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Minnesota farmers harvest a new crop -- wind by Robert Schubert
(Monday, Oct. 7, 2002 -- CropChoice news) -- Tom Arends got wind of a new idea for a value-added product at a local bank board meeting a couple of years ago -- wind power. The problem for these smaller, would be producers is that the large power generating companies and other investors think the same way, but they would funnel the economic benefits of wind turbines out of rural communities.
"We could see a lot of big companies in Minnesota signing up farmers for land leases so that they [the companies] get the wind rights," says Arends, who produces corn, soybeans and hogs in the southwestern part of the state. "Wind energy is a new crop. So we're telling farmers: 'Don't sell off your wind rights.'"
As the cheapest form of renewable energy, wind has attracted the attention of farmers, investors, politicians and policymakers. Modern wind power plants can generate electricity for 5 cents or less per kWh, which is competitive with many conventional energy technologies, according to the American Wind Energy Association. Twenty years ago, the cost was nearly 40 cents per kWh. (Kilowatt-hour is the common measure of the production or consumption of electricity. One thousand watts of electricity produced or consumed in one hour is one kilowatt-hour or 1 kWh. See http://www.awea.org/pubs/documents/FAQ2002%20-%20web.PDF)
The government could do more to make wealth from the wind. The Senate energy bill, which likely won't be completed until after the November election, calls for 10 percent of the nation's electric power to come from renewable sources. If that renewables portfolio standard were increased to 20 percent, the incentive would exist for Iowa to generate 43 percent of its electricity with renewables, according to Union of Concerned Scientists statistics cited in a March 3 editorial in the Des Moines Register.
That's part of the pro-wind message that Arends and Mark Willers delivered while recruiting farmer investor in MinWind I and MinWind II, two limited liability companies structured much like cooperatives. They and 63 other farmers put up 30 percent of the $3.6 million cost of building four turbines (two per company), each of which generates 950 kilowatts of power. The cost of production is about 3 to 4 cents per kWh.
Together the farmers own 100 percent of the enterprises, with any one person allowed to own 15 percent, Arends says. The bylaws stipulate that farmers must control at least 85 percent of the companies. In terms of income, each tower will generate about $15,000 to $20,000 per year, after debt service.
Some of the larger power producers, such as FPL Energy, prefer to lease blocks of land, for about $1,000 to $2,000 per year, from enough farmers so that they can build large wind farms -- 20 to 30 turbines.
These large, 100 megawatt wind farms are "financed with distant dollars that have no connection to the community," says Lisa Daniels, director of Windustry (http://www.windustry.org). On the other hand, "these farmers [in Minnesota] are the ones doing the investing, plus the local banks are providing much of the money."
Farmers may not be able to sell energy as readily as an utility-sized operation because they can't produce it as affordably, in the range of 2 to 3 cents per kWh, says a spokesperson for FPL Energy. The company won't reveal specific cost figures for its Iowa and Minnesota wind farms.
The Florida Light & Power utility, a division of the FPL Group, legally can buy only Florida generated power.
As a utility operating in Minnesota, Alliant Energy Co. has signed a contract with MinWind I and II to buy power, says a company spokesperson. Down the road, he says, consumers nationwide may be willing to pay a premium, not just for renewable energy, but for electricity generated close to home by smaller, independent producers. | |
