Almost three years after it was built, a wind turbine at the St. Cloud VA Health Care System has become a towering boondoggle.
The VA system has paid about 99 percent of the $2.3 million cost for the trouble-prone turbine.
All that has bought so far is a turbine that supplied a tiny fraction of the power it was expected to generate for the St. Cloud VA campus. And since August 2012, the turbine has supplied no power at all.
Even if the turbine starts working tomorrow, a Times analysis finds the VA system already has lost more than $325,000 in energy cost savings it would have realized had the turbine worked as projected since it went online in April 2011.
The VA system has not been compensated for those lost savings, a spokesman said.
Interviews with and documents supplied by VA officials haven’t made it clear if such compensation will materialize – or when, if ever, the turbine will work properly.
Independent wind energy experts who spoke to the Times said financial guarantees of energy savings for turbine buyers are common in the industry. They also said the turbine’s manufacturer, India-based Elecon Turbowinds, isn’t well established in the U.S.
The 164-foot-tall, 600-kilowatt turbine, the construction of which was funded by the federal stimulus act, remains in the commissioning phase as crews conduct one repair after another to its electrical and hydraulic systems.
As the process drags on, St. Cloud VA officials are voicing their frustration with increasing candor.
“You fix one thing and something else pops up. It’s extraordinarily unreliable,” St. Cloud VA spokesman Barry Venable said. “Here at the hospital, our position is, we want a turbine which operates.”
“While the contractor, contracting officer and everyone involved are continuing to try and make this turbine operate, here at the hospital, we’ve got to let those folks do what they do and focus on continuing taking care of veterans,” Venable added. “Which is not to say we’re not frustrated and embarrassed at the state of the turbine.”
The analysis of lost energy cost savings is based on a projection included in a 2007 feasibility study conducted for the VA system. The study forecast power generation for a turbine of the type that later was installed, at the site where it was installed.
That study projected the turbine would generate about 15 percent of the electricity consumed by the sprawling St. Cloud VA campus. In fiscal year 2013, the campus consumed almost 13 million kilowatt-hours of electricity at a cost of more than $1.1 million. The turbine also was supposed to help the St. Cloud VA system meet a national VA goal to increase its renewable energy consumption to 15 percent of annual usage by 2013.
But the turbine generated only about 230,000 kilowatt-hours of electricity per year in fiscal years 2011 and 2012, and nothing since, VA officials say.
The lost energy cost savings number from the Times analysis is low, because it doesn’t include amounts for much of 2011 or for 2014.
Asked if the VA can recoup lost energy cost savings or if there’s a point at which the VA can seek financial compensation for the turbine’s ongoing failure, Josephine Schuda, a national VA spokeswoman, wrote:
“VA is currently assessing all of its options, and if necessary, will pursue all rights and remedies available to protect VA’s interests,” Schuda wrote.
Schuda says the VA system has not taken any legal action against the turbine manufacturer or the project’s contractor, Massachusetts-based JK Scanlan Co.
‘A black eye’
Wind energy experts who spoke to the Times said guarantees of energy cost savings are common in the industry, though experts differ on how widely they’re used for single-turbine installations such as the one at the St. Cloud VA system.
Thomas Ellenbecker, owner of St. Joseph-based WindReps, a manufacturers’ representation firm specializing in the wind industry, has been an outspoken critic of the VA wind turbine project. Ellenbecker says the VA system overpaid for the turbine, and what it got in return may not even meet the industry standard.
Ellenbecker and another expert, Harold Prior with the Iowa Wind Energy Association, say most wind turbine projects include a guarantee that the turbine buyer will be financially compensated for any shortfall between projected and actual energy cost savings.
“That guarantee is pretty typical in the industry,” Prior said.
Corey Juhl is vice president of product development for Woodstock, Minn.-based Juhl Energy. The company’s services include engineering and consulting for and supply, development and maintenance of wind energy systems.
Guarantees such as those described above are common for large wind developments with multiple turbines, Juhl said. He said they aren’t as typical with single-turbine projects.
As the U.S. wind energy industry has boomed in recent years, Juhl said he and his colleagues have heard horror stories about turbines made by manufacturers with lesser reputations. Juhl said his company is increasingly choosing to work with well-established turbine manufacturers such as GE, Siemens and Vestas.
Of Elecon Turbowinds, Juhl said: “They’re not a very well-established company in the U.S.”
“Each failed wind project is kind of a black eye on the industry,” Juhl added. “It’s unfortunate, because I’m sure they were trying to do the right thing.”