, coal, ethanol (cellulosic, corn, and sugarcane), renewable diesel (green and biodiesel), nuclear power, solar power, wind power, and then climate change. I don’t intend to cover a lot of ground explaining my positions in detail; I will save that for future essays.

The most important thing to note is that I try to let the data determine my position. But that also means that as new data come in, my position may shift. Therefore, my positions shouldn’t be viewed as being etched in stone.

I try to take a scientific approach in which data have to constantly be sifted through, categorized according to level of credibility, and incorporated into the position as appropriate. Of course the categorization step is important, because there are studies that are funded by interest groups that I put into a vastly different category than independent, peer-reviewed research.

To put my positions into perspective, let me explain how I see the world. First, I view energy as one of the most critical underpinnings of our society. Without energy, modern society falls apart. Thus, I think energy policy is a critically important – and very underrated – issue.

I believe renewable energy is critical to our future. Development of renewable energy is what I do for a living. But I am also an advocate of responsible use of taxpayer money. But what I see a lot of in the world today is taxpayer money flowing to companies that are just out hyping their technologies. I don’t want to see energy policy influenced by gross exaggerations, and yet that is the situation I see today. That is what motivates me to write.

Here is a rundown, with the briefest of explanations, on where I see the world of energy today. I will break this up in transportation fuels, electricity, and then a word on climate change. This list is by no means comprehensive, but I have tried to include the major contenders/pretenders.

Transportation Fuels

Corn ethanol – My position on corn ethanol is often distorted by supporters of U.S. ethanol policy. I am not against corn ethanol. What I am against are some of the policies that we have put in place, such as subsidies on top of mandates. The benefits of corn ethanol are typically exaggerated by various interest groups, and what I try to do is sift the real from the hype to understand what corn ethanol is actually delivering for the taxpayer investments we are making. That usually runs afoul of the hype, and thus I am painted as anti-ethanol. What I would like to see corn ethanol do is get the fossil fuels out of their operations.

Sugarcane ethanol – Has some distinct advantages over corn ethanol. Two of the key challenges for producing ethanol are logistics of getting low-energy-density biomass in, and the energy required to convert to ethanol and purify. These issues aren’t much of a factor for sugarcane ethanol, because clean waste biomass is already at the plant as a result of the sugarcane processing. So they essentially have free boiler fuel, which minimizes the fossil fuel inputs into the process. That enables ethanol production that is relatively cheap, and that is largely decoupled from the impact of volatile fossil fuel prices.

Cellulosic ethanol – More hype than substance. This was the topic of my graduate school research in the early 90’s, and even then there was a very long history. In fact, cellulosic ethanol has been commercialized multiple times around the world, beginning in 1898 in Germany. The U.S. built two plants during World War I and shut them both down after the war due to poor economics. Another was built in the U.S. during WWII in Oregon, never produced ethanol during the war, and was closed down after the war. During the past decade there has been a race to reinvent the wheel and become the “first” to commercialize cellulosic ethanol. Worse, groups doing gasification to mixed alcohols started calling their product cellulosic ethanol. But there are very fundamental differences.

Renewable diesels – There are two major types, biodiesel and green diesel. There are two different ways to make green diesel; gasification and subsequent Fischer-Tropsch or hydrocracking vegetable oils or animal fats. Biodiesel relies heavily on methanol, almost exclusively fossil-fuel derived, and will never in my opinion be viable without subsidies. The green diesels are expensive to produce, but have more long-term promise in being able to make a real contribution to the energy mix.

Algal fuel – A subset of renewable diesel. As with cellulosic ethanol, more hype than substance here. There are a couple of possible routes that could work, but right now algal fuel is a very long ways from the market. Beware of those who promise $2 or $3 fuel from algae.

