Minwind a Farmer-Owned Concept Others Can Put to Work Date: 3/3/2009Location: MNSource: Stacia Cudd, National Association of Farm Broadcasting News Service. Audio with Mark Willers, Minwind Energy CEO (MP3 1.6 MB) Download Windows Media Player. Time: 00:03:25
Total wind power capacity in the U.S. topped 25-thousand megawatts by the end of 2008 — more than 10-times the capacity at the end of 1999. Minnesota was one of just 13 states involved in wind at the time.
But according to Mark Willers, CEO of Minwind Energy, the idea started forming long before — during the farm crisis of the 1980s. That's when Willers says a group of agricultural producers and leaders gathered together to find ways of putting more value into agriculture.
"In the beginning we looked at export costs and raising tilapia and soy crushing, and over time we've looked at soy diesel and ethanol and wind. And that's how Minwind got started. At the same time, we started having groups wanting to lease land for wind turbines. We were giving up a natural resource for many, many years that we were getting fractions of one-percent of the gross revenue back to the landowner. And as we looked at that, we didn't like that model, and back in 1999 we started working on putting together our own projects."
It took some time — but Minwind I and II, a couple of the first farmer-owned wind projects in the state of Minnesota — went on line in 2002. Since then, the project has expanded and Willers says the group plans for more expansion. But over the last 10 years, he says the Minwind concept has evolved as much as the industry has. He says that's a must for anyone looking to get involved with community-owned wind projects.
"Any community group needs to have a vision large enough to encompass change down the road. If you're going to put a business model together than can only take care of your community right now, then I think you're going to be dissatisfied or have financial issues down the road. You have to get it in place and you also have to have the right people looking to move it forward."
Seeing assisting other groups as they try to get involved in wind development as a role of Minwind — that's just one piece of advice Willers offers. He also suggests looking into who to work with as a lender and calculating the cost of capital longer term. That's because Willers says the biggest issue in wind today is liquidity in the banking world.
"Understand in wind energy the cost of a project is your largest cost, so therefore interest becomes such a large function of your budget, because it's a large capital item we're purchasing. And so, watching the rates go up and down on the interest longer-term, this long-term capital is going to cost us a lot of money 10 years from now and that's going to change the value of power."
That's partly a result of the current economic situation, but there is one way Willers says the financial crisis has helped the wind industry. He says it's made wind turbine supplies more available and easier to get. It's also resulted in some new tax credits. But he says that's actually created a big unknown.
"Who is going to be able to use effectively these tax credits in depreciation when we look at what corporate profits are doing right now? And also, looking at where long-term capital costs are going to be. What are capital costs going to be to the average business owner, large capital market, in seven, eight, nine years from now?"
According to Willers, it's really important for groups to have a solid grip on that before getting into a project.
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