The idea of producing electricity from wind turbines is just lovely. It's like love at first sight. It's intriguing. It's like childhood memories of stories about Holland. Remember Hans Brinker skating by the windmill?

But remember the awful time we had with wind turbine technology in the 70s and 80s? It wasn't beguiling or intriguing. It was an unmitigated disaster, and an expensive one to boot.

So, let me say at the outset that the technology is remarkably better than just a few years ago. It's like the difference between a Model T and a new Taurus. The blades are better designed, the composite materials are from a different age, and the controls are better. We're even putting the turbines higher where the wind is more likely to be blowing, and the turbines operate at lower and higher wind speeds.

It's still expensive, however, and I'm not at all sure that people are really willing to pay a premium for wind energy over the long-term. In the limited experience we have nationally, many consumers say they would be willing to pay more for electricity from a renewable resource, but when it comes time to actually pay the premium, only 2 to 6 percent do. Even so, there's no assurance that this small group will pay a premium for 15 to 20 years, the period of time over which we'd have to finance a wind project. I just don't think it's a "bankable" proposition.

Nonetheless, there may be ways to see the market develop. And if we can help that without putting cooperative members at too great a risk, it may be worthwhile.

Wind energy is the fastest-growing form of renewable energy in the United States. With increased government encouragement and dramatic improvements in wind turbine technology, production of electricity from wind turbines more than doubled between 1991 and 2002.

Here in Illinois there are a couple of areas with viable class 4 winds, the lowest "utility grade" wind classification. Other states, like North Dakota, have more abundant wind resources with class 7 winds. In Illinois, only areas in Pike, Adams and Bureau counties have class 4 winds, according to estimates by the National Renewable Energy Laboratory.

Our cooperative, Illinois Rural Electric Cooperative, serves Pike County. We are currently gathering precise wind data on our own and in cooperation with another company, Innoventor Engineering, Inc. The good news is we've found that the summertime wind data looks better than we expected. But there's no assurance that over the long-term, wind is going to be blowing when we set our monthly or annual peak demand levels.

That's why the price of wind energy has to compete with the energy component in our monthly wholesale bill. Wind energy is not going to affect our base demand; it may not affect our incremental demand or transmission costs; and it's certainly not going to affect our stranded costs.

If we, as a society, want to encourage the development of a wind energy marketplace, it will take grants and/or operating subsidies and low interest loans to drive down costs from wind turbines. The cost of electricity from a wind turbine with generally favorable wind could be as much as 48 percent higher than the energy component in our wholesale bill.

The current Farm Bill has grants for renewable energy resource development and our coop is making an application. But even if we were able to get that grant to help with one turbine, we'd still need a state grant to bring the capital cost to a low enough level to compete with the (Continued on page 6)

Bruce Giffin is the General Manager of Illinois Rural Electric Cooperative, and President of the co-op's for-profit subsidiary, Illinois Rural Telecommunication Co., which provides Internet, DirecTV and propane services. He serves as Chairman of the Policy and Planning Task Force of the Cooperative Research Network, the research arm of the nation's electric co-ops.

The opinions and views of guest commentators are their own and may not represent those of the Association of Illinois Electric Cooperatives or the electric co-ops of Illinois.

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energy component of the present and foreseeable wholesale energy market. The income tax credits may be attractive, but we're not now certain that they will be offered or available over the life of any financing we'd need to build a turbine. If they are going to be useful, they need to be for the life of the project.

Over time we should be able to get more than 1 percent of our national electricity needs from wind. But right now, we will have to underwrite the development cost of wind energy and of other renewable resources. Just as we need to make national investments in clean coal technology and other resource options, we need sensible investments in renewable energy.

We can do that through grants and low interest loans that help small, innovative projects across the country. If only most of the 855 electric cooperatives across the country had at least one small renewable energy project, I believe we could make a substantial contribution to the development of a truly viable market for renewable energy to the benefit of the rural community. That's where, after all, the renewable resources, such as wind and biomass are found.

Renewable Energy Consumption in the Nation's Energy Supply

Renewable energy forms 6 percent of the nation's energy supply and is consumed mainly in the production of electricity, but in 2001, 35 percent was used to produce useful thermal output and 2 percent —mostly ethanol—was consumed by the transportation sector.

Source: Renewable Energy Annuel 2001; Energy Information Administration

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