Wind Turbine Considerations: Energy Conservation, Profitability and Ownership
Submitted by Marie Powell on Thu, 05/24/2007 - 16:50.
Summary:
Folks in the Midwest know about wind and how much it blows. Because energy costs are rising, many look to wind to relieve or reduce their energy bills. Energy can be harvested from the wind, but a cheaper, quicker, and more effective way to cut costs may be to first cut energy use. This is especially true for those who want to go “off grid” and supply all their own electricity.ENERGY CONSERVATION
The challenge of energy conservation is to find ways to get what we want and use less electricity.
Start with lighting. If you enter a lit room, understand that all the energy used before you entered cost you money, as well as that used after you leave. If it is an area you often frequent, consider installing fluorescent light bulbs to cut costs. In fact, fluorescent bulbs are now inexpensive enough to replace regular bulbs in most circumstances.
Energy-efficient appliances return dollars spent in savings. The refrigerator, often the most energy hungry appliance in the house, can use between 600 and 1500 watt-hours per day. Be sure to add the 10-year cost of ownership to the purchase price before deciding which model to buy.
Selecting the right appliance for the job can also cut usage and save time. A microwave may draw more power than the stove, but the short cooking time can actually save money. Also, consider the work you want done. A 1400 watt hair dryer can be replaced by a towel if time is not an issue for you.
Consider the outcome when selecting a power source. Electricity for heating space is a mismatch. The heat from low-quality energy sources like wood, solar, or gas will warm rooms as well as a high-quality energy source like an electric heater. The one-time expense for insulation to keep the heat you buy is probably the best dollars spent.
One of the biggest energy wasters is the “phantom load.” It is power used when an appliance is off, such as the clock on a stove or the TV that operates with a remote control device. Did you know that the little transformer (wall cube) hanging from the outlet that may power your phone, radio, or speakers consumes 20-50 percent its usage when the device is off? The easiest way to reduce “phantom load” is to plug these appliances into a power bar and use the switch.
The conservation message is simple: conservation saves money, replacement generation costs money. Before determining the payback on a new energy device, consider conservation where the payback is immediate. If a wind turbine is still part of your plans for the future, an energy audit will help you decide what size is needed. Minimizing the size of your turbine will minimize your investment.
MAKE SMALL WIND SYSTEMS PROFITABLE
Since small wind systems are expensive (8-10 cents per kilowatt), payback often takes longer than the expected life of the machine. Turbine prices are expected to decline as more units are manufactured and new technologies make small units more productive. But if saving money is your only consideration, energy conservation may be a better option.
Try to satisfy the market that pays the most
There are three energy markets. The wholesale market has two levels, the cheapest, “off-demand” charges apply when demand is low and excess power is available. “Demand” charges apply when electricity is in high demand. The retail price is the wholesale price plus profit margins and maintenance and administrative expenses. Designing the system to offset your power needs is the same as selling at the retail price.
Net Metering
Since the wind is not perfectly matched to energy needs, being able to “bank” or store the power in the grid is one option. Referred to as “net-metering,” excess power is deposited in the grid during high wind periods and withdrawn when the turbine does not meet the need. This effectively results in retail price since the meter reverses during input and goes forward with usage. Since pure net-metering does not allow the utility to recover margin and service expenses, they often disallow or limit the size of the turbine.
Net Billing
Net-billing is another type of grid connection. It measures (meters) electricity going to the grid and allows the utility to price that power according to their cost at that time. Seen as being fair to the utility, the buy-back total is significantly offset by the cost of the meters. Consumers argue that net-metering should be considered in the same category as conservation, a practice encouraged by most utilities.
Compare Turbines and Cost
Once your power needs are established, visit the Iowa energy site, www.energy.iastate.edu, for wind turbine comparison and cost. The site lets you compare different turbines at different heights. Although it is based on known wind data in Iowa, results should be applicable to other states if the Iowa wind data is similar to your site.
Site it right
Before purchasing a turbine, make sure you have the right site. Stay away from trees and buildings to avoid wind turbulence. Make sure there is adequate setback (distance between the tower and property line). If the local zoning board has jurisdiction, check for height allowances, noise levels, and other local regulatory issues.
OWNERSHIP OF WIND ENERGY AND TURBINES
Big wind turbines have reached the tipping point. After decades of skepticism, wind turbines are now recognized around the world as a clean, profitable alternative for fossil fuel powered generators. Tom Wind, with Wind Utility Consulting in Jefferson, Iowa, says the demand is so great that virtually all new units are sold out for the next two years. If you are in the market for a single unit, you may have to partner with a bigger development just to place an order.
It’s about money
Today’s high energy prices, combined with concerns of future carbon taxes and emission restrictions, make wind energy attractive. Only wind power can provide electricity at a fixed price for the next 20 years.