Petroleum – While I have a background in the oil industry, I don’t wish to see the world continue to rely on petroleum. There are many reasons that I will detail in a future post, but I think we have built a society that is far too dependent on oil. The consequences of oil shortages in a petroleum-dependent world are severe, and that is a risk that I don’t believe we can afford in the long run. On the other hand, I recognize the reality that the world has long run on cheap petroleum, and we will need petroleum for many years to come. Thus, I don’t favor punitive legislation that causes artificial shortages while demand is still high.

Natural gas – Much cleaner than coal for the production of electricity, and the U.S. is in a pretty good position with respect to supply. Can be used to produce electricity, heat homes, or even fuel cars. A key question for me in the corn ethanol debate is whether it makes more sense to directly fuel cars with natural gas instead of converting the natural gas into fertilizer for the corn and then steam for the distillation of the ethanol.

Electricity

Wind power – Cost effective in some locations, but hindered by the intermittent nature of the source. Some issues with bird kills and noise, but my overall impression of wind has always been favorable.

Solar power – I love the idea of solar power, but costs and intermittency are a problem at present for solar PV. Solar thermal may be a more cost-effective option, and it also has the advantage of being able to produce power after the sun sets (up until the temperature of the thermal mass gets too low).

Geothermal – One of my favorite clean electricity technologies. In the right location, geothermal can be a very cost effective and clean producer of electricity. Deep geothermal is another matter, as it has been linked to triggering earthquakes.

Hydropower – Same class as geothermal for me. While there are some issues, this is the case with all energy sources, and hydropower’s issues are mild compared to some other energy sources. Comparatively, hydropower ranks very high on my list.

Coal – Very similar situation to oil. We have created a society that is very dependent on coal, and there are numerous environmental issues associated with coal. On the other hand, it is easy to see why we are so coal-dependent: It is very cheap relative to other fuel sources, and it provides reliable power. In the minds of consumers, cheap and reliable has historically won out over environmental concerns.

Nuclear – If you look at the projections for the growth of electricity demand – combined with the desires of many to see coal plants phased out – there is no other option than nuclear that can deliver the desired amounts of electricity. So I think we are going to need to expand nuclear power in the years ahead.

Climate Change

This is really too complex to summarize briefly, and in doing so I am afraid my position may be misunderstood. Whether you accept the idea that man is contributing to climate change, I don’t believe it is a good idea to conduct such a grand experiment on the atmosphere because the ultimate consequences can’t be predicted. However, I can’t see any trajectory that will result in a global decline in CO2 emissions. Despite all of the best efforts (e.g., Kyoto Protocol), global CO2 concentrations continue to increase. As China and India continue to industrialize and improve their standards of living, they will demand cheap power. Any way I look at it, global CO2 concentrations will continue to head up until we start to run short of fossil fuels.

None of that is to imply that I don’t think it is very serious issue. My position has long been that I am not an expert in the field, and so I defer to the experts. The consensus has always seemed to me that atmospheric scientists believe that the activities of mankind are contributing to climate change.

On the other hand, I also believe that the issue should continue to be debated. There is far too much rancor over climate change, with each side hurling accusations and insults. Let the debate take place in a respectful manner, and let’s not try to shout down the other side, or suppress information. But at the end of the day, it just seems to me that our efforts to stop rising carbon emissions are futile.

I have certainly left out a lot, and major details are missing. Most of the energy options I mentioned above will be expounded upon in future essays. Or, if you don’t want to wait, feel free to start that conversation yourself.

Chet Culver, Chairman of the Governors Wind energy Coalition is leading the charge to push Congress towards minimum wind energy requirements.

An assembly of 29 governors is urging Washington to enact Federal legislation that would mandate electric companies to obtain a minimum of 10 percent of the power they provide through renewable energy within two years.  The proposal, allegedly designed to stimulate job creation as well as climate reform, was presented today by letters to the White House and to Congress from the Governors’ Wind Energy Coalition.

“Right now, this is about jobs,” said Rhode Island Gov. Donald Carcieri (R).

