Community Wind is still nascent compared to large wind. As of early 2009, approximately 1 GW of community wind had been installed in the U.S., compared to more than 25 GW of large wind. However, with the increase in favorable State and Federal policies and incentives, this market is poised for dramatic growth. In 2008, DOE's National Renewable Energy Lab (NREL) conducted a study that indicated substantial market potential exists for mid-sized (100 kW to 1 MW) wind turbines. Barriers to achieving that potential have included diseconomies of scale for smaller projects, comparatively high fixed costs of construction, and financing challenges unique to community projects. One significant barrier, in particular, has been a lack of commercially available turbines in the mid-size range. In response, NREL launched the Mid-Size Turbine Development Project to facilitate the development and commercialization of mid-size turbines.
If conference attendance is any indication, interest in community wind is coming on strong. In its first "solo appearance," the AWEA Small and Community Wind conference drew nearly 1700 attendees, some 40% more than anticipated. The community wind workshop track was well attended. Following the three day AWEA conference, 175 registrants stayed for NREL's half-day Mid-Size Wind Turbine Development Workshop. The workshop kicked off the NREL development project, bringing together project developers, OEMs, component suppliers, and wind turbine consultants. Highlights of the workshop are captured here.
Community Wind Background
According to Windustry, a leading community wind advocacy group, the U.S. community wind installed base is small relative to utility-scale wind -- 1089 MW versus 25,317 MW through April 2009. Of that more than 1000 MW was concentrated in five states (MN, WA, CA, NE, IA) and nearly half in MN.
In the right situation, community wind can yield significant benefits:
- Opportunity for local ownership and control
- Keep economic benefits local
- Greater self-sufficiency -- "power to the people"
- Risk mitigation against high energy cost, especially in remote/isolated locations (e.g. high diesel fuel costs for diesel generators)
Active, passionate community involvement is key to driving projects forward and overcoming obstacles that impact community wind, in particular:
- Diseconomies of scale inherent in smaller projects
- Relatively high fixed installation costs (e.g. crane mobilization)
- Insufficient policy and financial incentives targeted to community wind
- Financing challenges beyond those faced by utility-scale projects
- Presence of relatively few OEMs limits turbine availability and competition
Community wind is more about ownership philosophy and application characteristics, than specific turbine and project sizes. That said, typical project sizes range from 100 kW to 20 MW, though some developers promote "utility-scale community wind" with project sizes reaching 80 MW plus. "Mid-size" turbines of 100 kW to 1 MW are often associated with community wind, however, plenty of 1.5 MW (and even some 2 MW+) turbines being used in community wind applications.
One issue hampering community wind has been the relatively few turbine manufacturers in the "mid-size" range of 100 kW to 1 MW; some size ranges have just one or two competitors. To support larger wind farms and achieve scale economies, many OEMs have "migrated up" to larger sizes, leaving a void in the mid-size range.
While development of any wind project is a complex undertaking, community wind projects are especially difficult to execute. Non-profits such as municipalities are unable to directly use Federal tax incentives, leading to projects that incorporate a "patchwork" of financing tools, creative ownership structures, etc. Project feasibility is highly dependent on state-specific policy and incentives. In short, "when you've seen one community wind project, you've seen one community wind project."
If you are interested in pursuing community wind opportunities, call Tim at Shepherd Advisors to learn more, 734-975-0333.