In a few months, Minnkota Power Cooperative will have a large wind generator constructed near Valley City along Interstate 94. The power generated by this wind turbine will be made available to Nodak and the other ten distribution cooperatives in the Minnkota system. We will sell this wind energy to our customers under the brand name of Infinity. You should have received a bill stuffer explaining the Infinity Wind Energy Program, along with an opportunity to sign up to purchase a portion of the power produced with wind.
The wind generator near Valley City will be 900 KW of capacity, which is very large in comparison to the privately-owned generators we see in farmyards, but quite small in comparison to one of Minnkotaâ€™s coal-fired power plants. It will produce 900 kilowatt-hours of electricity for every hour it is generating at full capacity. It is expected to generate approximately 2.5 million kilowatt-hours annually if there are no significant maintenance problems.
The electricity generated with this wind turbine will be more expensive for Minnkota than the power they generate at their coal-fired power plants. Except for periods of price spikes in the energy market, it will be more expensive than power they can purchase daily through the regional power pool. For this reason, the output from the Infinity wind generator will be priced to Nodak and the other ten distribution cooperatives 3Â¢ per kilowatt-hour higher than the power generated with coal.
We have asked our customers if they would like to commit to a portion of the output from the Infinity wind generator by committing to purchase blocks of 100 kilowatt-hours per month. The rate for this power will be equal to our normal residential rate plus 3Â¢ per kilowatt-hour. Basically, this would cost the customer an additional $3.00 per month for each block.
The response from our customers and several of the other local distribution cooperatives has been sufficient to cover the entire output of the Infinity wind generator. This tells us there are people interested in having us generate part of our power with wind even if the cost is higher. However, the percentage in comparison to all of our power is still very small, and we donâ€™t know at this time how long these people will maintain their commitment.
Our position on wind energy is that we will generate the power if the consumer is willing to pay the price. At this point, it appears there is a small segment of our consumer base willing to pay a higher rate for wind-generated power. Time will tell if this consumer interest grows or dwindles.
The generation of electricity with wind has some attractive advantages, but it also has some serious disadvantages. The biggest advantage is clearly that the fuel cost is essentially free. Wind is abundant in North Dakota and is renewable. There are ample locations across the state to capture more wind than almost anywhere else in the country. Secondly, wind generators do not create emissions. There are no expensive scrubbers necessary to remove these emissions, as is the case with coal. Fuel and clean air technology are expenses that are not necessary with wind generation.
The disadvantages of wind generation are very big issues. While there are no operating expenses with fuel and clean air requirements, the cost per kilowatt of installed capacity is relatively high. In any production business plan, both the original capital cost and the operating cost need to be considered. When spread over a per kilowatt-hour of production, wind energy, even with existing federal assistance, is still higher to produce than coal-fired energy. More important than the cost, however, is the value of the output. Electricity cannot be produced like wheat and stored until demand is high enough to command a decent price. The production of electricity and its use is simultaneous. The electricity we use at this minute is being produced at this minute. The biggest challenge in the electricity business is having enough production to serve everyoneâ€™s needs during peak usage periods. It may be that the wind is not blowing during these peak periods and cannot be counted on when needed the most. This is what we call non-firm power, which has a lesser value than firm power.
It is good that wind generators are being built and that everyone is learning more about how they may fit into the overall energy mix. Because wind energy is not firm, it will not replace existing firm generation and resolve peak capacity needs here, in California, or anywhere else. Base load and peaking plants will be needed to meet these needs. Wind energy will provide supplemental energy to our base load plants, and time will tell just how valuable this energy will be.