Wind Energy

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Wind Energy

• Stephen R. Lawrence
• Leeds School of Business
• University of Colorado
• Boulder, CO

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Acknowledgement
Adapted from a presentation by Keith
Stockton Environmental Studies University of
Colorado Boulder, CO
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Ancient Resource Meets 21st Century
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Wind TurbinesPower for a House or City
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Wind Energy Outline

• History and Context
• Advantages
• Design
• Siting
• Disadvantages
• Economics
• Project Development
• Policy
• Future

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History and Context
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Wind Energy History

• 1 A.D.
• Hero of Alexandria uses a wind machine to power
  an organ
• 400 A.D.
• Wind driven Buddhist prayer wheels
• 1200 to 1850
• Golden era of windmills in western Europe
  50,000
• 9,000 in Holland 10,000 in England 18,000 in
  Germany
• 1850s
• Multiblade turbines for water pumping made and
  marketed in U.S.
• 1882
• Thomas Edison commissions first commercial
  electric generating stations in NYC and London
• 1900
• Competition from alternative energy sources
  reduces windmill population to fewer than 10,000
• 1850 1930
• Heyday of the small multiblade turbines in the US
  midwast
• As many as 6,000,000 units installed
• 1936
• US Rural Electrification Administration extends
  the grid to most formerly isolated rural sites
• Grid electricity rapidly displaces multiblade
  turbine uses

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Increasingly Significant Power Source
Wind could generate 6 of nations electricity by
2020.
Wind currently produces less than 1 of the
nations power. Source Energy Information Agency
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Manufacturing Market Share
Source American Wind Energy Association
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US Wind Energy Capacity
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Installed Wind Turbines
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Colorado Wind Energy Projects
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New Projects in Colorado
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Ponnequin 30 MW

• Operate with wind speeds between 7-55 mph
• Originally part of voluntary wind signup program
• Total of 44 turbines
• In 2001, 15 turbines added
• 1 MW serves 300 customers
• 1 million dollars each
• 750 KW of electricity each turbine
• Construction began Dec 98
• Date online total June 1999
• Hub height 181 ft
• Blade diameter 159 ft
• Land used for buffalo grazing

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Wind Power Advantages
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Advantages of Wind Power

• Environmental
• Economic Development
• Fuel Diversity Conservation
• Cost Stability

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Environmental Benefits

• No air pollution
• No greenhouse gasses
• Does not pollute water with mercury
• No water needed for operations

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Pollution from Electric Power
Source Northwest Foundation, 12/97
Electric power is a primary source of industrial
air pollution
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Economic Development Benefits

• Expanding Wind Power development brings jobs to
  rural communities
• Increased tax revenue
• Purchase of goods services

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Economic Development Example
Case Study Lake Benton, MN 2,000 per 750-kW
turbine in revenue to farmers Up to 150
construction, 28 ongoing OM jobs Added 700,000
to local tax base
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Fuel Diversity Benefits

• Domestic energy source
• Inexhaustible supply
• Small, dispersed design
• reduces supply risk

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Cost Stability Benefits

• Flat-rate pricing
• hedge against fuel price volatility risk
• Wind electricity is inflation-proof

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Wind Power Design
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Power in the Wind (W/m2)
Density P/(RxT) P - pressure (Pa) R -
specific gas constant (287 J/kgK) T - air
temperature (K)
Area ? r2
Instantaneous Speed (not mean speed)
kg/m3
m2
m/s
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Wind Energy Natural Characteristics

• Wind Speed
• Wind energy increases with the cube of the wind
  speed
• 10 increase in wind speed translates into 30
  more electricity
• 2X the wind speed translates into 8X the
  electricity
• Height
• Wind energy increases with height to the 1/7
  power
• 2X the height translates into 10.4 more
  electricity

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Wind Energy Natural Characteristics

• Air density
• Wind energy increases proportionally with air
  density
• Humid climates have greater air density than dry
  climates
• Lower elevations have greater air density than
  higher elevations
• Wind energy in Denver about 6 less than at sea
  level
• Blade swept area
• Wind energy increases proportionally with swept
  area of the blades
• Blades are shaped like airplane wings
• 10 increase in swept diameter translates into
  21 greater swept area
• Longest blades up to 413 feet in diameter
• Resulting in 600 foot total height

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Betz Limit

• Theoretical maximum energy extraction from wind
  16/27 59.3
• Undisturbed wind velocity reduced by 1/3
• Albert Betz (1928)