Wind energy is cheaper too. In 2000, the publicly owned Austin, Texas, utility began a Green Choice program. Customers paid a slight premium for “green” electricity (wind power). Last fall, due to higher natural gas prices, conventionally produced electricity surpassed the cost of wind power, giving the Green Choice customers cheaper power.
Wind generates dollars for the local economy
Wind power’s ability to hedge against future price hikes is surpassed by what it can do for the local economy – if it is locally owned. A 2004 General Accounting Office (GAO) report focusing on Pipestone County, Minnesota, showed a single “out of the area” owned 40 megawatt (MW) project would return $650,000 in new income.
If these turbines (2 MW each) were community (locally) owned, the county would receive $3.3 million annually. Economic comparisons using three counties in Iowa and two in Minnesota showed local ownership also produced 2.5 times more jobs and 3.7 times more local area dollar impact.
Financing can be a hurdle
At a cost of about $1.4 million per MW, few individuals are able to finance a big turbine. The USDA Rural Development program can provide financial support (25 percent grant, 25 percent guaranteed loan), but first you need a feasibility study, which USDA will cost-share at 50 percent. The study will probably include: turbine cost (including construction and delivery), wind speed data, and power purchase agreement. The remaining financing should be available through a combination of local sources.
Knowledge is power
Because most Rural Electric Cooperatives and municipal power companies lack experience buying local power, a power purchase agreement may be a challenge. Designed to serve the public, these agencies are vulnerable to public opinion and public pressure. They are also responsible for reliable power at a low price. Armed with economic data and examples of existing wind turbine interconnects, a reasonable solution will be possible.
Wind is a low quality energy resource. Captured by locally-owned wind turbines, it can be a high quality energy resource that can generate local wealth for long-term economic development. Instead of seeing it as a resource to be exported, a more sustainable approach is to consider it an economic magnet that attracts business and industry to the region.
MORE RESOURCES
For more information on load analysis and a wealth of other energy savings ideas, visit the Minnesota Energy Information Center, www.commerce.state.mn.us and click on Energy Information Center or visit the Iowa Energy Center, www.energy.iastate.edu.
To learn more about wind development and small wind turbines, download a copy of “Small Wind Electric Systems” at www.eere.energy.gov/regions , US Department of Energy Office, Golden CO, 303.275.4826 or contact Windustry, Minneapolis MN, 612.870.3461, www.windustry.org.
You’ll find more resources at the Nebraska Energy Office Wind Resource site, http://www.neo.ne.gov/renew/wind-renewables.htm and the Wind Powering America site, http://www.eere.energy.gov/windandhydro/windpoweringamerica/.
Contact: Martin Kleinschmit, 402.254.6893 or martink@cfra.org for more information.
The challenge of energy conservation is to find ways to get what we want and use less electricity.
Start with lighting. If you enter a lit room, understand that all the energy used before you entered cost you money, as well as that used after you leave. If it is an area you often frequent, consider installing fluorescent light bulbs to cut costs. In fact, fluorescent bulbs are now inexpensive enough to replace regular bulbs in most circumstances.
Energy-efficient appliances return dollars spent in savings. The refrigerator, often the most energy hungry appliance in the house, can use between 600 and 1500 watt-hours per day. Be sure to add the 10-year cost of ownership to the purchase price before deciding which model to buy.
Selecting the right appliance for the job can also cut usage and save time. A microwave may draw more power than the stove, but the short cooking time can actually save money. Also, consider the work you want done. A 1400 watt hair dryer can be replaced by a towel if time is not an issue for you.
Consider the outcome when selecting a power source. Electricity for heating space is a mismatch. The heat from low-quality energy sources like wood, solar, or gas will warm rooms as well as a high-quality energy source like an electric heater. The one-time expense for insulation to keep the heat you buy is probably the best dollars spent.
One of the biggest energy wasters is the “phantom load.” It is power used when an appliance is off, such as the clock on a stove or the TV that operates with a remote control device. Did you know that the little transformer (wall cube) hanging from the outlet that may power your phone, radio, or speakers consumes 20-50 percent its usage when the device is off? The easiest way to reduce “phantom load” is to plug these appliances into a power bar and use the switch.
The conservation message is simple: conservation saves money, replacement generation costs money. Before determining the payback on a new energy device, consider conservation where the payback is immediate. If a wind turbine is still part of your plans for the future, an energy audit will help you decide what size is needed. Minimizing the size of your turbine will minimize your investment.
MAKE SMALL WIND SYSTEMS PROFITABLE
Since small wind systems are expensive (8-10 cents per kilowatt), payback often takes longer than the expected life of the machine. Turbine prices are expected to decline as more units are manufactured and new technologies make small units more productive. But if saving money is your only consideration, energy conservation may be a better option.
