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Market for wind power picks up speed

Though still a tiny fraction of overall energy consumption in the U.S.,  wind power is the fastest growing renewable energy source out there. Big improvements in turbine generators have made wind power economically competitive with fossil fuels. By CNBC's Melissa Lee.
/ Source: CNBC

It's just half a percent of total energy consumption in the U.S., but wind power is the fastest growing renewable energy source out there -- in terms of usage and capacity.

At Whole Foods' flagship store here -- all 80,000 square feet -- the fish coolers, the wood-fired pizza ovens, the lights above the produce, and every store nationwide, is effectively powered by wind.

“Just standing here you realize all this cold is just coming out, and emanating into the store … We do use a lot of energy," said Michael Besancon, president of the company's southern Pacific region. “We've got an obligation then to mitigate the impact of that on the environment."

How is Whole Foods getting in the wind game? With credits for about half a million megawatt-hours of wind-generated electricity, bought from a broker, who then buys an equal amount of wind power, which then gets pumped into the national grid.

The cost to Whole Foods is a slight premium to fossil-fuel electricity. But the true savings are the 700 million pounds of carbon dioxide pollution that won't be generated this year.

“We hope that we're taking a leadership position that will be followed,” said Besancon. “And that we are showing that you can do it.”

More and more companies are, as wind prices have dropped by about 80 percent since the 1980's. With the average cost per kilowatt hour at about seven cents, wind is now economically competitive with fossil fuels.

Vic Abate, vice president of General Electric's Renewable Energy division, says technology is behind that price drop. (GE is the parent company of CNBC.)

“Ten years ago, the capacity factor for a wind turbine was about 20 percent,“ he said. “Today the wind turbines we are shipping are over 30 percent in capacity factors -- illustrating the efficiencies of the technology and controls advancements. There's been advancements in size, in scale of the wind turbines. For example, about 10 years ago, they were putting about half the power per turbine that they are putting out today. And the other element has been the efficiency.”

By using gauges to measure wind speed and direction, wind turbines maximize the power they generate, according to Shane Long, a manager at GE's wind turbine assembly plant.

“Based on the inputs by the anemometer and the wind vane, the top box will make some changes to the machine head, in order to keep it into the wind .. it finds the wind," Long says.

Demand is so brisk that GE has sold out 100 percent of 2006 production and 80 percent of 2007. In fact, there's a building boom underway. Last year, wind power capacity soared 35 percent in the U.S. and the build this year is expected to be bigger.

Still, there's not enough wind to go around. Here in Austin, the city's utility offers a program that lets businesses lock in wind prices for 10 years. It's now turning new customers away until a new farm is built. And it's holding a drawing for its remaining supply.

“We've received bins and bins of application cards,” said Michael McClusky, a senior executive with Austin Energy. “A lot of customers hoping to be the ones whose names get drawn.”

Advanced Micro Devices is one of 400 businesses already signed up.

“We're up to 100 percent of our total usage in Austin's green energy,” said Craig Garcia, AMD's director of global corporate services. “And we expect it to yield about a $5 million savings over 10 years.”

But for most businesses, choosing wind is not just about dollars and cents. At Whole Foods, said Besancon, it’s fits with the company’s corporate image.

“It fits into right thing to do,” he said.

Right for the bottom line, and for the environment -- a winning proposition for corporate America.