Holland – It takes time to produce wind energy – and it has been nearly two years since the Holland Board of Public Works started the process of looking into a location for a wind project.
The BPW Board of Directors approved Monday at a cost of $30,000 an extension until June 21 of the land lease option in Overisel Township. The project began in July 2010.
Two prior three-month extensions for the Allegan County wind project were made in September and December. In December, BPW Business Services Director Dan Nally told the board he expected to have more specific plans for March, but Monday, another extension was approved.
Following that meeting, The Sentinel posed some questions to Nally about the wind project and the BPW’s work with Grandville-based SWMI Wind energy Development LLC.
The two previous extensions were made for $10,000, this one at a cost $30,000. Why?
The contract calls for payments every quarter of $80,000 to cover the cost of lease options that SWMI holds with the property owners. The BPW has negotiated lower payments for a couple quarters, but the real costs for SWMI are ongoing. Therefore, the $30,000 is, in part, an acknowledgment of SWMI’s costs while still negotiating payment much lower than the $80,000.
Are these payments to SWMI or a property owner?
SWMI has acquired the underlying easement options from land owners. SWMI and the BPW have an agreement to hold these options exclusively for the BPW until it decides whether or not to purchase the underlying easement options, which will depend on study results. After the BPW pays SWMI for an extension, SWMI must pay the property owner in order to keep the lease options available.
What is SWMI’s role in this process?
SWMI has entered into a number of underlying easement options, titled “Wind Energy Option for Easement and Easement Agreement” with several landowners in Allegan County. They did the leg-work of speaking with the land owners, obtaining the leases and presenting the purchase option to the BPW. Now, the BPW is having discussions with them on the needed development stages of the project.
A few months back it was noted in a board meeting that there was not a developer on board for the project. Is that still the case?
Yes, while the BPW has met with a number of potential developers, no one has been named as developer. At this time, it appears that if the project moves to conclusion, the BPW will assume the developer role.
Are the bat/avian and wetland studies taking more time than expected? Could the results of those studies cause problems for this project?
The studies are not taking longer than anticipated. The bat/bird/avian studies are at minimum a yearlong exercise. We could continue these studies for several years if we found something that needed further clarification. These identify the species that use the area and allow the Michigan Department of Environmental Quality and BPW to determine if any issues exist.
SWMI said wind projects can take five years to get online. What kind of time frame is the BPW looking at? When can wind energy be expected?
The development of a project this complex does take between three to five years to bring to completion.
As we progress through the various studies and activities, there are numerous decision points that are essential: Do we keep pursuing this project or have we met an obstacle that is insurmountable or too costly to address? These decision points include wind regime, zoning requirements, the various environmental studies, land acquisition, Federal Aviation Administration air space issues, transmission constraints, project cost, etc.
We have been … addressing these items and have not met anything we cannot address. If things continue to look good, it is anticipated that a go/no-go decision will be made prior to the calendar year’s end. If we give the go ahead, construction of this size of project takes about one and a half to two years.
Do you have any idea how much energy might be generated at this site?
We have not yet firmed up that decision. We are exploring a project size of 20-40 megawatts.