Post 5: Diversity and Sustainability on the Community Level
Posted By: Mary Templeton
Posted: 10/7/2009
Have you ever considered the possibility of investing in and owning your own renewable energy project? I am not referring to putting up a wind turbine or solar panels at your house, although that could make sense for some. What I am referring to is Community Based Energy, where people in a particular community decide to co-develop their property, their farms, or common property within the community into a renewable energy project; a project that they invest in, own, and profit from.
Let's take wind, for example. You have probably heard of farmers, or large property owners, or groups of property owners leasing their land to developers who invest in installing large utility scale wind turbines to sell the energy they produce back to a utility in a long term contract called a power purchase agreement (PPA).
The concept of Community Wind does not focus on an outside developer owning and developing the wind farm for the developer's benefit, but rather the community, or members of the community, coming together to invest in a project that serves its own needs and provides a financial and energy benefit. The distinction is that the community owns at least a portion of the development.
Community Wind projects stimulate the local economy by keeping energy investments local, creating new jobs, and broadening the tax base. It is likely that support for wind energy will increase, as local people become deeply involved.
In Michigan, there are several examples of people committed to exploring community renewable energy projects on small and large scales. The DEQ state facility in Bay City just installed a 50 KW wind turbine to power its facilities. Wyandotte Municipal Services, a community owned municipal utility, is far down the path of creating a community wind project. It expects to have two to five 1.5 to 2.5MW turbines on line in the fall of 2010. Groups within the communities of Empire and Northport have formed to explore the possibility of attaining 100% of energy from renewable sources. And the list goes on!
There are things to take into account when considering a Community Wind project, such as:
• Wind – without an average wind speed of at least 5.6 meters/second (12.5 miles per hour), the economics just don't make sense. With continued technology enhancements, this may change over time, but for now, the better the wind, the better the financial payoff.
• Access and proximity to transmission lines that can accept the power the project will provide.
• Land – the planned land use has to be consistent with a wind project development.
• Be in an area where environmental conditions like wetlands, protected species, and sensitive areas can be protected or mitigated.
• Local ordinances that are favorable to wind project development and a community educated on wind is critical.
• Determine how best to take advantage of the various tax incentives and legislation currently available.
• If all of the conditions are right, you'll need to have a buyer, like a utility, for the power you generate.
Why would you want to take on the additional risk and responsibility of owning a complex, capital intensive investment like a wind farm, when you can lease your land to a developer? Some sources say that owning a wind farm can double or triple the income to landowners, compared to receiving lease payments1.
There are complexities that will need to be considered, and you should engage professionals with industry experience, credibility, and success with similar projects. Finding and using such experience will help create a significant contribution to sustainability at the community level by enhancing the triple bottom line of people, planet, and profit.
1United States Government Accountability Office. Renewable energy: wind power's contribution to electric power generation and impact on farms and rural communities.