May 24, 2012
Ohio

Lake Erie wind turbine project suffers setback

By CHUCK SODER | Crain's Cleveland Business | www.crainscleveland.com 23 May 2012

COLUMBUS – The coalition that aims to put wind turbines in Lake Erie suffered a setback today.

The Ohio Third Frontier Commission voted not to provide up to $5 million to Lake Erie Energy Development Corp., or LEEDCo, a nonprofit that is helping guide the effort.

LEEDCo planned to use the money as matching funds for a much larger pot of federal money that will be awarded to organizations working to build offshore wind farms. Much of the state money would have been used to fund research meant to reduce the cost of building an offshore wind farm in Lake Erie, north of Cleveland.

The state money would have helped LEEDCo win the federal money, too, said LEEDCo president Lorry Wagner. The organization is one of about a dozen groups going for the money. The U.S. Department of Energy will award some of the money over the next two years and in the third year will narrow the field to three organizations, which each could receive up to $50 million over five years.

The commission voted down the proposal 6-2, even though the Ohio Department of Development recommended they provide the money, based on a third-party review of the proposal.

A few members of the commission expressed reservations about the project because of challenges faced by the wind industry, the high cost of offshore wind power and the fact that, even if LEEDCo wins some federal money, it many not be one of the final three groups that can get the full amount.

LEEDCo was formed by a group of nonprofits and governments in Northeast Ohio that want to see wind turbines erected in Lake Erie. The goal of the project is to figure out how to make the process affordable and spur additional construction funded by private dollars.

Though offshore wind power today is more expensive than onshore wind power, which itself is more expensive than electricity generated by fossil fuels, Dr. Wagner said the project could help bring down that cost. The project also could help make Ohio a leader in a sector of the wind industry that has yet to establish itself in the United States.

“The question is do we want it in Ohio or do we want it in Michigan?” he said.

He added that LEEDCo was asking to receive money in allotments, as it received federal money.

Commission member Rick Fearon, who also is an executive at Eaton Corp. in Cleveland, noted that the wind industry has faced challenges lately, but he voted for the proposal anyway. If LEEDCo received federal funding for two years and then wasn’t chosen as one of the three groups to receive more money, the Third Frontier in that instance would have invested only $1.6 million.

LEEDCo is working with a group of private developers operating under the company Freshwater LLC. They have had to shift tactics a few times, since they have had trouble finding ways to finance the project. Most recently they shifted away from using 4 megawatt turbines made by General Electric and now plan to use a larger number of smaller turbines made by Siemens, which are expected to be easier and cheaper to install. When combined, they also will generate more power.

Even so, the plan didn’t appeal to a majority of commission members. They just want to make sure tax money is used to fund the best projects, said Katie Sabatino, spokeswoman for the Ohio Department of Development. She wished LEEDCo well.