“We don’t want these things to get caught up in the broader debate and discussion [i.e. global warming] that will only slow us down,” added Iowa Gov. Chet Culver (D), chairman of the bipartisan Coalition, which includes the governors of 29 states.

With national attention focused on health reform proposals, the group is concerned that the Federal government has become sidetracked from the agenda of getting Americans back to work.

“Congressional action on the energy bill seems to have stalled,” said Carcieri in a statement. “It is our hope that these recommendations — and the national bipartisan consensus they represent — will advance the energy deliberations now under way in Congress.”

Other recommendations by the governors include:

• Developing new interstate electric transmission system infrastructure to facilitate access to these resources nationwide.
• Greater federal support for coastal and off-shore wind farms; and
• Extending the Treasury Department’s financing program that offers cash up front instead of the Investment Tax Credit, as well as a renewable energy production tax credit.

Senator Chuck Grassley, Iowa (R), thinks the Governors' joint proposal sets unrealistic objectives.

“People want more renewable energy. Congress can’t ask for a clearer signal for what works politically than what’s working at the state level.” says Reid Detchon, executive director of the Energy Future Coalition, told the Christian Science Monitor.  ”These governors coming forward like this is just one more indicator of public sentiment in favor of stronger requirements for renewable energy.”

Congress does not unanimously subscribe to the notion that the Coalition’s mandate presents realistic objectives. Indeed, Culver has not convinced his own State’s senior senator that the mandate can be reached by 2012.

While Iowan Senator Chuck Grassley (R) claims to have supported renewable energy portfolios in the past, he believes the Coalition has bitten off more than can be chewed.  “Probably not ten-percent by 2012,” Grassley says, “I don’t think that that’s possible but I surely think 15% by 2020 is possible.”

House of Representatives passed two bills.

Today, the House of Representatives passed two bills that would provide a considerable amount of money to both wind power and hybrid heavy-duty trucks. H.R. 3165, Wind Energy Research and Development Act of 2009 passed by a voice vote and was authored by Paul Tonko, a Democrat from New York.

H.R. 3165 directs the DOE to create a program of research and development that would improve the energy efficiency, reliability, and capability of wind turbines. Furthermore, this R&D would reduce the cost of building and maintaining the wind turbines and finally, it would optimize the design of them thus making them more efficient.

According to Tonko, “The United States has enough wind energy resources to meet all of our electricity needs several times over…”

H.R. 3165 authorizes that $200 million be sent each fiscal year from 2010-2014 on wind power. If this bill is enacted, it would be the first time that a set amount of money was authorized to be spent on R&D for wind power.

On top of passing the Wind Energy Research and Development Act of 2009, the House of Representatives also voted on H.R. 445, Heavy Duty Hybrid Vehicle Research, Development, and Demonstration Act of 2009. The bill provides for the Secretary of Energy to grant between 3-7 grants of up to $3 million on research and development for technology, such as a plug-in hybrid, for heavy duty trucks.

Because one fourth of the nation’s fuel is used by heavy-duty trucks, any sort of technology on making them more cost effective would have a great impact on the amounts of gasoline used on a daily basis. If the bill is enacted, manufacturers of heavy-duty trucks will be able to research, develop, and build hybrid heavy-duty trucks.

There are so many ways to achieve renewable energy. California is trying to develop their own plethora or renewable energy.

The utility companies want there to be flexibility in the bills because of numerous cases. First off, they want the option to import renewable energy from out of state so that they can meet the 33% bill. Furthermore, they want the opportunity to extend the 2020 deadline if they’re going to miss it. Their argument is that the markets can’t plan that far in the future and it is unfair to the utility companies to demand there be this reached deadline.

The fight is coming in from all parts. The environmentalists are worried that if the lawmakers allow this flexibility, it will prevent real change from occurring environmentally speaking and no good will come from it. Consumers are concerned that the cost of California residents’ energy bills will skyrocket. Furthermore, they’re trying to prevent these utility companies from getting the energy from elsewhere because they want to create jobs in California.

