PAYNESVILLE – A proposed wind project that was supposed to make Stearns County a leader in renewable energy production and provide thousands of dollars in annual income to local farmers is on hold.
Paynesville Wind, a 95-megawatt wind farm proposed by Edina-based Geronimo Energy, was given a green light by state regulators in 2010.
But Geromino hasn’t been able to find a buyer for the electricity that the wind farm’s turbines would produce, and now says no project will be built in the immediate future.
Geronimo had sought an extension of its permit from the state Public Utilities Commission in 2012. But it didn’t seek another extension, and the commission revoked the project’s permit this month due to the lack of a power purchase agreement.
Betsy Engelking, vice president of Geronimo, said the permit revocation is a housekeeping matter. If the company decided to resurrect the project at some point, it could reapply for a new permit, she said.
Engelking said Geronimo still thinks the Paynesville wind farm was a good project, but the company’s projects in other parts of the state are better, especially with the development of more transmission lines in southern Minnesota and the Dakotas.
“At the time we started developing it, it was a very good location,” she said. However, the Paynesville area has much lower wind speeds than other areas where the company has developed wind projects in the Upper Midwest, Engelking said.
When proposed, the project was heralded by renewable energy proponents and those who saw it as a source of jobs and income for Stearns County’s rural economy. But some residents strongly opposed it, concerned about the visual effect of as many as 60 turbines.
The project’s failure to get off the ground has left some landowners like Ken Schefers disappointed. Schefers, who farms 500 acres with his brother, Ralph, signed an agreement with Geronimo to use his land for a turbine and worked to overcome opposition to the wind farm. But now he says he believes the project is “pretty well done.”
“I suspect that they feel like it’s a real slim chance that this is going to proceed,” Schefers said.
Landowners say enthusiasm for the Paynesville project deflated after wind energy prices tumbled. Geronimo’s contract with landowners was based in part on the revenue the project would earn.
Wind-energy prices were very high in 2007-08 when projects like Paynesville started, largely because natural gas prices also were high, Engelking said. But by 2012, they had dropped in half.
Schefers, who said he’s a strong believer in green energy and conservation, liked the idea of contributing renewable energy. He also expected that with the size of his farm, he would earn about $30,000 annually from the wind farm.
“Farming has its cycles, and when it gets lousy, that would be really kind of nice,” he said.
But with the lower wind prices, “you could end up with half of what you were kind of thinking you were going to get,” he said. And while landowners were guaranteed a minimum payment, they didn’t anticipate earning the minimum for the entire length of the contract, Schefers said.
Bill Miller, who owns 400 acres, signed an agreement with Geronomio because he liked the idea of seeing wind mills producing clean energy.
“There were high expectations. There was a lot of hope,” Miller said. “Then, after a while, it just kind of petered out.”
There’s been a slowdown in the number of wind energy projects in the pipeline for regulatory approval. Dan Wolf, executive secretary of the Public Utilities Commission, said the commission typically has three or four applications totaling about 100 megawatts of wind energy pending at any one time. Right now it has no pending applications, Wolf said.
However, one industry expert said wind energy development continues to be strong despite the Paynesville project’s status.
“I wouldn’t say that project is indicative of where the industry is at as a whole in Minnesota right now,” said Chris Kunkle, regional policy manager with Wind on the Wires, a trade association for the wind industry.
This week, Chicago-based Invenergy announced it would build a 200-megawatt wind farm in Freeborn County. And RES Americas is finishing its 200-megawatt Pleasant Valley wind farm near Austin and has an agreement with Xcel Energy to buy its power.
Xcel, the state’s largest utility, plans to add significantly more wind-generated power to its system, according to its latest resource plan, Kunkle said. And demand for new wind projects is likely to pick up again when the federal government issues its final plan for reducing carbon emissions from power plants, he said.
One of the reasons for the slowdown in projects is that a federal production tax credit for wind energy has run out for projects that didn’t start construction by the end of last year, Engelking said. Several new wind projects under construction will be online by the end of this year or next, but many others are on hold waiting to see if Congress extends the tax credit, she said.
“It’s more important that we have a decision,” Engelking said.
Geromino is still moving ahead with plans for several solar farms in Stearns County, including one near Paynesville.
Some Paynesville landowners said that while they’re disappointed, they haven’t given up on wind power.
“We really believe in the clean energy, and we were kind of excited that we could contribute that much,” Schefers said.
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