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Wind Energy Industry Faces Watershed Year

December 12, 1985

LIVERMORE, Calif. (AP) _ For five years, it’s been a breeze for the fledgling wind power industry to sustain dramatic growth.

This year the industry will produce more than three times the electrical power it did last year. But 1986 will see important changes for the people who make and operate windmills, as federal tax breaks fueling industry growth expire while wind power still costs more to produce than energy generated by oil and coal.

The business ″could have a very difficult time in the next year,″ said Thomas O. Gray, executive director of the American Wind Energy Association in Washington.

Can the industry survive? ″I’d have to give you a forthright maybe,″ he said.

Industry officials prefer to concentrate on the strides made since 1981, when commercial windmills first appeared in the United States, rather than predict the immediate future.

Nowhere are those strides more striking than at Altamont Pass, near Livermore 40 miles east of San Francisco. The pass boasts the world’s largest windfarm - more than 5,000 machines spread over 30,000 rolling acres.

California produces 95 percent of the wind energy generated in the United States, and Altamont Pass is responsible for more than half of the total.

There are small windfarms elsewhere in the United States, and in Europe, but nothing approaches the size of California’s installations.

A stiff breeze blankets Altamont Pass for much of the year, making it undesirable for housing but ideal for making electricity from wind.

Row upon row of windmills stretch over the pass, set atop tripods and tubular or lattice towers. Most machines have three rotors, although a two- bladed machine and one vertical axis model resembling an eggbeater also are used.

The machines are mostly U.S.-made, but Danish, Scottish, Dutch and Belgian windmills also can be found at the pass.

U.S. Windpower Inc. of San Francisco operates about 40 percent of the mills at Altamont Pass. The company’s machines have three blades, a rotor diameter of 56 feet, and rise 60 feet above the dry vegetation dotted with grazing cows.

It costs U.S. Windpower about $155,000 to get a 100-kilowatt machine running at Altamont Pass, spokeswoman Laurie Galbraith said.

Galbraith said each machine U.S. Windpower installs can be expected to bring in annual revenues of about $20,000, with utilities paying about 9 cents a kilowatt hour for the electricity.

Each machine can produce more than 200,000 kilowatt hours of electricity a year, enough to heat about 35 homes.

The boom in windfarming spurred by state and federal tax breaks of 25 percent did not carry over to individual users, or ″stand-alone″ windmills, said David Pate, director of government relations for the American Wind Energy Association. The cost of setting up batteries to store electricity generated by a windmill or to buy equipment to transfer it to a utility is prohibitive when one machine is involved, he said.

″On the economics, you really have to have a remote application″ to make a windmill financially viable, Pate said. Wind machines have proven successful in some applications for farms, he noted, but the cost of production will have to come down further for the technology to make new inroads among small users.

In 1981, wind energy was prohibitively expensive for everyone, costing about $2 per kilowatt hour to produce. But the industry has lowered that to a figure approaching 10 cents now, Gray said.

Glenn Ikemoto, assistant treasurer for U.S. Windpower, says his company figures that over the lifetime of a machine, the cost will be closer to 9 cents.

While that is still a little higher than the 7 cents to 8 cents it costs to produce electricity with oil, the gap is closing. Coal still remains the cheapest form of energy, costing about 4 cents per kilowatt hour at an existing plant, Ikemoto said.

The advantage that helps balance the costs, industry officials say, is that wind will never run out, something that cannot be said for coal or oil. And, they add, the California Energy Commission has projected that by 1995 wind energy could be the cheapest way to generate electricity.

The electricity produced by U.S. Windpower’s windmills at Altamont Pass is sent to Pacific Gas & Electric Co., the region’s largest utility.

″We look at a wind plant as a power plant system, not just a couple of windmills,″ said Stephan Jaspan, manager for windplant operations for U.S. Windpower in Livermore.

He said his employer, which is privately owned, will make a profit for 1985 and if he did not believe the industry could survive, ″I would be out looking for a job.″

But Ikemoto acknowledges the next three or four years will be rough, adding that ″a lot of the marginal companies just aren’t going to make the cut.″

Gray agrees, but notes that electricity generated by the wind so far in California was enough to serve 87,000 homes for one year and saved the equivalent of 870,000 barrels of oil.

Gray says he hopes wind energy will not be ignored until another energy crisis like that of the mid-1970s.

″These things just don’t spring up overnight,″ Gray said of windfarms. ″If the industry goes under and in three or four years we need it again it’ll take a few years to get back to this point.″

End Adv Weekend Editions Dec. 14-15

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