April 23, 2012
Nebraska

Lincoln’s two wind turbines targeted for replacement

By ALGIS J. LAUKAITIS / Lincoln Journal Star, journalstar.com 23 April 2012

Two Lincoln Electric System wind turbines on the northeast edge of the city may be destined for the scrap yard.

On Monday, the utility plans to ask interested companies to submit proposals to decommission or tear down the old wind turbines near Interstate 80 and replace them with newer, larger models that can generate more power.

The first wind turbine was installed in 1998 and the second one in 1999. They are the only commercial wind turbines in Lincoln and are considered by some to be landmarks.

“To the best of our knowledge, they are the oldest operating wind turbines in the state,” said Jason Fortik, vice president of power supply for LES.

Fortik said an undisclosed company approached the utility about two months ago, offering to replace the two 660-kilowatt wind turbines with two 1.5-megawatt turbines. (A megawatt is 1,000 kilowatts.)

Fortik said LES did not solicit the proposal from the company, which specializes in small turbine replacements for utilities in the region. But management decided it deserved further study.

“We thought it would be wise to analyze the expense we are incurring and the amount of money we have invested to see if it is in the range of feasibility to replace them,” Fortik said.

The two old turbines still are operating, and LES has an agreement to maintain them with Vestas-American, the company that built them for about $1 million apiece.

Because LES is a public utility, it could not accept the company’s initial proposal, Fortik said. Instead, the utility has to go through a public bidding process as required by law.

Fortik said LES would like to receive bids in early May and have the board consider them later in the month.

“I’m sure the developers will be hustling, because they will want to get them operational before Dec. 31,” Fortik said.

Fortik said the project is on a fast track because federal renewable energy tax credits paid to companies who install wind turbines will cease at the end of the year unless Congress extends them.

LES is not eligible to collect federal tax credits because it is a public utility, but a private developer can take advantage of them, he said.

LES built the two wind turbines knowing that the Lincoln area is not the best for generating wind energy. The best winds in the state are in northeast and central Nebraska, where developers and utilities have built big wind farms.

Public support was a big factor in LES’ decision. Utility customers, who wanted to see more renewable energy projects built, also donated money through a voluntary surcharge on their bills.

Fortik said LES management believes replacing the old wind turbines with new ones is economically feasible for the utility under a 20-year agreement. Only two would be built, because there’s not enough space on the existing site for more.

“There’s little risk for us. We would not be the owners or operators. It’s all the developer’s risk. It shifts potential costs from us and ratepayers to a potential developer,” he said.

The cost of two new wind turbines depends on the type of technology used, Fortik said. Currently, it takes about $2 million to build a wind turbine that could generate one megawatt of electricity.