People are concerned that if the utility companies are allowed to import their energy, what will happen is that there will be no economic growth in California, only green growth, and the goal is for there to be a mix of both.

There’s also the issue of funding it. It could require as much as $115 billion to reach the 33% goal by 2020. This makes it increasingly difficult for utility companies to reach it, especially since its being suggested that they won’t even reach the 20% by 2010 as tehy were supposed to do. Instead, it may take as long as 2013 or 2014.

There are also discussions of using hydroelectric plants, but environmentalists are firmly against some aspects of it. They are looking into creating run-of-the-river plants where they divert water into the turbines to create electricity, but don’t block the entire river with a huge dam. This would please environmentalists as well as provide for more energy.

Governor Arnold Schwarzenegger has expressed a great interest in trying to turn California into a firm green energy producing state. With the economy shaky there, it would be incredibly beneficial for the state to have this flow of renewable energy. Most importantly, the environment would get a break from the constant release of emissions.

“We are very excited to be able to work with Wind Pro,” said Michael Coskun, Vice President of GWS Technologies, Inc. “Montana has terrific state and local incentives which will complement the current federal rebates, making this the perfect market to begin utility-scale installations and distribution.”

An example of a wind turbine turning wind power into energy.

According to sources within Montana, the state is currently developing more wind energy than any other state in the Union with the hope that by 2030, 30% of its energy will come from wind, greatly cutting back on the need for other nonrenewable sources.

The newly created department in the state, Energy Promotion and Development Division (2007), is responsibile for assisting and monitoring roughly 50 industrial projects that are in wind energy. These projects are all different sizes and in different stages of development, but the goal is for these projects to create over 4,000 megawatts of energy.

New transmission lines are in development that will greatly increase the amount of energy that can get around.

Created in 2005, GWS (GreenWindSolar) Technologies is based in Scottsdale, Arizona. They develop solar and wind-power renewable energy products and solutions. With wind being the fastest-growing source of energy, growing at 29% each year for the past ten years, it makes perfect sense why GWS Technologies Inc. was created.

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U.S. Ramping Up Wind Power Programs Even As Concerns Surface About Possible Declines In U.S. Wind Strength

By William Patalon III – Executive Editor

Money Morning/The Money Map Report

Just as the United States is boosting its reliance on wind power, a new academic study set for release in August says that U.S. wind forces may be getting weaker.

Eugene S. Takle, a professor of atmospheric science at Iowa State University, and the director of the school’s “climate science initiative,” says the research study concluded that U.S. wind strength has potentially declined by 15% to 30% during the past 30 years – an average decline of as much as 1% a year.

While conducting the study – which will appear in the Journal of Geophysical Research – researchers reviewed wind data taken at airports around the United States, and then based their findings on two sets of figures: One set from 1973-2000, and the other from 1973-2005.

The study concluded that three factors could be contributing to the declines in U.S. wind strength: Land-use changes, a changing climate and changes in the kind of instruments used to measure the wind, Takle told MarketWatch.com.

“If there have been trees growing or new buildings constructed near airports, it could impact the speed of winds on airports,” Takle said. However, it is also “[basic] meteorology that the wind is driven by differences in temperature between the poles and the equator, and those differences have been narrowed by climate change.”

Tough Timing

The findings come at time when the United States is making a serious push to increase the amount of electricity that’s generated by wind turbines grouped into so-called wind-power “farms.” Attempts to harness the wind are part of a broader national – or even global – commitment to “green” energy sources as a way of reducing dependence on oil and other fossil fuels for power generation.

Other power sources include solar, geothermal, hydroelectric and nuclear for commercial electricity production, while automakers are looking at new types of batteries and such innovations as power-storing “fuel cells” as alternatives to the conventional internal combustion engines that power most of the world’s cars and trucks.

