As towns across Cape Cod make their foray into the emerging field of municipal wind energy development, all eyes it seems are on Orleans, which could have the first turbines up and running on the Lower Cape by early 2008.
Two, nearly 400-foot tall turbines will be located within watershed land in South Orleans between Route 28 and the Mid-Cape Highway, behind the recycling center and industrial park. The turbines will offset the power drawn by the water department, specifically the water treatment plant.
“Orleans is on the leading edge of trying to develop wind energy and its application at the local level,” said Selectmen Chairman John Hinckley.
When the town became the first member of the Massachusetts Technology Collaborative’s (MTC) Community Wind Collaborative in 2003, it began exploring how to plan, set up and operate a municipal wind energy project.
The MTC is the state agency responsible for renewable energy and innovative economic development.
“The learning curve has been steep,” said Kenneth McKusick, a member of the Orleans Board of Water Commissioners. And, it’s the reason why the construction of the turbines has been delayed.
McKusick said interest in a town wind energy project was heightened after several town officials visited the South Shore town of Hull in 2001 to inspect its wind turbines.
Once a decision was made to pursue a wind energy project, the town approached the Massachusetts Technology Collaborative to assist with project planning and development, and the purchase of wind turbines.
A wind energy committee was established in 2003. Between June 25, 2003 and June 21, 2006, it held 55 public meetings to discuss, deliberate and explore the issues related to watershed protection and the development of the wind turbine project.
After a test tower and a study determined there were six possible sites for wind turbines, wind energy-related bylaws were approved by town meetings in 2004, 2005 and 2006, with little or no opposition.
“Generally the people support this,” said Hinckley, “Without question we have provided as many opportunities as we can do for public input.”
That the wind turbines would cover the cost to operate the water treatment plant is a point that has resonated with taxpayers, Hinckley added.
Still pending is an application to the Legislature for permission to allow the town to use the watershed as the development site.
Deciding where to place the wind turbines and how to erect them were not the only challenges experienced by the town and the collaborative. Equally important has been figuring out who would own and operate the turbines. A few ideas were discussed. One option would have the collaborative purchase, install and operate the turbines. Under another option, Orleans would have ownership and be responsible for the energy production. Neither proposal was palpable to the town or the collaborative, and agreement ultimately was reached that a third party should lease the watershed and cover the cost to purchase, erect, operate and maintain the turbines.
How does Orleans benefit?
While the details of the lease agreement and request for proposals are being revised by the board of water commissioners and the board of selectmen, the basic framework of how the town would benefit from the electricity produced by the turbines has been established.
As part of the lease and request for proposal, McKusick said the entire proceeds from leasing the land for wind power would help pay for the cost of producing water for the town.
In the lease agreement with the third party developer, the water treatment plant would receive 170,000 kilowatt hours of electricity free. Water Superintendent Louis Briganti said this represents about half of the energy consumed annually by the treatment plant. Additional electricity drawn by the plant would be purchased at 50 percent of the retail cost for electricity.
McKusick said the wind turbines would not power the plant directly and the electricity drawn would come from the grid and be checked by meters for the lessee and the water department. The reasoning for this, McKusick said, is because there will be times when the plant is operating but the turbines are idle and vice versa, and electricity is drawn from the grid.
The town is projected to use about 5 percent of the entire amount of electricity generated by the turbines.
Besides the free and below-retail-rate energy costs provided to the water department, the town would also receive an annual rental fee of $64,000, adjusted every three years for inflation, from the developer.
The water treatment plant uses about 450,000 kilowatt hours a year at a cost of about $54,000. The free and below-retail electricity along with the annual rent should cover the entire operational costs to run the treatment plant if the metering arrangement is worked out, said McKusick.
The developer would be responsible for purchasing the wind turbines from the collaborative (a $5.3 million cost). The developer would make money through the retail sale of the remaining 95 percent of the energy produced by the turbines and sold into the grid, and through the sale of renewable energy credits.
Energy producers buy renewable energy credits to offset the environmental impact from energy facilities that burn fossil fuels.
Tuesday, the board of water commissioners and the board of selectmen met during a joint session to discuss the draft of the 20-year lease agreement. One of the concerns stated is how much oversight and authority the town would have during the term of the lease.
Orleans Town Counsel Mike Ford said it’s possible that two companies could get involved in the project, one that specializes in setting up the turbines, and another company that focuses on operating the wind turbines.
McKusick said the lease and the request for proposal would require that all parties be included in the original bid for the project.
“I do think it is a useful project for the town,” said Selectman David Dunford, but only if the protection of the watershed is assured and the use of the turbines and financial terms are favorable to Orleans.
Role of MTC
The Massachusetts Technology Collaborative, the state agency responsible for renewable energy and innovative economic development, also is the administrator for the Renewable Energy Trust. The trust is funded by a renewable energy surcharge added to every electric customers bill.
Chris Kealey a spokesman for the collaborative, said more than $220 million has been distributed for renewable energy projects in Massachusetts.
Besides monetary assistance, Dierdre Matthews, director of the clean energy program, said towns interested in pursuing medium to large-scale wind projects could apply to the collaborative Community Wind Collaborative for technical assistance with the project.
With Orleans’ wind turbine project Matthews said the collaborative has provided about $545,000 in funding and technical assistance to the town including feasibility studies, environmental impact notification and bird studies, legal, professional and engineering services and the $5.3 million purchase of the two wind turbines.
Orleans was recently awarded a $75,000 grant from the collaborative to fund a project manager and cover legal costs to develop the lease and request for proposal.
The cost for the developing the wind turbine project has been comparatively small for the town of Orleans. A report from the Orleans Wind Energy Committee published in 2006 shows the estimated investment for the town of $9,716 related to the test tower and $33,750 for in kind support (committee meetings, staff, etc).
On the Cape the collaborative is working with the towns of Brewster, Eastham, Falmouth, Wellfleet and Orleans to develop wind turbine projects.
Despite the time, money and effort of Orleans and the collaborative, McKusick said that even when the lease agreement and request for proposal is finished (the boards hope by the end of August) and goes out to bid there are no guarantees.
“It is possible that no one will respond to [the request for proposal],” he said.
However, Matthews said the field of renewable energy is rapidly expanding and there is a growing number of companies who could be interested in bidding on the project.
To help entice a prospective developer in the request for proposal, Matthews said the collaborative would commit to purchasing a number of renewable energy credits from the developer of the Orleans site.
The Cape Light Compact is also interested in local communities developing renewable energy projects.
Whereas the wind turbines would benefit the town of Orleans directly, Margaret Downey, administrator for the Compact, said other communities on the Cape could benefit from the power being fed into the grid. She added the Compact would be interested in working with a developer on some kind of energy purchase agreement.
If a developer does not bid on the request for the Orleans proposal, McKusick said one option would be to wait and submit the proposal at a later date. Still, all of the work done by Orleans and the collaborative would not be considered wasted even if a developer for the turbines were not found.
“What we have gone through can be applied to other towns in the state,” said McKusick, and the lessons learned should be “a bellwether for other towns to follow.”
Orleans Wind Energy Committee forms
Test tower erected
Feasibility study identifies six possible sites
Wind energy zoning bylaw passes May town meeting
Lease of watershed for up to two 1.5-megawatt class turbines approved by town meeting
Massachusetts Technology Collaborative orders two Vestas 1.65 megawatt turbines that are almost 400-feet tall to the tip of the blades
May town meeting approves modification of location of turbines to minimize watershed impact
By Matthew Belson
14 June 2007
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