Developer scraps Montana wind farm over power price

[TexasTowelie]

A Calgary-based energy company said Wednesday it won't build a 21-megawatt wind farm in Montana because it won't be paid enough for the power it generates.

The Public Service Commission approved a price of $23.30 per megawatt hour.

TransAlta wanted $43.63 per megawatt hour for the power; Northwestern Energy, which would have purchased it, proposed paying $13.96.

The price discrepancy had gone to the PSC for mediation.

Stacey Hatcher, TransAlta communications manager, said Wednesday the company can't accept the terms of the power purchase agreement awarded for the New Colony wind farm near Martinsdale because the price makes it economically unfeasible.

Read more: http://www.greatfallstribune.com/story/news/2017/12/13/developer-scraps-montana-wind-farm-over-power-price/948741001/

[VMA131Marine]

1. Something is odd about this

A quick search turned up this article in Scientific American

[link:https://blogs.scientificamerican.com/plugged-in/wind-energy-is-one-of-the-cheapest-sources-of-electricity-and-its-getting-cheaper/|

In recent years, an enormous amount of wind energy has been procured at or below a price of 20 dollars per megawatt-hour — or just 2 cents per kilowatt-hour. That is competitive with typical wholesale electricity market prices by any measure.
But it’s important to note that the price of wind energy offered through a PPA is an all-in price that includes the effect of subsidies such as the federal wind production tax credit, which provides a tax subsidy of 18 to 23 dollars per megawatt hour of energy produced. When you exclude the production tax credit and look at the levelized cost of energy (LCOE) from interior wind, it still comes in at an extremely competitive cost of less than 50 dollars per megawatt-hour (5 cents per kilowatt-hour). For comparison, the Energy Information Administration estimates a best-in-class combined cycle natural gas power plant has an LCOE of about 54 dollars per megawatt-hour (5.4 cents per kilowatt-hour). So even when you account for the effect of the federal wind production tax credit, wind energy remains an extremely competitive generating resource.

With the tax credit, this project should have worked at $23.20 per MWh with no problem.

[democratisphere]

2. Greed.