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Merchant wind power (MWP) is a framework of developing electricity from wind turbines placed on land owned by brown-field sites, such as those of heavy industry. The wind-turbine operators then supply the land owners with power at reduced rates.
The phrase was originally coined by Ecotricity, a UK-based, renewable energy company and wind developer. This has created a market where MWP companies install and operate the turbines on brown field sites, with site owners leasing land to the operator and purchasing green electricity at reduced rates.
In most cases the development, installation and operation of the turbine site is carried out by a company specialising in merchant wind power who effectively own and operate the turbines, taking all the financial risk required such as paying for procurement of turbines, installation cost etc.
Merchant power plant development began in the United States in 1998 with fossil fuel generation projects. [1] [2] In 2000, the first merchant wind plant constituted a signal that wind power costs had declined sufficiently to support investment in wind power without reliance on off-take contracts. [3]
In the United States, "merchant power" refers to electric power generation plants built to serve spot electricity markets, without reliance on off-take contracts. Typically, power plants in the US are built based on long-term (10–20 years) contracts or "power purchase agreement" with a wholesale purchaser (such as a regulated utility or power marketing firm). Such arrangements allow for more favorable financing, as lenders and investors are more certain of future plant revenues when a credit-worthy utility agrees to purchase all or most future output at pre-defined prices (note, price may not be fixed, and can be defined either based on broad inflationary indices or linked to related commodity markets). However, in a merchant power arrangement, the plant is built without prior commitment of its output to contractual off-takers. Instead, the power is sold on a spot or short-term contract basis, such as on the PJM Interconnection, NYISO, or ISO-NE independent system operator power markets that have developed in the Northeastern US.
The 11MW wind farm in Madison, New York was the first merchant wind power plant in the United States. It was developed by the unregulated arm of PG&E by Laura Walker. [4]
Enron had planned to build the first merchant wind power plant in the country. [5] However, prior to beginning operation in June 1999, [6] the 16.5MW California plant [7] entered into a power purchase agreement for its output. [8] PG&E Generating Company's Madison Windpower Project began commercial operation in New York in October 2000 [9] without relying on a power purchase agreement—thus making it the first pure merchant wind power plant in the country. [10]
Another example of a merchant wind farm exists in the UK at Green Park [11] which is situated on the M4 motorway in Reading.
The Dabhol Power Company was a company based in Maharashtra, India, formed in 1992 to manage and operate the controversial Dabhol Power Plant. The Dabhol plant was built through the combined effort of Enron as the majority share holder, and GE, and Bechtel as minority share holders. GE provided the generating turbines to Dabhol, Bechtel constructed the physical plant, and Enron was charged with managing the project through Enron International. From 1992 to 2001, the construction and operation of the plant was mired in controversies related to corruption in Enron and at the highest political levels in India and the United States. The price that the state electricity board would have to pay for electricity produced by DPC was more than 20 times what it paid for hydroelectricity.
The AES Corporation is an American utility and power generation company. It owns and operates power plants, which it uses to generate and sell electricity to end users and intermediaries like utilities and industrial facilities. AES is headquartered in Arlington, Virginia, and is one of the world's leading power companies, generating and distributing electric power in 15 countries and employing 10,500 people worldwide. AES Corporation is a global Fortune 500 power company. AES Ranks in the Top Ten of Fast Company's 2022 Best Workplaces for Innovators.
Wind power in California had initiative and early development during Governor Jerry Brown's first two terms in the late 1970s and early 1980s. The state's wind power capacity has grown by nearly 350% since 2001, when it was less than 1,700 MW. In 2016, wind energy supplied about 6.9% of California's total electricity needs, or enough to power more than 1.3 million households. Most of California's wind generation is found in the Tehachapi area of Kern County, California, with some large projects in Solano, Contra Costa and Riverside counties as well. California is among the states with the largest amount of installed wind power capacity. In recent years, California has lagged behind other states when it comes to the installation of wind power. It was ranked 4th overall for wind power electrical generation at the end of 2016 behind Texas, Iowa, and Oklahoma. As of 2019, California had 5,973 megawatts (MW) of wind power generating capacity installed.
China is the world leader in wind power generation, with the largest installed capacity of any nation and continued rapid growth in new wind facilities. With its large land mass and long coastline, China has exceptional wind power resources: it is estimated China has about 2,380 gigawatts (GW) of exploitable capacity on land and 200GW on the sea. Wind power remained China's third-largest source of electricity at the end of 2021, accounting for 7.5% of total power generation.
Making up over 62% of the state's generated electricity in 2022, wind power is the largest source of electricity generation in Iowa. In 2020, over 34 billion kWh of electrical energy was generated by wind power. As of 2022, Iowa has over 12,200 megawatts (MW) of installed capacity with over 6,000 wind turbines, ranking 2nd and 3rd in the nation below Texas respectively.
