WILLMAR – Numerous factors led to lower than projected production of electricity in the first 12 months of operation for Willmar Municipal Utilities’ two wind turbines. Those factors included lower than average wind velocities, frequent turbine stoppages, breakdowns and periods of non-production due to as-yet undetermined reasons.
However, taking those factors into consideration, the turbines performed very close to expectations and significant gains are expected in the second and future years of operation, according to a report discussed by the Municipal Utilities Commission on Monday.
The report was compiled by Jon Folkedahl of Folkedahl Consulting Inc. of Willmar, who worked with the utility on the project.
On Aug. 4, 2008, the commission approved a turbine supply agreement with the DeWind Company of Round Rock, Texas, to buy the two turbines for installation at a site just north of Willmar High School. The $10 million turbines were installed by July 7, 2009, and were commissioned on Sept. 3, 2009.
Bruce Gomm, utility general manager, said the utilities commission proceeded with the project for a variety of reasons, including the fact that the project would be economically viable and that the utility would receive energy from the turbines at a cost of around 5 cents per kilowatt-hour.
“The big thing we wanted to determine was did we meet that (expectation) or not, and after compiling all the numbers and going through the data we have indeed met that expectation that we made that decision on,’’ Gomm said.
The project was initially financed from utility re-serves, which were later refunded from proceeds from the sale of municipal bonds, which provided long-term financing. No other financing has yet been used. The city has approved federal Clean Renewable Energy Bonds as a way to reduce the project’s finance costs.
The turbine supply agreement guaranteed the turbines would be available 90 percent of the time for energy production during the first six months of operation and be available 95 percent of the time thereafter.
During the first six months of production, the utility received warranty payments from DeWind totaling $73,005 for the times when the turbines were not available.
During the second six-month period, availability increased and warranty payments were reduced to $23,761, the report said.
The report said Willmar is a non-profit utility and as such the financial viability of the project was evaluated principally on electrical energy production costs, without consideration for profits that would be applied to a privately-owned, tax equity-based, investor-financed project. Therefore, an expense statement was developed in 2008 to show the 20-year cost of the project projected on a per kilowatt hour basis.
The turbines helped the utility comply with a 2007 Minnesota Legislature mandate that each electrical generating utility in the state increase the percentage of its annual electricity sales from renewable sources each year to a minimum of 25 percent of its total annual generation by 2025.
The mandated percentage to be achieved by 2011 is 7 percent, the report said. The combined output of Willmar’s turbines for the one-year period equaled about 12 percent of the utility’s total annual electrical generation and displaced 1,757.47 tons of carbon dioxide that would have been emitted as a by-product of coal combustion.
In other business, the commission received information on a city proposal to vacate and close Pacific Avenue Southwest between Seventh Street and 10th Street. The closure was requested by the utility to allow construction of coal storage facilities as part of the $10 million power plant improvement project.
The City Council will be asked on March 7 to consider vacating and closing Pacific Avenue. Permanent signs and barricades will be installed on April 4.
|Wind Watch relies entirely
on User Funding