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How Big is a 2.0 MW Wind Turbine?
This picture shows a Vestas V-80 2.0-MW wind
turbine superimposed on a Boeing 747 JUMBO JET
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Wind Turbine Power Curve
Vestas V80 2 MW Wind Turbine
KW
50
40
30
20
10
MPH
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Recent Capacity Enhancements
2006 5 MW 600
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Nacelle Components
10
5
16
17
12
12

1. Hub controller 11. Blade bearing
2. Pitch cylinder 12. Blade
3. Main shaft 13. Rotor lock system
4. Oil cooler 14. Hydraulic unit
5. Gearbox 15. Machine foundation
6. Top Controller 16. Yaw gears
7. Parking Break 17. Generator
8. Service crane 18. Ultra-sonic sensors
9. Transformer 19. Meteorological gauges
10. Blade Hub

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Turbines Constantly Improving

• Larger turbines
• Specialized blade design
• Power electronics
• Computer modeling
• produces more efficient design
• Manufacturing improvements

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Improving Reliability

• Drastic improvements since mid-80s
• Manufacturers report availability data of over 95

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Wind Project Siting
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Wind Power Classes
Wind PowerClass 10 m (33 ft) 10 m (33 ft) 50 m (164 ft) 50 m (164 ft)
Wind PowerClass Speed m/s (mph) Speed m/s (mph)
1 0 0
1 4.4 (9.8) 5.6 (12.5)
2 4.4 (9.8) 5.6 (12.5)
2 5.1 (11.5) 6.4 (14.3)
3 5.1 (11.5) 6.4 (14.3)
3 5.6 (12.5) 7.0 (15.7)
4 5.6 (12.5) 7.0 (15.7)
4 6.0 (13.4) 7.5 (16.8)
5 6.0 (13.4) 7.5 (16.8)
5 6.4 (14.3) 8.0 (17.9)
6 6.4 (14.3) 8.0 (17.9)
6 7.0 (15.7) 8.8 (19.7)
7 7.0 (15.7) 8.8 (19.7)
7 9.4 (21.1) 11.9 (26.6)
Wind speed is for standard sea-level conditions.
To maintain the same power density, speed
increases 3/1000 m (5/5000 ft) elevation.
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Siting a Wind Farm

• Winds
• Minimum class 4 desired for utility-scale wind
  farm (gt7 m/s at hub height)
• Transmission
• Distance, voltage excess capacity
• Permit approval
• Land-use compatibility
• Public acceptance
• Visual, noise, and bird impacts are biggest
  concern
• Land area
• Economies of scale in construction
• Number of landowners

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Wind Disadvantages
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Market Barriers

• Siting
• Avian
• Noise
• Aesthetics
• Intermittent source of power
• Transmission constraints
• Operational characteristics different from
  conventional fuel sources
• Financing

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Wind Energy and the Grid

• Pros
• Small project size
• Short/flexible development time
• Dispatchability
• Cons
• Generally remote location
• Grid connectivity -- lack of transmission
  capability
• Intermittent output
• Only When the wind blows (night? Day?)
• Low capacity factor
• Predicting the wind -- were getting better

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Birds - A Serious Obstacle

• Birds of Prey (hawks, owls, golden eagles) in
  jeopardy
• Altamont Pass News Update from Sept 22
• shut down all the turbines for at least two
  months each winter
• eliminate the 100 most lethal turbines
• Replace all before permits expire in 13 years

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Wind Characteristics Consequences

• Remote location and low capacity factor
• Higher transmission investment per unit output
• Small project size and quick development time
• Planning mismatch with transmission investment
• Intermittent output
• Higher system operating costs if systems and
  protocols not designed properly

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Balancing Supply Demand
4500
Gas
4000
Gas/Hydro
3500
Base Load Coal
3000
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Energy Delivery
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Energy Delivery
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Wind Economics
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Wind Farm Design Economics

• Key Design Parameters
• Mean wind speed at hub height
• Capacity factor
• Start with 100
• Subtract time when wind speed less than optimum
• Subtract time due to scheduled maintenance
• Subtract time due to unscheduled maintenance
• Subtract production losses
• Dirty blades, shut down due to high winds
• Typically 33 at a Class 4 wind site

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Wind Farm Financing

• Financing Terms
• Interest rate
• LIBOR 150 basis points
• Loan term
• Up to 15 years

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Cost of Energy Components

• Cost (/kWh) (Capital Recovery Cost OM) /
  kWh/year
• Capital Recovery Debt and Equity Cost
• OM Cost Turbine design, operating environment
• kWh/year Wind Resource

