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Wind
Wind Power Business Models
With record worldwide installations of wind turbines in 2001 and forecasts of capacity doubling by 2005, the global wind industry is optimistic. Wind power's strong growth trajectory, its success in attracting prominent corporate investment, and an increasingly favorable regulatory climate suggest that utility investment in wind energy will be an increasingly viable strategic choice.
Utilities can make use of several different investment mechanisms to begin diversifying generation portfolios, marketing a green energy product, or complying with a procurement mandate (such as a renewable portfolio standard). Each option has a different risk/benefit profile. For more information on the benefits and costs of each models, see the Project Decisions section.
Wind businees options include
- Make a contractual agreement with an independent power provideror a power aggregator to purchase rate-based power. As its costs continue to drop, wind power be a cost-effective addition to generation mixes.
- Enter a contractual agreement with an Independent Power Provider to purchase wind electrons for retail marketing of a premium green energy product to commercial and residential customers. The utility then must implement a cost-effective marketing program to maintain the customer base needed to cover the contracted price of wind power.
- Make a capital investment in a merchant generating facility for internal or merchant power supply. This option is high-risk, as the investor utility bears all capital, operating, and power-delivery responsibilities, including possible utility penalties for nondelivery of power.
- Purchase "green tags" for renewable energy credit or resale to customers.
- Retail small wind systems to rural residential and commercial customers. As with photovoltaic systems, utilities can sell customers small-scale turnkey wind power services for on-site power supply.
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