Innovative Wind Financing

Vital Statistics

Offsets: 24,000 metric tons carbon dioxide
Equivalent to taking 4,781 cars off the road for a year
Project Type: Renewable Energy
Project Lifetime: 10 year project, completed in 2
Location: Oregon and Washington
Project Partners: Bonneville Environmental Foundation

Project Description

This contract generated offsets from a Bonneville Environmental Foundation project that generated electricity from wind farms in Oregon and Washington. The Bonneville Environmental Foundation (BEF) and The Climate Trust shared the costs of a joint purchase of the “pollution-avoiding” benefits from a wind farm. The organizations purchased the environmental benefits of wind power, called Green Tags, by paying the extra cost of wind power over grid power. This transaction is unique because the CO₂ reductions are being separated from the other environmental benefits and transferred to The Climate Trust, which retires the CO₂ reductions rather than use them in any future trading system of credits. BEF retired the other benefits as well.

The project was supposed to be a 10 year purchase beginning in January 2002; however BEF delivered all of the metric tons of CO₂ eight years ahead of schedule.

How the project reduces CO₂

The electricity generated by the co-funded wind facility displaced electricity that otherwise would have been generated by burning fossil fuel at other power plants. The Climate Trust will hold the carbon dioxide (CO₂) offsets in trust and not sell them to companies for use in meeting air emissions regulations. BEF retains and will retire the remaining environmental benefits, or Green Tags, including reductions of nitrogen oxide, carbon monoxide, mercury, and other pollutants. The Green Tags are being purchased from the Bonneville Power Administration (BPA) and came from three new wind projects across Oregon and Washington. The Green Tag revenue received by BPA will be reinvested in the next round of renewable energy projects to serve Northwest electricity users.

Non-GHG Benefits

• This project serves as a model for environmentally-minded organizations to cooperatively finance climate-safe power

Additionality Criteria: Why We’re Involved

The Climate Trust’s funding allowed BEF to reinvest funding into more wind power facilities in the Northwest.

Partners

• Bonneville Environmental Foundation

• "The electricity generated by the co-funded wind facility displaced electricity that otherwise would have been generated by burning fossil fuel at other power plants."
  
  That may or may not be the case (if the amount of wind is a small enough percentage, the grid most likely just allows the line voltage to rise withing tolerable limits). Isn't the true measure, however, the amount of fuel burning that is reduced? The calculation of displacement has to account for: 1) the preference of hydro to balance wind; 2) switching thermal plants to standby, in which they still burn fuel to stay warmed up and ready to switch back to generation; 3) the extra fuel necessary for more frequent ramping or less efficient operation of those plants that are able to switch more quickly; and 4) the likelihood that the addition of wind energy is simply absorbed as a tolerable rise in line voltage.
  
  These factors may explain why there is no evidence from anywhere in the world that wind energy on the grid actually reduces fossil fuel use or emissions, despite more than a decade of extensive experience, and casts serious doubt on wind's green credentials.

  by Rosa Goldman - 9/19/2007 1:57:26 PM