"The opportunity out there is tremendous, especially since the industry is only now just coming to those areas," he said.

As for California, Zilkha said that "when it makes sense economically," his firm would invest in additional wind turbines. He added that the company would continue to upgrade and modernize turbines it already owns.

New economics

Even as recently as the mid-1990s, wind power was still almost twice as expensive as conventionally generated electricity, according to Arthur O'Donnell, editor and associate publisher of the Bay Area-based California Energy Markets Newsletter. Operators of wind farms had little incentive to put the millions of dollars in up-front investments needed to modernize their turbines.

As a result, industry analysts say, wind power has only been a force at the margins of the California energy market. It cost 10 cents or more per kilowatt-hour to generate electricity from wind, compared with 2 cents to 4 cents for more conventional means.

Bigger turbines with more efficient wind-to-electricity conversion rates and precise computer controls have finally pushed the price of wind power down to about 5 cents per kilowatt-hour. That's lower than the 6.9 cents that Gov. Gray Davis has announced as the average price of long-term power contracts that the state recently negotiated.

In the three years since its inception, Zilkha Renewable Energy has, with other investors, bought up 600 windmills in the Altamont Pass east of Oakland, which is the state's largest wind power region. When all the windmills are operating at peak efficiency, their turbines can produce about 90 megawatts of electricity, the equivalent of a mid-sized power plant and enough to power about 68,000 homes.

Zilkha Renewable Energy also has stakes in wind power projects in Britain and Costa Rica, totaling another 75 megawatts.

Yet, while these may sound like impressive figures, they really represent only a drop in the bucket. California's total generating capacity is about 40,000 megawatts, while peak demand often tops 50,000 megawatts. Existing wind power projects throughout the state only account for a fraction of this about 1,800 megawatts, according to the American Wind Energy Association. That means new entrant Zilkha has about a 5 percent share of the market.

However, those 1,800 megawatts are extremely important, especially as the state is expected to be caught short by up to 6,000 megawatts at times this summer. If, for example, enough new and retrofitted wind turbines were to come on line to double the output, it could be just enough to prevent rolling blackouts this summer.

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