Richmond Times-Dispatch Article
Wind power
Atlantic Renewable Energy is a major force on the East Coast
September 23, 2002
BY GREG EDWARDS
TIMES-DISPATCH STAFF WRITER
Sailing.
What else would Theo J. deWolff place at the top of his list of hobbies? Wind is a big part of his life.
The 41-year-old Friesland native is a principal partner in Atlantic Renewable Energy Corp., a Henrico-based company that has helped pioneer the development of wind energy in the eastern United States.
In 2000 and 2001, four projects developed by the company went online in New York and Pennsylvania. Together, they can generate 65.5 megawatts of electricity, enough to power 22,000 homes. They represent more than 70 percent of all wind power in the East.
[Dutch-born Theo J. deWolff is a partner in a Henrico County firm, Atlantic Renewable Energy Corp., that pioneered wind energy products. He holds a windmill model. (ALEXA WELCH EDLUND)]
In June, the company sold a 66-megawatt, yet-to-be-completed wind farm project that it had developed in West Virginia to FPL Energy LLC, an affiliate of Florida Power & Light. The project consists of 44 giant windmills that will be spread over 4,400 acres on Backbone Mountain near Thomas, W.Va.
"[Atlantic] has demonstrated that there is a market in the eastern United States for wind energy," said Randy Swisher, executive director of the Washington-based American Wind Energy Association. The association gave Atlantic an award for commercial achievement at the group's annual meeting in Portland, Ore., in early June.
DeWolff and partner Bill Moore both had a working background in wind energy with other companies before they founded Atlantic in 1998.
DeWolff, who has a business and engineering education, lived his first three decades in the northern Netherlands where wind power was part of the landscape. The Dutch have used windmills for centuries to grind grain or pump water and, in recent years, to generate electricity.
He moved to the Richmond area in 1991. His wife is the former Lisa Downing of Hanover County.
At first, deWolff represented NEG Micon, a Danish manufacturer of wind turbines, and also did some project management for European construction companies.
His work with the Danish company often took him out West, where most U.S. wind projects are located. The travel put a strain on his family life, which gave him reason to look for work closer to home.
DeWolff and Moore, to whom he had sold equipment for a wind project in Central America, saw with the coming of electric deregulation an opportunity for wind energy development in the eastern United States. The East, deWolff said, had been largely ignored by other wind-energy developers.
Atlantic's focus has been on mid-Atlantic and Northeastern energy markets. In the East, the winds tend to be better at higher elevations. And for that reason, the company's projects have been built near Syracuse, N.Y., and in the Appalachian Highlands, an area where the states of West Virginia, Pennsylvania and Maryland come together.
DeWolff explained that his company does the pioneering work on projects, such as finding sites for windmills, providing engineering and obtaining the required permits. Then, when it comes time to build, it sells the projects or brings in a larger company to provide financing.
This groundwork, which deWolff says his company can do better than a larger corporation, provides seven-employee Atlantic its niche, he said.
Atlantic built its first project, called Madison, in New York in 2000. The company sold the 11.5-megawatt wind farm to Pacific Gas & Electric, a West Coast company that had previously bought traditional power plants in the Northeast. A subsidiary of a giant Italian utility bought the company's other New York project.
Atlantic has located most of its projects in Northeastern states because the electric transmission grids there were set up to handle power traded on the open market. "You can put a project up, but you have to sell the power," deWolff said.
His company is considering locating a project around 2004 in Bath, Highland or Augusta County in western Virginia where the transmission grid is part of the PJM Interconnection, a power market to the north.
"You might see some stuff on the Eastern Shore, too," he said. And in four or five years, some off-shore wind farms may be developed along the Jersey coast, he said. A small project by a German company, ProVento, has already been proposed for a Northampton County industrial park.
One of the main drivers of the wind-energy business now is government tax credits. It takes a larger company to take advantage of those credits, deWolff said. Producers of wind energy can earn a tax credit of 1.8 cents per kilowatt hour, which comes out to about $75,000 annual credit for a single 1.5-megawatt windmill.
The federal tax credit was to expire next year, but the new federal energy bill now in a congressional conference committee extends it for three more years. If a company can get a wind project up and running before the credit expires, it will receive the credit for the first 10 years of the project's operation.
