Farming wind

River North-based company navigates renewable energy economy

03/10/2010 10:00 PM

By KATHARINE LAU
Medill News Service

No Comments - Add Your Comment

Drive a couple of hours southwest of Chicago, down a two-lane county road, through cornfields and cow pastures and into a town called Tiskilwa, Ill. Skyscrapers disappeared miles ago. Follow the bend in the road and look out the passenger-side window.

Strategically placed on the hill, several 400-foot, white wind turbines peek through the hazy, gray fog. Even the snow on the ground seems off-white in comparison. The only sounds come from a train’s faint whistle and the whirring as each of the turbines’ three blades cut through the air.

It’s a different world from the traffic and noise outside of the River North office building where Midwest Wind Energy LLC operates.

Formed in 2003 by Stefan Noe and Michael Donahue, Midwest Wind Energy seeks to turn wind projects from concept to construction-ready. With nine employees, the company has developed projects in Illinois, Wisconsin, Iowa and Nebraska, and is venturing into the Rocky Mountain and Great Plains states.

Noe began developing wind energy projects in 2000, forming a company called Illinois Wind Energy LLC, which would later become MWE.

The firm does not build or operate the wind turbines. Instead, it scouts for potential usable farmland and negotiates leases with local farmers to plot out the turbines’ locations. It works with local communities to educate them about the turbines and secures the necessary permits from local and state governments. Specifically, these are easements for the underground cable that will connect each of the turbines to a central collection system and for gravel access roads necessary to reach the turbines for maintenance.

MWE works with the Federal Aviation Administration to ensure the turbines will not pose a danger to air navigation and completes avian assessments to make sure threatened or endangered bird species will not be harmed.

Development of a wind farm typically takes about two to four years, and construction anywhere from eight to 18 months, depending on the size and scope of the project, according to Timothy Polz, the company’s senior project developer.

The company often partners with energy companies that help finance and eventually construct, own and operate the wind farms upon completion. Since 2005, MWE has been in an exclusive partnership with Irvine, Calif.-based Edison Mission Energy Inc., an indirect subsidiary of Edison International Inc., and they have worked together on the Elkhorn Ridge Wind Farm in Peoria, Neb., and the Big Sky Project in Ohio, Ill., East Grove, Ill. and May, Ill., all wind farms currently under construction. In exchange for development funding, Edison has the right to purchase the project before it is offered to others.

Regarding the Tiskilwa venture, Polz said that in 2000 it was the success of MWE’s power-purchase agreement with Chicago-based Exelon Corp.’s Commonwealth Edison Co. that “made the project a reality.”

“At that time, no one else was really developing wind in Illinois. There were a few other developers considering developing wind energy in Illinois,” Polz said. “But Illinois Wind Energy was the first to go head-on into developing wind energy in Illinois.”

At that point, he recalled, it wasn’t all that clear that wind would work in Illinois.

That first project by Illinois Wind Energy resulted not only in the wind farm in Tiskilwa, called Crescent Ridge, but also in a partnership between Noe and Donahue, president and executive vice president, respectively, of MWE.

Since then, the company has developed five projects, totaling approximately 567 megawatts of wind energy. The company has one project under construction and another nine in development. While Crescent Ridge is the smallest project, with 33 turbines, and a capacity of 54 megawatts, Big Sky will be the largest with 114 turbines and a capacity of 240 megawatts.

A megawatt of wind can provide enough energy for about 300 to 500 average households, according to Polz, but the infrastructure needed to produce wind energy comes with a hefty price tag.

“Some of our larger facilities, some of our 200-megawatt-plus developments, can cost upwards of $3 million to develop, and then we can turn them around and sell those projects for in the range of $60,000 to $100,000 per megawatt,” Polz said. The Big Sky project, for example, is “about a half a billion dollar investment” for MWE’s partner, Edison, according to Polz.

The projects have not come without challenges.

Cal Zehr, pastor of Willow Springs Mennonite Church, has lived in Tiskilwa for 18 years. Among the concerns he heard in the beginning were that the wind turbines made a noisy, swishy sound, developed stray voltage which would endanger humans and animals and threw ice off the blades.

“We have three wind farms up and running, and they seem to be going along pretty well,” said Dale Anderson, county board chairman of Bureau County. “I think now people are okay with them. There were some objections initially to them.”

Potential changes in property value and the related issue of aesthetics are overwhelmingly the greatest concerns, according to Polz.

“Typically people don’t want to or don’t think they’re going to want to look at wind turbines,” Polz said. “Unfortunately, there’s just no way that we can disguise or hide our 400-foot structures.”

Polz maintains that numerous studies done in the U.S. have shown that the installation of wind turbines has had “no significant impact to property values.”

Since the wind turbines have been in operation, Reverend Zehr has not heard any complaints.

“I think it’s great to have wind turbines up and running on our horizon,” he said. “The wind keeps blowing so they provide clean energy, income for landowners and a broader tax basis for owners.”

Andrea Horst, a clerk at Tiskilwa Library, agrees. She has lived in the town for 10 years and said she has “always said that they’re a very good thing.”

While she acknowledges that the wind turbines are inconvenient for some people —big trucks turning around in driveways and leaving ruts, interruptions with television reception, lights of the central collection systems on all the time — she also sees the benefits.

“I think wind energy is such a positive thing,” Horst said. “I think the number of wind turbines is going to increase and just become part of the landscape, and people will say, remember the time when we didn’t have these? Just like telephone poles.”

In 2007, Illinois, along with 20 other states, passed a “renewable portfolio” law, requiring electric utilities to obtain 25 percent of their electricity from renewable sources by 2025, according to the Illinois Wind Energy Association. The first wind farm in Illinois was constructed in 2003, and since then the state has become “home to over 1000 megawatts of wind generation capacity — enough to power 300,000 homes.”

Illinois has the potential for 10,000 megawatts of wind generation capacity, according to the wind energy group. MWE’s goal is to have in the ground at least 1,000 megawatts.

Despite the possibility for significant growth, the wind energy industry is not without limitations.

“The one issue that all renewable energy has, whether it’s solar or wind or whatever, is that it’s intermittent, so you have to take the power when it’s generated,” Polz said. “So you have to start from the concept that all renewables are kind of faced with that burden or that issue.”

In that regard, one source of renewable energy does not have an advantage over the other, according to Polz. However, Polz still believes that “wind right now is by far the most economical renewable energy resource out there.”

Costs for developing renewable energy sources are expected to decrease, meanwhile. The American Recovery and Reinvestment Act of 2009 added and amended several energy tax incentives for businesses, utilities, government institutions and consumers, according to the U.S. Department of Energy. The stimulus bill, as the recovery act is generally called, allowed for a range of tax credits for wind projects.

Polz said all of these incentives, along with additional federal legislation, “such as a federal renewable energy standard,” are good first steps which will help spur development both in the renewable energy industry and in the overall U.S. economy.

“If the United States shows a long-term commitment to renewable energy, you’re going to see a lot of these manufacturers locate facilities in the States, and you’re going to see a lot of domestic companies spring up or get into renewable energy development,” Polz said. “And I think it really will be a huge benefit for the U.S. economy.”



No Comments - Add Your Comment