Driving east on Hwy. 30 near Woodstock, it’s hard not to notice the enormous 1.2 million lb. crane that ascends hundreds of feet in the air just north of the highway near the Murray County line.
The crane, which can be seen from miles away, signifies the beginning of a new wind farm along the Buffalo Ridge, called Ridgewind.
The community-based energy development (C-Bed) project includes 11, 2.3 megawatt (MW) Siemens wind turbines spread over about four square miles – five turbines in Pipestone County and six in Murray County – and involves 17 landowners, renters and tenant farmers.
Upon completion, the towers will rise 265 feet to the 190,000 lb.-nacelle and have 150-foot long blades.
Project Resources Corporation (PRC) of Minneapolis secured financing for the project in July and the first section of tower was placed on Tuesday, Nov. 2.
“It’s kind of the final stretch,” said Paul White, president of PRC.
PRC has been developing wind in Minnesota, Iowa, Kansas, Indiana, and Colorado since 1998, when they built their first 1.98 MW project near Chandler. They operate 13 projects that have a total production capacity of 1,228 MW and range from the 1.98 MW project in Chandler to a 205.5 MW project in Fenton, and they’re in the process of adding four more projects, including their first in North Dakota.
While they’ve been in the region for more than a decade, White said the Ridgewind project is unique in that PRC is implementing sale-leaseback financing with an affiliate of Union Bank. Upon completion of the project, PRC will sell some of the turbines and other capital equipment to the bank, freeing up funds for PRC while allowing them to maintain control of the project as the lessee.
Many C-Bed projects use flip financing, White said, in which a project developer enters into a partnership with an investor – many times a foreign investor, according to White. The investor owns a percentage of the project for the life of the tax credits that are available for wind projects and receives most of the income from the project and the tax credits. Once the investor reaches a predetermined rate of return, the majority ownership flips to the project developer.
White said that’s how PRC used to finance their projects, but it bothered them that the profits were leaving the state, so they began using local investors. This is the first time, however, that PRC will maintain financial control and manage the project throughout its lifetime.
“In this case we were able to get beyond the flip financing entirely,” White said.
By managing the project, he said, PRC intends to keep landowners more connected with the project. One landowner, Fred Berreau, said he’s been very involved thus far, acting as a mediator between PRC and farmers who come to him with questions or concerns.
Berreau’s been active with the wind industry since about eight years ago when he leased a portion of his land to another wind developer that built three wind towers on it – an arrangement he’s not all that happy with as he looks back.
“They offered us so much up front and that was it,” he said. “We probably made a bad judgment.”
Perry Fales, another one of the 17 landowners participating in the Ridgewind project, said he leased a portion of his land to Enron in 1996 for a one-time lump sum payment. When Enron collapsed, GE bought the contract, which ended in 2002. It was about that same time, he said, that PRC approached him looking for land in the area.
Fales and Berreau said the agreement with PRC is different than those they’ve had with other companies. Their agreement with PRC, they said, pays landowners a percent of the income received from the sale of the energy to Xcel Energy.
Neither man knew or would divulge the percentage of the revenue they will get, and PRC president White said he could not comment on the financial arrangements due to federal regulations. But Fales said as long as the blades of the turbines keep turning, he expects a better deal than the one-time lump sum he received in the past.
Either way, he said, wind energy is good for the planet and it’s been good to him.
“I thought it would be a good thing to do and of course it does get you a little extra income,” he said.
Dale Schwanke, superintendent with Ryan Companies out of Minneapolis, one of the subcontractors for the project, said his crew began pouring concrete platforms for the cranes and foundations for the turbines Aug. 11 and they hope to have the farm operational be the end of this year.
Schwanke said the Siemens turbines are larger than any of the existing turbines in the area. They’re so large that prior to construction his crew strengthened the gravel roads around the project site so they could handle the weight of the turbine components and the crane.
Most gravel roads are about eight inches deep, Schwanke said, but in some areas they increased that thickness to 30 inches to support the 1.2 million lb. crane.
PRC is also constructing a maintenance and operations facility at the site to maintain the Ridgewind towers and other small community wind farms in the area. White said the structure will house two-to-three employees in the beginning and as many as 10-to-12 after about five years.
“We see that as kind of a neat thing because it’s going to be some local jobs right there in Woodstock,” White said.
According to the American Wind Energy Association, one megawatt of energy can supply electricity to about 240 to 300 homes per year. That means the 11, 2.3 MW turbines in the Ridgewind project could power between 6,000 and 7,500 homes each year.
To qualify as a C-Bed project, state statute 216B.1612 requires that a project have no single beneficiary owning more than 15 percent of the project unless the project includes only one or two turbines or is owned by a public entity, and 51 percent of the revenue from the project flows to local owners and other local entities. That includes tax revenue to townships, counties, cities and school districts, lease payments to landowners and any profits to local investors.
In addition, the project must have the support of the county board in which it is located. The Pipestone County board passed a resolution supporting the Ridgewind project in 2007.
The goal of the state’s C-Bed legislation is to “optimize local, regional, and state benefits from renewable energy development and to facilitate widespread development of community-based renewable energy projects throughout Minnesota.”
|Wind Watch relies entirely
on User Funding