The objectives are twofold. By decreasing the U.S. reliance on foreign oil, the country is hedging against the time when global supplies of the “black gold” begin to dry up, an eventuality that will propel the prices of crude and gasoline skyward. Diversifying away from oil and, perhaps, even coal is also a way of reversing – or at least slowing – environmentally ruinous (and politically controversial) global warming.

President Barack Obama is attempting to use the ongoing financial crisis to create a sense of urgency about America’s energy future, a challenge that no prior administration has yet been able to meet.

About one-third of President Obama’s $800 billion-plus stimulus package will go to infrastructure, with $30 billion allocated for U.S. roads and highways and another $10 billion earmarked for railways and mass-transit systems.

President Obama has also proposed spending $150 billion “over the next 10 years to catalyze private efforts to build a clean energy future.” The administration also proposes to increase the amount of electricity that comes from renewable resources from 10% in 2012 to 25% by 2025, Wall Street 24/7 reported in early January.

Creating the power is only part of the problem. Delivering it will be a challenge, too, especially given the country’s aging power grid. Upgrading that aging equipment is expected to cost more than $880 billion, according to a November 2008 report from the Brattle Group.

An Energy Boon For Entrepreneur T. Boone?

In many cases, those federal outlays will serve only as seed capital. It will likely fall to innovators in the U.S. private sector to really energize the alternative-power market.

One key player is legendary oilman and venture capitalist T. Boone Pickens, who has unveiled a plan to cut U.S. dependence on foreign oil through the power of alternatives such as wind and natural gas, Money Morning reported last July.

“We’re paying $700 billion a year for foreign oil. It’s breaking us as a nation,” Pickens said at the time. Former U.S. President Richard M. Nixon “said in 1970 that we were importing 20% of our oil and that by 1980 it would be 0%. That didn’t happen. It went to 42% in 1991 with the Gulf War. It’s just under 70% now. Where do you think we’re going to be in 10 years when our economy is busted and we’re importing 80% of our oil?”

Pickens wants to create what he calls a “bridge to the future” that will help cut slash the U.S. reliance on imported foreign oil by focusing on two specific alternatives:

• Cars that burn natural gas instead of gasoline.
• And electricity generated by wind power.

There’s a smooth and elegant logic to his strategy: By constructing electric-generating wind-power farms, the United States can free up natural gas supplies that currently generate 22% of the nation’s electricity. That natural gas can then be used to power cleaner-burning cars and trucks, thereby reducing our dependence on imported oil while also reducing the damage to the environment. This will also buy time for the development of other, even-greener, alternative sources of energy.

Pickens’ Wind Power Project

According to Pickens, wind power could eventually fulfill as much as 20% of the United States’ energy needs. Calling the Great Plains region of the United States the “Saudi Arabia of wind,” Pickens last summer launched plans for a $10 billion alternative energy project in the Texas panhandle that has the potential to one day become the world’s largest wind-power farm.

Picken’s Mesa Power LLP plans to purchase 667 wind turbines from U.S. industrial giant General Electric Co. (NYSE: GE). Each turbine can produce 1.5 megawatts of electricity – enough to provide the ongoing power needs of 360 to 600 U.S. homes, according to Money Morning calculations based on statistics provided by Oregon Power Solutions Inc., a Baker City, OR consulting firm.

The first phase of the Pickens project, already under construction, will produce 1,000 megawatts of electricity, enough energy to power 300,000 homes. GE will begin delivering the turbines in 2010, and current plans call for the project to start producing power in 2011.

Ultimately, Mesa Power plans to have enough turbines to produce 4,000 megawatts of energy. Overall, the “Pampa Wind Mill” project is expected to cost $10 billion and be completed in 2014.

Pickens has launched a “Pickens Plan” Web site, which is urges the country’s “energy army” to lobby Congress for funding and a commitment to green-energy projects.

Other Players Showing Interest

An Irish company – its interest in the U.S. alternative energy market piqued by the green-technology money included in the Obama administration’s stimulus package – on Monday acquired three Illinois wind farms located within 100 miles of Chicago, The Chicago Tribune reported.

