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Wind power is on the grow, but will it be homegrown? 

APPLETON – Fewer than 10 years ago, Brent Olson and a group of farmers in western Minnesota and eastern South Dakota sold $13 million worth of shares and built an ethanol plant in Big Stone City, S.D.

Today those shares are worth $140 million and the plant has paid more than $40 million in dividends to its owners, most of whom are farmers, small business owners and others who live where the corn for the plant is grown.

If the plant was owned by an outside corporation, “all that money would still have been made,” said Olson. “It would have been made but it would have gone somewhere else,” said Olson, an author on rural issues and member of the Big Stone County Board of Commissioners.

Olson and a similar group of Big Stone area residents are now in the process of raising funds in hopes of building a 20-megawatt wind turbine farm for the same reason they built the ethanol plant. Wind power offers western Minnesota an opportunity for what Olson termed “solid economic growth.”

Wind power is growing at what Brian Antonich of Windustry called a “phenomenal rate” in the U.S. He joined Olson and others in speaking about the potential of wind power at a Renewable Energy Forum hosted Tuesday in Appleton by the Upper Minnesota River Valley Regional Development Commission.

The forum attracted more than three dozen people, many of whom have aspirations for developing wind power projects both large and small. But the forum also suggested that wind power in Minnesota is at a crossroads: Will the Minnesota model of local ownership that helped make the state a leader in ethanol be repeated in the development of wind power, or will outside and private ownership build the state’s wind turbines?

State Rep. Aaron Peterson, DFL-Appleton, said ownership is shaping up to be the main issue in this part of the country.

He helped lead legislation in Minnesota that aims to support wind power development in much the same way that the state encouraged the development of its ethanol industry.

As of today, new legislation seeks to assure a market for wind power by requiring that utilities in the state obtain 25 percent of their energy from renewable energy sources by 2025. Minnesota’s community-based energy development legislation – often called C-BED – also requires that utilities consider purchasing their power from locally owned ventures.

Peterson believes that Minnesota “squandered” its lead in wind power development, but he said that he is hopeful that the new renewable energy standards will help the state regain its position.

But he is also concerned that the Minnesota ownership model faces tough competition. For one, he pointed to aggressive, corporate-owned ventures that have already put states like Texas and California well ahead of Minnesota in wind power generation.

They have an advantage in raising the capital needed for wind generation. Federal law provides a production tax credit for wind power, but it can only be applied toward passive income. That favors wealthy investors with lots of passive income from stocks and other investments over the farmers and small business owners that have typically invested in ethanol plants, Olson pointed out.

Peterson also said that a strong euro – now valued at $1.37 to the U.S. dollar – and ambitious wind power development in Europe and China have made the overseas market more appealing to the manufacturers of wind power equipment. That makes it difficult for the “smaller” scale developments – like the $30 million to $35 million Big Stone County project – to purchase the turbines and equipment.

Perhaps the biggest problem facing western Minnesota wind power developers is the lengthy and costly process of obtaining access to the electric power transmission system. The study and application process for the Big Stone project will likely cost more than $100,000, according to Olson.

The transmission grid is overseen by the Midwest Independent Transmission System

Operator. It places applicants in a queue system that Peterson said he would like to see reformed. He believes there are many projects in the queue that will never happen, and serve only to slow the approval process to the detriment of locally owned projects.

Olson said the Big Stone County group is now about two-thirds of the way through the application process. The group is also negotiating a purchase power agreement with a major utility. Olson said that most locally owned wind power groups can expect a five-year process from start to finish.

Olson remains optimistic about the potential for locally- owned wind power, but he cautioned his audience. “The rewards are there, but they are rewards you work for.”

By Tom Cherveny

West Central Tribune

1 August 2007

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial educational effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

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