An emerging group of wind-farm developers are focusing on midsized projects and in places that traditional, large-scale developers are overlooking. These community wind projects, ranging from 5 to 80 MW, are cropping up in part due to recent financial incentives and guidance from firms such as OwnEnergy, based in Brooklyn, NY. “Several converging factors make community wind projects viable,” says OwnEnergy Founder and CEO Jacob Susman. “First is transmission capacity. This is an opportunity for smaller projects to tap into existing transmission infrastructure, avoiding the need for costly new upgrades. Also, as the industry matures, people in local communities are looking for more involvement, control, and a financial stake in a project; more than just the land lease they may be offered by an “absentee” developer. Finally, banks are now more interested in making relatively small loans as little as $20 million for a community wind project compared to the large investment necessary for traditional wind development. The industry is now saying that ‘small is the new big’.”
Susman says his company’s role is to identify a local partner or entrepreneur, someone who lives in the community or has ties there, and preferably someone who is a significant land owner in the project footprint. “Then we form a joint venture with the local partner. For example, partners in Kay County Oklahoma, a father and son team with property in the footprint can count several generations in the area. Their land will be used in the project along with neighbors’ land. That arrangement brings sensitivity to projects. Our role is to make the project work for everyone in the community.”
An island community off Maine provides another example of community wind, developed by Fox Islands Wind LLC. “Instead of importing power from the mainland on a cable, they generate it themselves. They decided to install three wind generators, and then structured the power, financing, procurement contracts as a community with an entrepreneurial person at the lead. A development company such as ours is in the lead so all members have an ownership stake,” says Susman.
Wind projects roughly develop in three stages. The early stage involves feasibility and gathering land for the project, getting a wind assessment of the property, and steps such as getting in the transmission queue. ”A lot of the early effort is local, a good amount of that is done by the local partner. We provide the documentation he would take around to the community. We would do the feasibility work, site assessment to figure out the size, make sure we are not in areas of endangered habitat, on whose property the turbines would be placed, and how it would connect to the grid,” he says.
The middle development phase is outsourced. It includes studies around transmission and permitting, and continuing the wind resource work by a third party, and OwnEnergy typically manages the third parties with input from the local partner. That person might be working with the community dealing with the land owners, and getting county tax abatement for the locals. If anyone in the community is not comfortable with the project, the third party works with that person. The final stage signs up contractors and gets the project ready for financing by wind energy lenders and tax-equity firms
Steps in Wind Development
Step 1: Land acquisition
Land is secured through option and lease agreements with the landowners.
Step 2: Wind resource assessment
One or more meteorological towers—which measure the onsite wind speed, direction, pressure and temperature—are installed. The developer needs to collect at least one to two years of this extremely valuable data prior to financing the project.
Step 3: Transmission and interconnection
After an initial interconnection application, the transmission owner or operator will conduct a series of studies to assess the feasibility to connect at a certain point of interconnection (POI), and ultimately offer an interconnection agreement to the generator. This process may last more than a year, depending on the transmission zone.
Step 4: Environmental studies and permitting
The developer must determine which permits are required and which environmental studies are needed to satisfy federal, state, and local rules and regulations. It is important that this is done early on.
Step 5: Power purchase agreement
This primary asset will dictate the economics of the project, as well as its financing outcome.
NOTE: These five distinct aspects are not necessarily sequential; however, there is a degree of dependency that must be followed for a successful outcome.