Plans call for the Dublin-based Mainstream Renewable Power to invest $1.69 billion over four years to develop the wind farms. The purchase price was not disclosed.

“The U.S. market is of strategic importance to Mainstream, and the scale of the opportunity is strongly reflected in President Obama’s economic stimulus package, which includes $56 billion in grants and tax breaks for U.S. clean energy projects over the next 10 years and a budget of $15 billion a year to fund renewable energy programs,” Mainstream co-founder and Chief Executive Officer Eddie O’Connor said in a statement. “The administration’s goal of generating 25% of the nation’s electricity from renewable energy sources by 2025 will help revitalize the U.S. economy and protect consumers.”

The farms have the potential to generate 787 megawatts of electricity by 2013, The Tribune said. The most advanced is the 120-megawatt Shady Oaks project in Lee County. When finished next year, it should be able to generate enough electricity to power about 30,000 homes, Mainstream said.

The other two wind-power farms are the 467-megawatt Green River project, also in Lee County, and a 200-megawatt project set for Boone County. Construction on the Green River project will begin next year, while the Boone County project is still in is development stages.

This is Mainstream’s second North American deal in three months; it earlier announced a Canadian wind farm project. It has also announced plans to build a wind farm in Chile.

Founded a year ago, Mainstream was created to build and operate wind-energy, solar-thermal and ocean-current power plants in partnerships with government agencies, electric utilities, developers and investors in North and South America, Europe, and South Africa. Barclays Capital (NYSE ADR: BCS) has a 14.6% stake in Mainstream.

Going Global

As Mainstream’s proposed forays into South America, Europe and Africa demonstrate, the push to harness the wind isn’t limited to the United States.
As of the end of last year, worldwide wind-powered generators were capable of generating 121.2 gigawatts (GW) of electricity. Wind power produces about 1.5% of the world’s electricity and its use is surging: The amount of electricity generated by wind power doubled between 2005 and 2008 alone.

Several countries have already embraced wind power in a major way: As of last year, it accounted for 19% of electricity production in Denmark, 11% in both Spain and Portugal and an estimated 7% in both Germany and Ireland. As of this May, 80 nations around the world were using wind power on a commercial basis.

Not surprisingly, China is making a big push to commercialize wind power and by last year was already the world’s sixth-largest user of wind-generated electricity. The country’s largest manufacturer of wind turbines – Xinjiang Goldwind Science & Technology Co. Ltd. – went public last year, raising nearly $250 million. It has about 33% of China’s wind-power-equipment market, according to KGI Securities Co. Ltd., a Taiwan investment-banking and brokerage firm.

“As China’s wind power sector takes off, we think Goldwind is well positioned to become a major beneficiary, thanks to its strong brand and first mover advantage,” KGI wrote in a research report.

Not a Complete Answer

Although wind power has substantial promise, it’s not an infallible energy solution, and has some serious limitations – as the U.S. wind-power study shows. For one thing, although an estimated 72 terawatts of wind power on Earth can be potentially commercially viable – an amount that’s six times the estimated 15 terawatts of total power usage on earth – not all the wind energy flowing past any given point can be recovered.

Accoridng to a science axiom known as Betz’s Law – named for the German physicist, Albert Betz, who discovered the rule in 1919 – no turbine can capture more than 59.3% of the potential energy in wind.

And there are other challenges, some of which are caused by the natural lay of the land in a given location. In the United States, for instance, where there are now concerns about diminishing wind strength, some coastal areas may retain wind strength because of the greater temperature differences between the land and the ocean.

Given the growing importance of wind power, more study will be required.

Concludes the study: “Given the importance of the wind-energy industry to meeting federal and state mandates for increased use of renewable energy supplies and the impact of changing wind regimes on a variety of other industries and physical processes, further research on wind climate variability and evolution is required.”

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