The energy bill may also give wind energy a boost in another significant way. The version of the bill passed by the Senate would require energy companies to provide an electricity generation mix that would include at least 10 percent renewable energy, such as wind power, by 2020.
Some states already require power companies to include renewable energy in their mix of power-generation facilities, but Virginia is not one of them.
Two weeks ago, the state of New York, which has an aggressive renewable energy requirement, awarded $17 million in grants to developers of five wind farms. DeWolff's firm got the largest grant, $5 million, to help it develop a 100-megawatt wind farm in Lewis County, N.Y.
The upfront costs for wind power run around three times higher than for traditional fossil-fuel power generation, deWolff said. A windmill that will produce about 1.5 megawatts of electricity will cost about $1.75 million to build.
But, he points out, the operational costs are cheaper. There's no fuel to buy and no fuel-adjustments to be made to rates. The power sells for about a 20 percent premium over fossil-fuel generation.
Windmills can't provide firm supplies of electricity, which is electricity that is required in set amounts on a consistent basis, because wind generation over short periods can be inconsistent. But over the course of a year, the output from a windmill can be predicted to within a plus or minus 5 percent, deWolff said. "We produce power when the wind blows," he said.
Despite the higher costs, renewable energy is in demand because of public concerns about the effect of fossil fuels on the environment.
Washington Gas Energy Services, for instance, will be obtaining some of the electricity that is generated by the Atlantic-developed wind farm in Thomas, W.Va., and selling it to Catholic University. The school has signed a five-year contract to acquire 12 percent of its energy needs from wind power.
"We are committed to improving the environment through the use of green technologies such as cost-efficient wind power," said the Rev. David M. O'Connell, Catholic University's president.
When compared to fossil-fuel electricity generation, it's estimated the Thomas, W.Va., project will avoid 200 million pounds annually of carbon dioxide emissions or the equivalent of taking 14,000 cars off the road.
Dominion, parent of Virginia's largest electric utility, is considering building a wind-farm project of its own near its coal-fired power station at Mount Storm, W.Va. The Dominion project would be not far from the one that Atlantic sold to FPL Energy.
"We have not made a definite decision yet," said Dominion spokesman Dan Genest. But Dominion has filed for all the permits that it will need for the project from the state of West Virginia for a wind farm of from 40 to 45 windmills.
Windmills produced only 10 megawatts of electricity in the United States in 1983. A period of growth occurred during the 1980s, particularly in California, and windmill activity picked up again in the late 1990s.
According to the Wind Energy Association, a total of 4,300 megawatts of wind generation was in operation by the end of last year. The group predicts an additional 2,000 megawatts will be added next year alone.
"The market is taking off for this technology, said Swisher, whose association's membership has more than doubled in the past two years. Proof, perhaps, that wind power is being taken more seriously is the involvement of big corporate players in the industry such as Chevron-Texaco, American Electric Power and General Electric, which bought Enron's wind-power equipment business.
Despite the growing enthusiasm for wind power, some wind-farm proposals in the East have stirred controversy. One proposed in Cherry Valley, N.Y., near Otsego Lake by a subsidiary of a German company has split local residents; and proposed projects on Long Island and in Nantucket Sound near Cape Cod generated strong local opposition. (See related story on Page D18)
Because of the link between his business and the environment, environmental controversy is not something that deWolff wants around his projects.
That may seem hard to avoid, considering windmills can stand as high on a ridge line as a 30-story building. But the towers have an artistic quality and power lines running from them are buried.
For farmers willing to locate windmills on their land, they essentially have an extra crop, "a crop in the air," to cultivate, deWolff said. Farmers can earn royalties of $3,000 per windmill per year, he said.
One of the biggest obstacles he's had to overcome in developing projects, deWolff said, is having to convince local people that he's not joking when talking about wind power. Often, too, local laws and regulations have to be redrawn to accommodate wind power, he said.
"Anywhere we go, it's kind of new terrain," deWolff said.
Contact Greg Edwards at (804) 649-6390
For More Information Contact:
Atlantic Renewable Energy Corporation
3311 Church Road, Suite 210 Richmond, VA 23233
Tel: (804) 965-9530
FAX: (703) 995-0770
Internet: info@atlantic-renewable.com
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