After facing a nearly $2 million fine and filing for bankruptcy earlier this month, a collection of wind farms the University of Minnesota once used for research may close.
The University and the National Renewable Energy Laboratory researched seven community-owned wind farms in Luverne, Minn., to study the economic impact of wind energy battery storage from 2010 to 2011. The federal government imposed civil liability on the farms because they didn’t file correct government paperwork.
Though the bankruptcy and potential closures won’t affect any current University research, researchers and experts say it’s still a loss.
Xcel Energy led the Wind-to-Battery Project, with help from the University, in 2008 through a $1 million grant from the state’s Renewable Development Fund.
The project spurred from a state law passed in 2009 that required 30 percent of Xcel’s energy output come from renewables by 2020, with at least 25 percent being wind energy, to reduce the state’s reliance on fossil fuels.
But wind energy is unpredictable, experts say. Wind usually blows at night, but the highest demand for energy is during the day. And although wind energy supply isn’t currently insufficient, experts say it could be if more people start using it in the future. The battery project aimed to eliminate that problem by testing how to store some of the energy from peak wind gusts in batteries.
“Due to their variable nature, you want to have some storage,” said electrical and computer engineering professor Ned Mohan, who collected research from the farms.
Since the battery Xcel wanted to test was small, it had to find a small wind farm on which to test it. The company had previously entered into a power purchase agreement with a substation of the nine wind farms in Luverne, which were collectively owned by hundreds of investing farmers in the community.
Xcel, along with the University and the National Renewable Energy Laboratory, learned in 2011 that a battery could economically sustain storing energy and could later be distributed throughout the state.
Shortly after the research concluded, investors learned about a Federal Energy Regulatory Commission policy change from 2006 that they hadn’t been following. It required power purchase agreement farms that produce less than 20 megawatts of energy to fill out paperwork that certified them to do so. But when the farms began 13 years ago, this paperwork was optional.
After eight years of unfiled paperwork, the farms were hit with the civil liability and subsequently had to file for bankruptcy.
“We didn’t know about these regulation changes,” said Mark Willers, CEO of Minwind Energy LLC, the company that managed the farm’s finances. “And the fine the federal government is giving is massive.”
Since 2007, the commission has imposed over $600 million in civil liabilities for different energy companies.
The farms are now for sale, Willers said. But without a buyer, the farms will close and Minwind will dissolve.
Though community-owned wind farms like the ones in Luverne may struggle with administrative work, research shows that they can have greater economic development impacts for their communities than large-scale, company-owned farms.
“The downside to a community farm is that farmers are not necessarily experts in developing generation projects,” said Beth Soholt, executive director of Wind on the Wires, a St. Paul-based nonprofit that specializes in wind energy obstacles.
Soholt said she has never heard of a wind farm being fined because of problems with paperwork.
“It’s very sad that these things happen, and obviously it’s not a good thing for these things to close,” said Mohan, the University professor. “We need renewable energy.”
Wind energy storage research continues
The University has recently been researching different methods of wind energy storage.
“I think we are one of the leaders,” mechanical engineering professor Perry Li said, “and storage-wise, there are actually not so many places working on storage.”
With funding from the National Science Foundation, Li has been researching the possibility of wind energy storage in compressed air for about four years. He said he’s a few years away from a prototype.
Battery storage has been around for a while, he said, but there’s room for improvement. Batteries have a short lifespan, create waste when they’re disposed of and are very expensive, Li said.
Wind energy storage in compressed air, however, is cheap and creates no waste, he said.
The University has also been experimenting with storing wind energy in abandoned mines, electric cars or even beneath the ocean. And many start-up companies are curious about those possibilities.