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Enron Mail |
Today's IssueAlert Sponsors:=20
Get over 100-pages of daily tracked and verified e-commerce utility-related= =20 information with SCIENTECH's E-Commerce InfoGrid. This unique Strategic an= d=20 Competitive Intelligence tool will help you stay on top of the torrent of= =20 e-commerce information news and analysis. Don't miss this opportunity to fi= nd=20 out what's happening in the field of utility e-commerce. Download a free= =20 sample and order your InfoGrid today at www.ConsultRCI.com or contact Chris= =20 Vigil at 505-244-7605.=20 The most comprehensive, up-to-date map of the North American Power System b= y=20 RDI/FT Energy is now available from SCIENTECH. The Wall Map measures 42" x= =20 72"; the Executive Map Set consists of 18 11" x 17" maps. Visit our website= =20 at www.ConsultRCI.com for a detailed description of these valuable maps and= =20 complete ordering instructions.=20 For advertising information, email Nancy Spring, or call (505)244-7613.=20 [IMAGE] IssueAlert for March 2, 2001=20 Enron Develops New Wind Facility in Texas by Will McNamara=20 Director, Electric Industry Analysis Enron Wind and Enron Power Marketing, Inc. (EPMI), affiliates of Enron Corp= .=20 (NYSE: ENE) announced completion of a transaction in which Enron Wind will= =20 build a 135-MW wind power facility near Iraan, Texas, in Pecos County. Unde= r=20 a related agreement, EPMI will purchase the project's electricity under a= =20 long-term agreement for resale into the Texas wholesale electricity market.= =20 This will be the first major wind facility that allows wholesale customers = to=20 purchase portions of the wind power production. In the past, customers=20 interested in purchasing "green power" were often forced to commit to 100= =20 percent of a project's output over the 20-year life of the equipment. =20 Analysis: I have suggested before that Texas arguably represents the most= =20 active market for wind power in the United States. Enron's expansion of its= =20 wind power assets in the state should further support the growth of=20 competition of wind power in this market, as the state gears up for the sta= rt=20 of competition in January 2002. Yet, while Enron Wind expands its presence = in=20 the market and prepares to sell wind-generated electricity on Texas'=20 wholesale market, several other companies also have established a significa= nt=20 presence in the state's booming wind power business.=20 Enron Wind, a subsidiary of Enron Corp., has been in existence for about 20= =20 years. The company designs and constructs wind power facilities around the= =20 world, comprising more than 4,500 wind turbines and 1,600 MW of capacity.= =20 According to information from the company, Enron Wind's manufacturing=20 facilities in California, Germany and Spain "develop and manufacture=20 state-of-the-art wind turbines technology ranging from 750 kW to 2.0 MW."= =20 Reportedly, Enron Wind's 1.5 MW Series turbine is the largest wind turbine= =20 manufactured in the United States and was the first of its size class to be= =20 manufactured for the global wind power market. The Enron Wind 1.5 wind=20 turbine utilizes a variable speed, constant frequency design and a=20 custom-designed airfoil, resulting in enhanced reliability and durability d= ue=20 to reduced mechanical loads, higher energy capture and lower noise signatur= e=20 than conventional fixed speed turbines. =20 The new project in Iraan, Texas, which is still unnamed, will consist of 90= =20 Enron Wind 1.5 MW wind turbines and is expected to be completed by late 200= 1.=20 Enron Wind claims that the project will supply approximately 520,000 megawa= tt=20 hours of clean electricity each year, enough to supply the annual residenti= al=20 needs of approximately 50,000 average American homes. =20 Enron Wind already has one wind facility operating in Texas, which is in fa= ct=20 located only 10 miles away from the new facility in Iraan. The Indian Mesa = I=20 facility is a 25.5 MW wind power generating facility also located in Pecos= =20 County. In July 2000, Enron Wind entered into a long-term agreement with Ci= ty=20 Public Service (CPS) of San Antonio to provide 100-percent output from the= =20 Indian Mesa I facility to the west Texas utility grid. Electricity produced= =20 from the Indian Mesa I facility reportedly is offered by CPS to individual= =20 retail customers such as Windtricity=01v, which is CPS' first renewable ene= rgy=20 product offering. =20 In addition to these two Texas facilities, Enron Wind also has developed,= =20 constructed and operated wind power facilities in Iowa (Storm Lake, 193 MW)= ,=20 Minnesota (Lake Benton 1, 107 MW, and Lake Benton 2, 104 MW), and Californi= a=20 (Cabazon, 40 MW, and Green Power 1, 16.5 MW). In all of these facilities,= =20 Enron Wind has established long-term contracts to sell 100 percent of the= =20 electricity generated at the wind facility to a local utility. As noted, th= e=20 new facility being planned in west Texas represents a new approach for Enro= n=20 Wind, as electricity output from the facility will be sold in portions to a= =20 variety of wholesale customers in the Texas market. =20 Over the last year, there has been a sharp increase in wind power projects = in=20 Texas, mostly being built in the western part of the state. At last report,= =20 186 MW of wind generation was already in operation in the state, with close= =20 to 400 MW recently announced or planned. As a result, Texas is experiencing= a=20 "wind boom" and is well on its way toward the 2,000 MW of renewable energy= =20 capacity required under the state's Renewables Portfolio Standard. =20 For example, last September TXU Electric & Gas, a subsidiary of TXU,=20 announced an agreement to purchase renewable energy from a planned 82.5 MW= =20 wind farm in west Texas. TXU Electric & Gas' share of the project will be= =20 31.5 MW. The project marked the company's third major purchase of wind powe= r=20 energy. Earlier in 2000, TXU Electric & Gas formed a partnership with FPL= =20 Energy to build 242 wind turbines south of Odessa, Texas, which will supply= =20 500 million kWh of electricity per year to approximately 29,000 homes. That= =20 project followed similar development in Big Spring, Texas, including eight= =20 wind turbines that are each capable of generating 1,650 kW of power.