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Costs Nosedive ? Winds Success
38 cents/kWh
3.5-5.0 cents/kWh
Levelized cost at good wind sites in nominal
dollars, not including tax credit
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Construction Cost Elements
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Wind Farm Cost Components
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Wind Farm Economics

• Capacity factor
• Start with 100
• Subtract time when wind speed lt optimum
• Subtract time due to scheduled maintenance
• Subtract time due to unscheduled maintenance
• Subtract production losses
• Dirty blades, shut down due to high winds
• Typically 33 at a Class 4 wind site

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Improved Capacity Factor

• Performance Improvements due to
• Better siting
• Larger turbines/energy capture
• Technology Advances
• Higher reliability
• Capacity factors gt 35 at good sites
• Examples (Year 2000)
• Big Spring, Texas
• 37 CF in first 9 months
• Springview, Nebraska
• 36 CF in first 9 months

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Wind Farm Economics

• Key parameter
• Distance from grid interconnect
• 350,000/mile for overhead transmission lines

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Wind Farm Economics

• Example
• 200 MW wind farm
• Fixed costs - 1.23M/MW
• Class 4 wind site
• 33 capacity factor
• 10 miles to grid
• 6/15 year financing
• 100 financed
• 20 year project life
• Determine Cost of Energy - COE

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Wind Farm Economics

• Total Capital Costs
• 246M (10 x 350K) 249.5M
• Total Annual Energy Production
• 200 MW x 1000 x 365 x 24 x 0.33 578,160,000 kWh
• Total Energy Production
• 578,160,000 x 20 11,563,200,000 kWh
• Capital Costs/kWh
• 3.3/kWh
• Operating Costs/kWh
• 1.6/kWh
• Cost of Energy New Facilities
• Wind 4.9/kWh
• Coal 3.7/kWh
• Natural gas 7.0/kWh
• _at_ 12/MMBtu

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Wind Farm Development
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Wind Farm Development

• Key parameters
• Wind resource
• Zoning/Public Approval/Land Lease
• Power purchase agreements
• Connectivity to the grid
• Financing
• Tax incentives

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Wind Farm Development

• Wind resource
• Absolutely vital to determine finances
• Wind is the fuel
• Requires historical wind data
• Daily and hourly detail
• Install metrological towers
• Preferably at projected turbine hub height
• Multiple towers across proposed site
• Multiyear data reduces financial risk
• Correlate long term offsite data to support short
  term onsite data
• Local NWS metrological station

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Wind Energy Variability
Source Garrad Hassan America, Inc.
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Wind Farm Development

• Zoning/Public Approval/Land Lease
• Obtain local and state governmental approvals
• Often includes Environmental Impact Studies
• Impact to wetlands, birds (especially raptors)
• NIMBY component
• View sheds
• Negotiate lease arrangements with ranchers,
  farmers, Native American tribes, etc.
• Annual payments per turbine or production based

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Wind Farm Development

• Power Purchase Agreements (PPA)
• Must have upfront financial commitment from
  utility
• 15 to 20 year time frames
• Utility agrees to purchase wind energy at a set
  rate
• e.g. 4.3/kWh
• Financial stability/credit rating of utility
  important aspect of obtaining wind farm financing
• PPA only as good as the creditworthiness of the
  uitility
• Utility goes bankrupt youre in trouble

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Wind Farm Development

• Connectivity to the grid
• Obtain approvals to tie to the grid
• Obtain from grid operators WAPA, BPA,
  California ISO
• Power fluctuations stress the grid
• Especially since the grid is operating near max
  capacity

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Wind Farm Development

• Financing
• Once all components are settled
• Wind resource
• Zoning/Public Approval/Land Lease
• Power Purchase Agreements (PPA)
• Connectivity to the grid
• Turbine procurement
• Construction costs
• Take the deal to get financed

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Financing Revenue Components
Source Hogan Hartson, LLP
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Closing the Deal

• Small developers utilize a partnership flip
• Put the deal together
• Sell it to a large wind owner
• e.g. Florida Power Light, AEP, Shell Wind
  Energy, PPM Scottish Power
• Shell and PPM jointly own Lamar wind farm
• Large wind owner assumes ownership and builds the
  wind farm

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Wind Policy
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Wind Farm Economics

• Federal government subsidizes wind farm
  development in three ways
• 1.9 /kWh production tax credit
• 33.5 subsidy
• 5 year depreciation schedule
• 29.8 subsidy
• Depreciation bonus
• 2.6 subsidy

