1. Community Wind Development
August 10, 2006
Hardin Hilltop Wind Farm…… An Example of Community Wind in Iowa Kansas Community Wind Workshop Cloud County Community College Concordia, Kansas October 31, 2006
Thomas A. Wind
Wind Utility Consulting
Jefferson, Iowa
Thomas A. Wind

2. Community Wind Development
August 10, 2006
Topics I Will Cover
Initial formation of project
Electrical Interconnection
Need for Incentives
Key Issues
Economic Feasibility
Benefits of the Project
Thomas A. Wind

3. Initial Formation of Project
Community Wind Development
August 10, 2006
Initial Formation of Project
Local Land Owners and Farmers who Own the Wind Turbine Project
All wind projects start with one person…. the one who has the “crazy idea”
It was a crazy idea for many reasons
He pesters the others who then reluctantly buy into the “crazy idea”
He becomes the “champion” for the project.
Thomas A. Wind

4. Community Wind Development
August 10, 2006
Greene County
Hardin Township
Thomas A. Wind

5. Community Wind Development
August 10, 2006
7.35
7.20
7.05
6.90
6.75
6.60
6.45
6.30
6.15
Thomas A. Wind

6. Meteorological Test Tower Installed November 2003 Cost $11,000
Community Wind Development
Meteorological Test Tower Installed November 2003 Cost $11,000
August 10, 2006
Thomas A. Wind

7. Community Wind Development
August 10, 2006
Hardin Township
HHW
Greene County
Farmer-Owned Wind Farm Proposed in Greene County, Iowa
Thomas A. Wind

8. Community Wind Development
August 10, 2006
Interconnection
Photo by GE Wind -
Thomas A. Wind

9. Community Wind Development
High Voltage Transmission System for the Upper Midwest
August 10, 2006
Thomas A. Wind

10. Community Wind Development
High Voltage Transmission System for Iowa
August 10, 2006
Little generation in this area…
This helps with getting transmission access!
Thomas A. Wind

11. Interconnecting the Project to the Grid
Community Wind Development
Interconnecting the Project to the Grid
August 10, 2006
The main interconnection issues for this project are the power factor and operating voltage levels at the Point of Interconnection
There will be a 4- month period of reduced output due to substation equipment delays.
The wind farm will also be subject to occasional curtailments over its lifetime
New 34.5 kV Underground Line
Existing 34.5 kV OH
Transmission System
Point of Interconnection
Thomas A. Wind

12. Community Wind Development
Buffalo Ridge Minnesota this Morning from 10,000 feet
Community Wind Development
August 10, 2006
About half of the wind turbines were turned off due to insufficient transmission capacity
Thomas A. Wind

13. Community Wind Development
August 10, 2006
Key Issues
Photo by GE Wind -
Thomas A. Wind

14. The Major Challenge for This Project: --- Wind turbine procurement ---
Community Wind Development
August 10, 2006
The Major Challenge for This Project: --- Wind turbine procurement ---
It is a Seller’s Market!
Most major manufacturers have no wind turbines available for 2006 or 2007
Large wind farm developers have purchased most wind turbines
Earliest delivery for major new projects may be in 2008
A few turbines become available as construction schedules slip
Three years ago, delivery time was weeks
Manufacturers favor larger orders rather than smaller orders since they make more money
In many cases, no manufacturers may even bid on supplying a single wind turbine
To get a turbine in the near future you may have to work through a larger developer
Avoid single turbine projects unless you have a lot of money!
Thomas A. Wind

15. Power Purchase Agreement
Community Wind Development
August 10, 2006
Power Purchase Agreement
Local utility (Alliant Energy) was required by PURPA to purchase power
All power will be sold to the local investor-owned utility serving in the area
Fifteen year term contract
Power sold at utility’s long term avoided cost (about 3 ¢ per kWh) as required by PURPA
Green tags are separately valued and sold
Wind power will be integrated in with the utility’s other power supply resources
Alliant likes wind power, one of the largest purchasers of wind power
Thomas A. Wind

16. Financial Structure is LLC Flip Model
Community Wind Development
August 10, 2006
Financial Structure is LLC Flip Model
Ownership structure based on Minnesota LLC Flip model
Outside Investor for utilizing income tax benefits (“Tax Investor”) becomes a partner in your LLC and provides the majority of the capital
Ownership flips sometime after 10 years from Tax Investor to local owner when the tax benefits lapse and when the Tax Investor achieves his target rate of return
Seven USDA grants were obtained averaging $247,000 each
Reduces Production Tax Credit and depreciation basis for Tax Investor
Iowa Energy Center $250,000 nine-year zero interest loan
Local owners will have modest down payment
Long-term debt partially from local bank and partially from outside debt sources
Thomas A. Wind

