THE WIND DISTRIBUTED
by Ephraim Payne
While Oregon ranks high among states pushing to develop commercial-scale wind power, solar power is the default choice for small businesses and residential power consumers who want to invest in on-site alternative energy. Yet, wind power might be a great option for those with the right site, as pioneering small wind turbine owners are finding out.
Over the past decade, the state legislature has amended energy law to enable small-scale wind power development by making it easy for customers to sell power back to utility companies. And a non-profit organization has launched a program to help landowners with windy properties fund and install small wind electric systems.
The operating definition for small wind electric systems covers turbines of 100 kilowatt (kW) production capacity or smaller. Residential turbines range from 1 to 10 kW in size. Farms and small businesses also may install generators in this range but are classified as commercial for tax credits and other incentives. Generally, these turbines produce power to offset onsite demand, a type of power production known as distributed generation.
Small generators typically produce less electricity than total onsite demand. During periods of peak generation these systems must store excess capacity in batteries or sell power to the commercial grid. In order to make such sales possible the Oregon legislature amended ORS 757.300 in 2003, obligating power companies to provide net-metering agreements for wind energy systems of 25 kW capacity or less. Under net-metering arrangements, utilities pay small customers the “avoided cost” or current market price for power transferred into the grid.
Energy Trust Backs Small Wind
The Energy Trust of Oregon (ETO) – which manages an alternative energy fund created by state law in 1999 and financed by Portland General Electric (PGE) and Pacific Power – works to facilitate small wind projects for customers of those utilities. Since 2008, the non-profit’s small wind program has helped install 15 commercial and 12 residential small wind systems across the upper Willamette Valley from Hillsboro to Dallas to Salem.
Customers of power utilities in the southern Willamette Valley do not have a third-party organization to facilitate small wind development. Representatives of the Eugene Water and Electric Board (EWEB) and the Emerald People’s Utility District (EPUD) say they are willing to offer customers help and incentives to develop small wind systems but the demand has not materialized. EPUD’s Rob Currier says that while the utility gets as many calls for information about small wind systems as it does for solar, it has yet to help install a system.
The lack of high average wind speeds in the Willamette Valley is likely at fault for the paucity of small wind development in some areas. Wind turbines produce power in proportion to the cube of wind speed, creating a steep productivity curve. The ETO’s Betsy Kauffman says proper siting is key to successful wind power development and strong average winds are the most crucial factor in site suitability. Under its small wind guidelines, the trust requires an average yearly wind speed of ten miles per hour. The trust also has a minimum property size of one acre due to setback requirements. Because wind speeds rise with height, the trust has a minimum tower height of 60 feet and recommends property owners install the tallest tower possible.
According to the Oregon Department of Energy’s Trace Megenbier, the average wind speed in much of the valley is below the ETO’s threshold. The trust, however, working with a sophisticated wind speed modeling map and site-based analysis, can target properties that have high average winds due to geographic and topographical features. Mike Stanbro, who owns a 7 acre property on Chehalem Mountain between Newberg and Hillsboro, said he had been interested in wind systems for eight years before the ETO invited him to an informational seminar. There, Stanbro says, he learned that his property was highlighted for its wind energy potential. With the trust’s help, he installed a 5.2 kW turbine on a 120 foot tower.
Stanbro’s small wind system cost approximately $40,000 to install. His ETO small wind incentive award offset a big chunk of that amount, $21,000. He also received a federal tax credit of approximately $5,000 in 2010. And, thanks to Oregon’s Residential Energy Tax Credit (RETC), which lawmakers enacted to incentivize alternative energy production, he’ll receive a $6,000 credit, the maximum amount available, over a four-year period.
Stanbro’s funding package highlights the importance of government incentives in making a wind turbine pencil out. The ETO’s small wind incentive program, a key factor in the introduction of small wind systems, provides homeowners up to $45,000 and business owners up to $80,000, potentially solving a significant part of the funding puzzle for a new wind turbine. According to industry figures provided by the U.S. Department of Energy, small wind systems cost between $3,000 and $5,000 for every kilowatt of generating capacity, cheaper than the rate for solar power. Generating systems with an 80-foot tower range from $15,000 to $50,000 for three to ten kW wind turbines.
The 2011 federal consumer energy efficiency tax credit of up to $500 per .5 kW of power capacity expires in 2016. Oregon, in addition to the RETC for homeowners, offers a Business Energy Tax Credit (BETC) for commercial small wind projects. In 2010, the state legislature scaled back the once-generous BETC, and looks to cut it further in the 2011 legislative session.
“The BETC was a little weak,” says prospective small wind system developer Dan Grimm, of the tax credit for the 10kW turbine installed his Willamina area tree farm. “The state is getting a little tight with their money.”
Grimm and his brother John created an energy division for their timber management company, High Heaven Timberlands, Inc., to develop other small wind systems. They have talked with several potential customers but have yet to start a new project. According to the ETO’s Kauffman, further scale-backs to the BETC might slow growth on the commercial side of small wind power.
In addition to providing financial incentives, the ETO helps customers determine their potential power output, pick a wind power system, find an approved contractor and negotiate local siting and building codes, which vary by county. Kauffman says the first few years of its small wind program have helped the non-profit, contractors and county agencies progress through the learning curve for a fledgling industry. And participants are excited to produce power for their communities.
“Generating energy locally, where transmission losses are not a factor, is the right thing to do,” says Stanbo, adding that, through the grid, his neighbors use any excess power his turbine produces. “Our goal is to be energy independent.”
Ephraim Payne is a freelance environmental journalist and editor specializing in forestry, fisheries and sustainable living.
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