Try to satisfy the market that pays the most
There are three energy markets. The wholesale market has two levels, the cheapest, “off-demand” charges apply when demand is low and excess power is available. “Demand” charges apply when electricity is in high demand. The retail price is the wholesale price plus profit margins and maintenance and administrative expenses. Designing the system to offset your power needs is the same as selling at the retail price.
Net Metering
Since the wind is not perfectly matched to energy needs, being able to “bank” or store the power in the grid is one option. Referred to as “net-metering,” excess power is deposited in the grid during high wind periods and withdrawn when the turbine does not meet the need. This effectively results in retail price since the meter reverses during input and goes forward with usage. Since pure net-metering does not allow the utility to recover margin and service expenses, they often disallow or limit the size of the turbine.
Net Billing
Net-billing is another type of grid connection. It measures (meters) electricity going to the grid and allows the utility to price that power according to their cost at that time. Seen as being fair to the utility, the buy-back total is significantly offset by the cost of the meters. Consumers argue that net-metering should be considered in the same category as conservation, a practice encouraged by most utilities.
Compare Turbines and Cost
Once your power needs are established, visit the Iowa energy site, www.energy.iastate.edu, for wind turbine comparison and cost. The site lets you compare different turbines at different heights. Although it is based on known wind data in Iowa, results should be applicable to other states if the Iowa wind data is similar to your site.
Site it right
Before purchasing a turbine, make sure you have the right site. Stay away from trees and buildings to avoid wind turbulence. Make sure there is adequate setback (distance between the tower and property line). If the local zoning board has jurisdiction, check for height allowances, noise levels, and other local regulatory issues.
OWNERSHIP OF WIND ENERGY AND TURBINES
Big wind turbines have reached the tipping point. After decades of skepticism, wind turbines are now recognized around the world as a clean, profitable alternative for fossil fuel powered generators. Tom Wind, with Wind Utility Consulting in Jefferson, Iowa, says the demand is so great that virtually all new units are sold out for the next two years. If you are in the market for a single unit, you may have to partner with a bigger development just to place an order.
It’s about money
Today’s high energy prices, combined with concerns of future carbon taxes and emission restrictions, make wind energy attractive. Only wind power can provide electricity at a fixed price for the next 20 years.
Wind energy is cheaper too. In 2000, the publicly owned Austin, Texas, utility began a Green Choice program. Customers paid a slight premium for “green” electricity (wind power). Last fall, due to higher natural gas prices, conventionally produced electricity surpassed the cost of wind power, giving the Green Choice customers cheaper power.
Wind generates dollars for the local economy
Wind power’s ability to hedge against future price hikes is surpassed by what it can do for the local economy – if it is locally owned. A 2004 General Accounting Office (GAO) report focusing on Pipestone County, Minnesota, showed a single “out of the area” owned 40 megawatt (MW) project would return $650,000 in new income.
If these turbines (2 MW each) were community (locally) owned, the county would receive $3.3 million annually. Economic comparisons using three counties in Iowa and two in Minnesota showed local ownership also produced 2.5 times more jobs and 3.7 times more local area dollar impact.
Financing can be a hurdle
At a cost of about $1.4 million per MW, few individuals are able to finance a big turbine. The USDA Rural Development program can provide financial support (25 percent grant, 25 percent guaranteed loan), but first you need a feasibility study, which USDA will cost-share at 50 percent. The study will probably include: turbine cost (including construction and delivery), wind speed data, and power purchase agreement. The remaining financing should be available through a combination of local sources.
Knowledge is power
Because most Rural Electric Cooperatives and municipal power companies lack experience buying local power, a power purchase agreement may be a challenge. Designed to serve the public, these agencies are vulnerable to public opinion and public pressure. They are also responsible for reliable power at a low price. Armed with economic data and examples of existing wind turbine interconnects, a reasonable solution will be possible.
Wind is a low quality energy resource. Captured by locally-owned wind turbines, it can be a high quality energy resource that can generate local wealth for long-term economic development. Instead of seeing it as a resource to be exported, a more sustainable approach is to consider it an economic magnet that attracts business and industry to the region.
MORE RESOURCES
For more information on load analysis and a wealth of other energy savings ideas, visit the Minnesota Energy Information Center, www.commerce.state.mn.us and click on Energy Information Center or visit the Iowa Energy Center, www.energy.iastate.edu.
To learn more about wind development and small wind turbines, download a copy of “Small Wind Electric Systems” at www.eere.energy.gov/regions , US Department of Energy Office, Golden CO, 303.275.4826 or contact Windustry, Minneapolis MN, 612.870.3461, www.windustry.org.
You’ll find more resources at the Nebraska Energy Office Wind Resource site, http://www.neo.ne.gov/renew/wind-renewables.htm and the Wind Powering America site, http://www.eere.energy.gov/windandhydro/windpoweringamerica/.
Contact: Martin Kleinschmit, 402.254.6893 or martink@cfra.org for more information.
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