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AEP Plans Strategic Growth in Renewable Generation; Recently Completed Wind Farm One of Nation's Largest

AEP Plans Strategic Growth in Renewable Generation; Recently Completed Wind Farm One of Nation's Largest

Published 11-20-01

Submitted by American Electric Power Company

American Electric Power (NYSE: AEP), the nation’s largest generator of electricity, made a significant foray into renewable energy with the completion of one of the nation’s largest wind farms, the first step toward strategic growth in renewable generation.

"We are actively working to increase the renewable portion of AEP’s generation portfolio, following the same model we use for any generation project - securing a contract for the power before we build the plant," said Thomas Shockley, AEP vice chairman and chief operating officer. "Growing our renewable portfolio is a strategic move on our part, based on our evaluation of the technology and the expected growth in the role that wind and renewable sources will play in meeting the nation’s energy needs."

"AEP, as the nation’s leading generator, will be involved in the development, construction and operation of renewable generation," Shockley said.

Generation is a component of AEP’s growth strategy, which focuses on the wholesale business - fuel procurement, fuel storage and transportation, generation, wholesale marketing and energy trading. AEP’s generation fleet includes plants powered by coal, natural gas, nuclear, hydro and wind.

AEP developed and owns the 150-megawatt Trent Mesa Wind Project near Abilene, Texas, which began commercial operation last summer. The wind farm, the fourth largest now operating in the United States, includes 100 wind turbines, each standing 328 feet tall - taller than a 30-story building, on approximately 8,000 acres. Construction of the wind farm cost approximately $160 million.

Trent Mesa is expected to generate more than 590 million kilowatt-hours of electricity each year, based on historic wind data for the site. The electricity, enough to meet the annual electricity needs of more than 35,000 homes, is sold to TXU Corp.

"Trent Mesa is the first significant wind farm in AEP’s generation portfolio, but we have experience with wind generation through our involvement in smaller projects," Shockley said. "Trent Mesa showcases AEP’s wide array of capabilities. We developed the project, determined the appropriate site and negotiated a long-term contract for the electricity."

Siting for wind generation requires a large tract of land with sufficient winds. Wind resources are characterized by wind-power density classes, ranging from class 1 to class 7 - the highest. Winds at Trent Mesa are primarily in class 5. Good wind resources - class 3 and above - have an average annual wind speed of at least 13 miles per hour. In addition to west Texas sites like Trent Mesa, good wind resources are found along the east coast, the Appalachian Mountain chain, the Great Plains, the Pacific Northwest, and some other locations.

Wind is an intermittent source of electricity and can’t be used for generation needed to guarantee a constant flow of electricity to consumers - a strength of coal, natural gas and nuclear generation. But wind generation is unaffected by fluctuations in fuel prices.

"Wind is a viable energy source, but it may not be the right choice for all areas," Shockley said. "It is vital for our nation’s energy security that all sources of electricity generation - coal, gas, nuclear, hydro and wind or other renewables - continue to play a role in the total generation mix."

"There is no ‘one-size-fits-all’ solution for electricity generation," Shockley said. "The best solution may vary depending on the situation or the region."

American Electric Power is a multinational energy company based in Columbus, Ohio. AEP owns and operates more than 38,000 megawatts of generating capacity, making it America’s largest generator of electricity. The company is also a leading wholesale energy marketer and trader, ranking second in the U.S. in electricity volume with a growing presence in natural gas. AEP provides retail electricity to more than 7 million customers worldwide and has holdings in the U.S. and select international markets. Wholly owned subsidiaries are involved in power engineering and construction services, energy management and telecommunications.

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