A power purchase agreement (PPA), or electricity power agreement, is a long-term contract between an electricity generator and a customer, usually a utility, government or company. PPAs may last anywhere between 5 and 20 years, during which time the power purchaser buys energy at a pre-negotiated price. Such agreements play a key role in the financing of independently owned electricity generators, especially producers of renewable energy like solar farms or wind farms.
The Madison Wind Farm is a power generation plant located in the town of Madison, New York. Constructed in 1999-2000, it was the first wind farm completed in New York state and the first merchant wind farm in the country. The power plant consists of seven Vestas V66-1.65 MW wind turbines, generating enough energy to power up to 10,000 homes. The Vestas V66-1.65 MW wind turbines have a hub height of 67m and a 66m rotor diameter totally 100m to the top of the rotor
The wind power industry is involved with the design, manufacture, construction, and maintenance of wind turbines. The modern wind power industry began in 1979 with the serial production of wind turbines by Danish manufacturers. The industry is undergoing a period of rapid globalization and consolidation.
As of April 2020, the energy sector in Senegal has an installed capacity of 1431 megawatts (MW). Energy is produced by private operators and sold to the Senelec energy corporation. According to a 2020 report by the International Energy Agency, Senegal had nearly 70% of the country connected to the national grid. Current government strategies for electrification include investments in off-grid solar and connection to the grid.
EDF Renewables is a wholly owned subsidiary of the French utility EDF Group, specializing in renewable energy production. As an integrated operator, the Group develops and finances the construction of renewable energy facilities, and manages operations and maintenance for its own account and for third parties.
GE Wind Energy is a branch of GE Renewable Energy, a subsidiary of General Electric. The company manufactures and sells wind turbines to the international market. In 2018, GE was the fourth largest wind turbine manufacturer in the world.
Alterra Power Corp. a subsidiary of Innergex Renewable Energy Inc., is a diversified renewable power generation company based in Vancouver, British Columbia, Canada. It was formed in 2011 through the merger of Magma Energy Corp. and Plutonic Power Corp. It develops, owns, acquires and operates hydroelectric, wind, solar energy and geothermal projects. On February 6, 2018, Innergex Renewable Energy Inc. completed the acquisition of Alterra including all its assets.
In 2016, Arizona had 268 megawatts (MW) of wind powered electricity generating capacity, producing 0.5% of in-state generated electricity.
James G.P. Dehlsen is an American businessman, inventor, and entrepreneur. He is a pioneering figure in wind power and renewable energy development in the United States and holds 25 patents.
Energy in Greece is dominated by fossil gas and oil. Electricity generation is dominated by the one third state owned Public Power Corporation. In 2009 DEI supplied for 85.6% of all electric energy demand in Greece, while the number fell to 77.3% in 2010. Almost half (48%) of DEI's power output in 2010 was generated using lignite. 12% of Greece's electricity comes from hydroelectric power plants and another 20% from natural gas. Between 2009 and 2010, independent companies' energy production increased by 56%, from 2,709 Gigawatt hour in 2009 to 4,232 GWh in 2010.
Stockyard Hill Wind Farm is a wind farm project in Victoria (Australia). In May 2022 the project achieved its 5th hold point test, and was approved by the Australian Energy Market Operator and Network Services Provider to generate up to 400MW into the National Electricity Market. When it is fully commissioned, it is expected to produce up to 530MW, which would be Australia's largest wind farm.
The electricity sector of Kosovo relies on coal-fired power plants and is considered one of the sectors with the greatest potential of development. The inherited issues after the war in Kosovo and the transition period have had an immense effect on the progress of this sector.
Neoen is a French producer of exclusively renewable energy headquartered in Paris, France. Founded in 2008, it develops, finances, builds and operates solar power plants, wind farms and energy storage solutions. As at 31 December 2021, the company's total capacity was 5.4 GW, made up of 50% solar, 38% wind and 12% battery storage. Neoen aims to attain 10 GW in operation and under construction by 2025.
ACEN Corporation, formerly AC Energy, is the energy firm under the Ayala Group. The company has over 4,000 MW of attributable capacity in the Philippines, Vietnam, Indonesia, India, and Australia, with a renewable share of 98% which is among the highest in the region.
Enel North America is an American company headquartered in Andover, MA, United States. One of the largest renewable energy operators in North America, it was formed as a subsidiary of the global utility Enel S.p.A. in 2000. It has operations in the United States and Canada through its renewables and advanced energy services businesses, with a portfolio including over 9.6 GW of renewable capacity, 160,000 EV charging stations, 4.7 GW of demand response capacity and 14 utility-scale battery energy storage systems, totaling 1,416 MWh of capacity under construction or in operation. It serves a customer base of over 4,500 businesses, utilities, and cities in North America.