17. Community Wind Development
August 10, 2006
Need for
Incentives to be
Economically
Feasibility
Photo by GE Wind -
Thomas A. Wind

18. Community Wind Development
August 10, 2006
The Overall Economics of Wind Generation is Determined by a Balance of Factors
Cost of
Money
Financial Incentives
Cost to
Interconnect
Price
of Electricity
Cost of
Turbine
Wind
Speed
Higher Values
DISCOURAGE
Wind
Generation
Higher Values
FAVOR
Wind
Generation
Thomas A. Wind

19. Community Wind Development
Selecting Specific Sites
Community Wind Development
August 10, 2006
Mean Annual
Wind Speed
In Meters per Second at 50 Meters
0.02
Mps per
Color
Change 1 2 3 4 5 6 7 M
Wind Turbine #1
Met Tower M 1
Thomas A. Wind

20. Community Wind Development
August 10, 2006 N 7 5 6 4 2 3 1
Hardin Hilltop
Wind Farm
3.6 Mile 34.5 kV Line
to Center of Wind Farm
34.5 kV
Point of Interconnection
(West Side of WW Sub)
To Jefferson &
Scranton
161/34.5 Sub
To Grand Jct.
161/115/34.5 Sub
Jefferson Water Works Sub
Legend
Wind Turbine
Alliant Substation
Underground 34.5 kV
Jefferson, IA
Alliant OH 34.5 kV
1.0 Mile
Thomas A. Wind

21. Community Wind Development
August 10, 2006
Economic Feasibility
A small project usually cannot be cost competitive on a per kWh basis with a 100 MW wind project
Small projects need something extra to make them feasible:
Higher selling price for the power
AND / OR
Financial incentives.
Foundation under construction for 2.1 MW wind turbine near Jefferson, Iowa
Thomas A. Wind

22. Need for Financial Incentives
Community Wind Development
August 10, 2006
Need for Financial Incentives
Iowa provides a 1.5 ¢ per kWh tradable state tax credit for 10 years
Each local owner applied for a USDA Section 9006 grant, which averaged $247,000 each
Each local owner received a $250,000 nine year zero interest loan
All of these were necessary to be competitive in this lower wind speed area.
Completed foundation for large 2.1 MW wind turbine near Jefferson, Iowa
Thomas A. Wind

23. Community Wind Development
August 10, 2006
Benefits from
the Project
Photo by GE Wind -
Thomas A. Wind

24. Locally Generated Power
Community Wind Development
August 10, 2006
Locally Generated Power
Reduces high voltage transmission grid losses since power is generated where it is used
Tends to reduce congestion on the high voltage grid if the wind generation is in an area with little generation.
Plowing in underground high voltage cables for wind turbines
Thomas A. Wind

25. Community Wind Development
August 10, 2006
Local Property Taxes
The view from top of one farmer-owned wind turbine in Iowa
(235 feet high)
Iowa allows the county board of supervisors to phase in and abate property taxes for privately-owned wind generation projects
The Hardin Hilltop project will pay about $25,000 per turbine per year after the 7 year phase-in period.
Thomas A. Wind

26. Electrical Infrastructure
Community Wind Development
August 10, 2006
Electrical Infrastructure
The construction of the turbines, electric lines and substations adds to the electrical infrastructure
The established wind site and equipment will have value after the normal wind turbine lifetime of years
This value is often ignored, but it may be very significant in the long term.
Thomas A. Wind

27. Community Wind Development
August 10, 2006
The proposed wind farm would generate about 47,000 megawatt-hours per year
Jefferson uses about that same amount of energy per year
The Proposed Wind Farm Will Be a Significant Supplier of Electricity to the County
Paton
Proposed
Locally-Owned
15 MW
Wind Farm
Churdan
Grand Jct.
Scranton
Jefferson
Rippey
Thomas A. Wind

28. Community Wind Development
August 10, 2006
Paton
The whole county uses about 100,000 MWH per year
Along with a second hypothetical wind farm about the same size, the two wind farms would generate enough energy on average to provide all of the county’s electricity needs.
Hypothetical
Second
Wind Farm
Churdan
Grand Jct.
Scranton
Jefferson
Rippey
Thomas A. Wind

29. Community Wind Development
August 10, 2006
Proposed
Locally-Owned
15 MW
Wind Farm
Jefferson
Scranton
Churdan
Grand Jct.
Rippey
Paton
The 15 MW Locally-Owned Wind Farm Will Save the Equivalent of Enough Coal To Fill a Train 3 Miles Long Every Year
Thomas A. Wind