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Tax Incentives Issues

• Small developers cant fully use federal tax
  credits or accelerated depreciation
• They dont have a sufficient tax liability
• Example
• A 200 MW wind farm can generate a 12.6M tax
  credit/year
• Small developers dont have sufficient access to
  credit to finance a 200M project

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Production Tax Credit

• 1.9/kWh Production Tax Credit
• First 10 years for producing wind generated
  electricity
• Wind farm must be producing by 12/31/07
• PTC has been on again/off again since 1992
• Results in inconsistent wind farm development
• PTC in place aggressive development
• PTC lapses little or no development
• The PTC puts wind energy on par with coal and
  significantly less than natural gas
• When natural gas gt 8.00/MMBtu
• Current prices 10 15/MMBtu

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Wind Power Policy

• Renewable Portfolio Standard
• 21 States have them
• Colorados Amendment 37
• Passed by voters November 2004
• 3 of generation from 2007 - 2010
• 5 of generation from 2011 - 2014
• 10 of generation by 2015 and beyond
• 4 of renewable generation from solar PV
• 96 of renewable generation from wind, small
  hydro and biomass
• Small utilities can opt out of program

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Renewable Energy Credits

• You subsidize wind energy when produced by
  another utility
• CU pays 0.006/kWh to Community Energy
• To power the UMC, Wardenburg and the Recreation
  Center
• Community Energy uses these funds to subsidize
  wind energy at wind farms in Lamar and in the
  upper Midwest
• Although CU isnt getting the electrons from
  these wind farms, it is in effect buying wind
  energy
• The three new buildings (Business, Law, and
  Atlas) will also be powered by wind energy

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Inconsistent Policy ? Unstable Markets
Source American Wind Energy Association
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Future Trends
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Expectations for Future Growth

• 20,000 total turbines installed by 2010
• 6 of electricity supply by 2020

100,000 MW of wind power installed by 2020
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Future Cost Reductions

• Financing Strategies
• Manufacturing Economy of Scale
• Better Sites and Tuning Turbines for Site
  Conditions
• Technology Improvements

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Future Tech Developments

• Application Specific Turbines
• Offshore
• Limited land/resource areas
• Transportation or construction limitations
• Low wind resource
• Cold climates

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The Future of Wind - Offshore

• 1.5 - 6 MW per turbine
• 60-120 m hub height
• 5 km from shore, 30 m deep ideal
• Gravity foundation, pole, or tripod formation
• Shaft can act as artificial reef
• Drawbacks- TD losses (underground cables lead to
  shore) and visual eye sore

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Wind Energy Storage

• Pumped hydroelectric
• Georgetown facility Completed 1967
• Two reservoirs separated by 1000 vertical feet
• Pump water uphill at night or when wind energy
  production exceeds demand
• Flow water downhill through hydroelectric
  turbines during the day or when wind energy
  production is less than demand
• About 70 - 80 round trip efficiency
• Raises cost of wind energy by 25
• Difficult to find, obtain government approval and
  build new facilities
• Compressed Air Energy Storage
• Using wind power to compress air in underground
  storage caverns
• Salt domes, empty natural gas reservoirs
• Costly, inefficient
• Hydrogen storage
• Use wind power to electrolyze water into hydrogen
• Store hydrogen for use later in fuel cells
• 50 losses in energy from wind to hydrogen and
  hydrogen to electricity
• 25 round trip efficiency
• Raises cost of wind energy by 4X

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U.S. Wind Energy Challenges

• Best wind sites distant from
• population centers
• major grid connections
• Wind variability
• Can mitigate if forecasting improves
• Non-firm power
• Debate on how much backup generation is required
• NIMBY component
• Cape Wind project met with strong resistance by
  Cape Cod residents
• Limited offshore sites
• Sea floor drops off rapidly on east and west
  coasts
• North Sea essentially a large lake
• Intermittent federal tax incentives

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Nantucket Project
130 turbines proposed for Nantucket Sound
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Hawaiian Wind Farm Shock Absorber

• Install on 2.4 MW wind farm on Big Island of
  Hawaii
• Utilizes superconducting materials to store DC
  power
• Suddenly increased and decreased wind power
  output
• Likely to loose efficiency due to AC-DC-AC
  conversions

"Utility Scale Wind on Islands," Refocus, Jul/Aug
2003, http//www.re-focus.net
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Where Can Coloradans Buy Wind?
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Oceanic Energy

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