=20 As an energy supplier, TXU Electric & Gas has obtained a great deal of its= =20 wind power by partnering with FPL Energy=01*the largest generator of wind p= ower=20 in the United States=01*which serves on many of the new projects in west Te= xas.=20 FPL Energy is a fast-growing, unregulated power producer that is a=20 wholly-owned subsidiary of FPL Group. Among the more than 3,000 MW net=20 generating capacity that FPL Energy now has, the company focuses on "clean"= =20 technologies. Wind power now accounts for about 15 percent of FPL Energy's= =20 generation portfolio.=20 The projects by TXU Electric & Gas represented the largest wind power=20 projects in the world until late August, when Reliant Energy announced what= =20 it claimed to be the world's largest single wind power installation.=20 Reliant's wind power project, slated to become operational in the fourth=20 quarter of 2001, will be located on King Mountain, near McCamey in far west= =20 Texas. Reliant says that the project will be able to produce 250 MW of=20 electricity that will be sold into Texas' power grid. (Note: The Reliant wi= nd=20 project has now been eclipsed by a joint, 300-MW wind project between=20 PacifiCorp and FPL Energy in Walla Walla, Wash. However, I am focused only = on=20 the Texas market in this column).=20 Thus, Enron faces stiff competition when selling its wind power into the=20 Texas wholesale market. Enron joins TXU Electric & Gas, FPL Energy and=20 Reliant as the four companies that are vying to gain a leadership role over= =20 the limited areas of the state where the wind blows at speeds of 14.5 miles= =20 per hour or higher (the minimum to make a wind project cost effective). =20 Why is there so much development related to wind power taking place in Texa= s?=20 A number of factors are making the state a strong market for wind. The firs= t=20 factor is nature itself: Texas is one of the handful of states along the Su= n=20 Belt and Southwest regions that offer an abundance of wind. Some reports=20 indicate that average annual wind speeds in west Texas are 18 miles per hou= r.=20 Second, deregulation legislation in the state resulted in the Texas=20 Renewables Portfolio Standard, which until the end of 2001 is providing a= =20 federal tax credit for companies that produce electricity from wind. The=20 deregulation law in Texas is considered the most supportive of renewable=20 forms of energy when compared to the 24 states that have enacted legislatio= n=20 for electric competition. The pro-renewables stance is perhaps attributed t= o=20 the fact that a variety of environmental lobbying groups=01*including the= =20 Environmental Defense group and the Texas Renewable Energy Industries=20 Association=01*were included in the dialogue when Texas was forming its law= . In=20 addition, more efficient technology has lowered prices for wind-generated= =20 electricity, while costs associated with natural gas have remained high. Ad= d=20 all that to the fact that customers in the Lone Star State have a=20 comparatively high desire for wind power=01*along with other strong markets= such=20 as California, Iowa and Minnesota. Consequently, Texas has proven to be an= =20 enticing region for companies like Enron Wind and its competitors in the=20 state's wind power market. =20 An archive list of previous IssueAlerts is available at www.ConsultRCI.com Reach thousands of utility analysts and decision makers every day. Your=20 company can schedule a sponsorship of IssueAlert by contacting Nancy Spring= =20 via e-mail or calling (505)244-7613. Advertising opportunities are also=20 available on our website.=20 SCIENTECH is pleased to provide you with your free, daily IssueAlert. Let = us=20 know if we can help you with in-depth analyses or any other SCIENTECH=20 information products. If you would like to refer a colleague to receive ou= r=20 free, daily IssueAlerts, please reply to this email and include their ful= l=20 name and email address or register directly on our site. =20 If you no longer wish to receive this daily email, send a message to=20 IssueAlert, and include the word "delete" in the subject line.=20 SCIENTECH's IssueAlerts(SM) are compiled based on the independent analysis= =20 of SCIENTECH consultants. The opinions expressed in SCIENTECH's IssueAlert= s=20 are not intended to predict financial performance of companies discussed, = or=20 to be the basis for investment decisions of any kind. SCIENTECH's sole=20 purpose in publishing its IssueAlerts is to offer an independent perspecti= ve=20 regarding the key events occurring in the energy industry, based on its=20 long-standing reputation as an expert on energy issues. =20 Copyright 2001. SCIENTECH, Inc. All rights reserved.
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