Farming the wind – a catchy phrase from the early days of wind tower projects on the Buffalo Ridge – appears to be jumping back into the mainstream of Minnesota energy talk.
Recent proof was a 63-to-3 vote by the Minnesota Senate on Feb. 7 in favor of S.F. 4, known as the Renewable Energy Standard. The bill says most Minnesota utilities will be required to generate 25 percent of their power from renewable sources by 2025.
That move would be even greater – and quicker – for the state’s largest electricity provider, Excel Energy Inc., which would be under orders to draw 30 percent from those sources by 2020.
In the Minnesota House, Community Based Energy Development legislation seems to be gaining favor as well. Both Farm Bureau and Farmers Union members are requesting assistance for farmers looking at C-BED wind energy projects as a way for them to be involved in the emerging industry.
C-BED is essentially development of wind projects with local ownership. It addresses the big question: How can some of the $13 billion Minnesotans spend annually on energy be kept in our local communities?
Steve Wagner, with the U.S. Department of Agriculture, Agricultural Research Service at Morris, said that Lincoln County’s Buffalo Ridge area – home to more than 300 wind turbines – waves goodbye to $20 million to $30 million revenue each year because the turbines there are owned by large corporations such as GE and Florida Power & Light.
Currently there are 310 turbines in Lincoln County, and opportunities for more, all across the state, are growing.
“As we learn more about wind and wind patterns, we’re finding there are “˜mini’ Buffalo Ridge areas in Minnesota,” Wagner said.
Opportunities and costs
Based on Minnesota Department of Commerce wind production maps, typical annual electricity production for a 1.65 megawatt generator on an 80-meter tower would be approximately 6,400 megawatt-hours near Lake Benton. This assumes a typical capacity factor of 40; meaning there is sufficient wind to generate electricity about 40 percent of the time.
Tower height makes a difference, too. A 100-foot tower might show an average wind velocity of 13 miles per hour, a figure that could jump to 17 mph at 260 feet. “At an electrical rate of 0.027 cents per kilowatthour, a difference of 1 mph in average wind speed amounts to nearly $3 million in the 20-year life of a 20-MW wind farm,” Wagner said.
He indicated that a 20-MW wind farm – for example, 10 towers at 2 MW each – is a typical size for a community wind farm. Developing a wind farm is a long, costly effort requiring millions of dollars just in equipment costs, however.
If, as in the example, each of those turbines cost $2 million, you’re starting at a $20 million capital investment package; that doesn’t include engineering and still doesn’t guarantee access to the electrical grid, which requires feasibility studies.
Although the utilities own the transmission grid, the Midwest Independent System Operators controls access to it. Even after completing the application process for development of a wind farm project, you still might get a “no” answer from the independent MISO.
Andrew Falk, lead man on an 18.6-MW wind project in Swift County, said “it’s a long, arduous process; starting with a $10,000 down payment for network resources, a $10,000 deposit for a feasibility study, another $50,000 for a system impact study.”
Part of the feasibility studies is a matter of determining if the additional electrical power can be marketed into the existing grid network.
According to Wagner, all of southwestern Minnesota is part of a larger Upper Midwest area that is nearing its current transmission capacity for exporting electricity into other markets. Transmission upgrades may be required to facilitate additional community wind farms.
All of this suggests that smaller projects – such as single, community turbines – might be the better direction for developing wind power in Minnesota.
The Minnesota Municipal Power Agency which just announced that it will be the first municipal power agency in the state to develop wind projects in each of its member cities. The MMPA includes Anoka, Arlington, Brownton, Le Sueur, North St. Paul, Shakopee, Winthrop and Olivia.
What a sweet deal it is for participating cities. The 1.5-MW turbines will cost $2.2 million per tower (one tower per town) and impact to consumers is expected to be zero. The MMPA applied for Clean Renewable Energy Bonds, zero interest bonds for which the federal government pays the interest to the bondholder in the form of tax credits.
Much like getting on the waiting list to build a new ethanol plant, the big wind turbines have become such a big demand product around the world that they, too, now have a waiting list. Because the MMPA already has CREBs (the money in hand), however, this eight-community project is expected to get under way this spring.
Vestas Wind, a Danish firm that has provided most of the turbines for Minnesota’s Buffalo Ridge area, is the world’s primary manufacturer of wind turbines, although a Pipestone firm will soon be manufacturing and marketing turbines as well.
According to Karen Anderson, of the American Sustainable Energy Council, Minnesota utilizes less than 0.1 percent of its wind capacity.
“In 2006, only 794 megawatts of electricity was produced in Minnesota,” she said. “Yet this state has abundant wind resources and a wind capacity of over 1 million megawatts. Your problem is ownership. Currently 70 percent of Minnesota’s wind production is owned by out-of-state interests.”
Anderson noted that Minnesota ranks fourth in the nation for its current wind power production, trailing California, Texas and Iowa.
Because of “gridlock” in terms of power transmission capabilities, plus political and economic gridlock with the MISO organization, are smaller, independent turbines – owned by communities, local investor groups, or even individual farm and home-owners – the more practical way to start farming the wind?
Andrew Falk said many communities’ local infrastructure for distributing electricity is underutilized that total avoids the headaches and complexities of seeking MISO approval.
Anderson talked in terms of seeing a wind turbine next to every water tower in Minnesota’s hundreds of small towns. “This keeps energy dollars in your community, stimulates economic development, creates jobs and most importantly utilizes a never-ending source of energy; clean air that loves to work for you and your community,” she said.
Home farm towers
David Winkelman, a Brainerd-area contractor in the small wind turbine business, said there is growing interest in the 40- to 70-kilowatt “home farm” wind tower category. “You can plug-and-play a small wind turbine most anywhere you have 100-watt power.”
He said a Jacobs 31-20 wind turbine on a 120-foot Behlen lattice tower would cost about $63,000 which includes $45,000 for equipment, $15,000 for construction and erection of the tower and about $3,000 for site plans, permits as needed, and net metering contract with your local utility.
That might sound like a lot of money, but Winkelman said this 40-kilowatt wind turbine has several income benefits. For example current tax laws permit up to $25,000 worth of depreciation. Also available is access to U.S. Department of Agriculture grants of up to $16,000 for projects this size. And through net metering you may be able to recoup several dollars of your investment cost each year by selling into your local grid any power not utilized in your own operations.
“Eventually there may even be carbon credits issued to owners of these small wind turbines, and perhaps a production tax credit in the future,” said Windelman. “Based on today’s markets, this Jacobs wind turbine should be self-sufficient within 10 years, perhaps even sooner. There’s even a growing lease market for towers to firms needing another antenna in the sky.”
Wind power in the United States is expected to grow by 3,000 MW in the next five years. According to the Department of Energy, each 1,000 MW of wind power creates 3,000 manufacturing jobs, 700 installation jobs and 600 operation and maintenance jobs.
In Denmark, nearly 25 percent of its total electricity is provided by wind power. Germany leads all nations with about 15,000 MW of wind power. Brazil, Argentina and China are other wind power leaders. The latest data shows U.S. wind power totals at about 6,500 MW.
Jim Nichols, long-time wind power advocate at Lake Benton, speaks of his 265-foot-tall, 1.65-MW turbine as his “combine in the sky.” It takes a gentle breeze of only 5 mph to turn the blades, and there’s no such thing as a totally windless day in western Minnesota.
“It’s the only crop I’ve got that produces some income every day,” Nichols said.
By Dick Hagen
The Land Staff Writer
Originally published in the February 23, 2007, print edition.
2 March 2007
|Wind Watch relies entirely
on User Funding