Economic Climate Opens Door for Small Wind Energy Projects
August 18, 2009
RenewableEnergyWorld.com
With utility-scale wind project developers cash-strapped and unable to obtain financing for large wind farms, small wind power project developers see a window of opportunity.
by Sarah Lozanova, Contributor
Wisconsin, United States
Very few large-scale wind projects are able to obtain financing under the current economic climate. But falling turbine, steel and labor prices have created the perfect environment for mid-scale wind energy projects to thrive. Although total new installed capacity in 2009 may not rival the impressive 8,900 MW installed in North America in 2008, a golden opportunity exists for smaller wind development.
Small wind projects range in size from 100 kW to 30 MW and typically serve schools, farms, rural villages, businesses and municipal utility companies. Because these type of installations can access funding from various sources, they are less vulnerable to the credit crisis than their large-scale wind farm counterparts.
Small rural Iowa utility, Waverly Light and Power financed two 900-kW turbines to be installed in 2008 and 2009 with Clean Renewable Energy Bonds (CREBs), tax-credit bonds that can be used to finance renewable energy projects. The bonds provide, in effect, interest-free financing for clean energy projects. The recently passed stimulus bill provides up to $1.6 billion in new CREBs but in order to take advantage of them, bondholders must have a tax liability.
Universities often have other means for raising funds for small wind projects. At Appalachian State University in Boone, North Carolina, students agreed to pay an additional $5 fee per semester towards the installation of a 100 kW wind turbine this year.
Carleton College in Northfield, Minnesota paid for the installation of its 1.65-MW turbine in 2004 from its operating budget and a second turbine may be added in the near future thanks to the generosity of a donor. Rob Lamppa, director of energy management at the college feels that now is definitely the right time to install this second turbine.
“We’re really hoping we can move forward on this project now,” said Lamppa. “I’m not so sure that if we wait even a year that we will have the same opportunity. I think there is only a limited window for a wind project of this size. Once it is easier to obtain credit, the developers will snatch up all the turbines.”
In Lamppa’s experience, last summer manufacturers only wanted to sell large quantities of turbines. Now they are eager to work with the college and prices are 10-15 percent lower.
Lamppa is not alone. In the past few years, many utility-grade turbine manufacturers weren’t interested in selling small quantities, but now stagnant inventories and a growing sense of desperation are pushing them toward smaller markets.
“In the heat of all the development that was going on last year, there was definitely the feeling that smaller projects were getting squeezed,” says Kathy Belyeu, manager of industry information services for the American Wind Energy Association (AWEA) . “If you weren’t able to go to the turbine manufacturer and purchase a big quantity of turbines, they weren’t really going to talk to you.”
With the economic crisis taking its toll on wind energy development in 2009, large turbine manufacturers are paying more attention to the mid-scale market, giving smaller projects greater accessibility to utility-grade turbines.
“A municipal utility company I’m working with in Illinois is looking at General Electric and Vestas turbines, which were unavailable to them for several years due to the small size of their project,” says Wes Slaymaker, owner of wind-farm consultancy WES Engineering.
Read more:
Small Wind Project O&M Concerns Mitigated
Incentives for Small Wind Project Development
RenewableEnergyWorld.com
With utility-scale wind project developers cash-strapped and unable to obtain financing for large wind farms, small wind power project developers see a window of opportunity.
by Sarah Lozanova, Contributor
Wisconsin, United States
Very few large-scale wind projects are able to obtain financing under the current economic climate. But falling turbine, steel and labor prices have created the perfect environment for mid-scale wind energy projects to thrive. Although total new installed capacity in 2009 may not rival the impressive 8,900 MW installed in North America in 2008, a golden opportunity exists for smaller wind development.
Small wind projects range in size from 100 kW to 30 MW and typically serve schools, farms, rural villages, businesses and municipal utility companies. Because these type of installations can access funding from various sources, they are less vulnerable to the credit crisis than their large-scale wind farm counterparts.
Small rural Iowa utility, Waverly Light and Power financed two 900-kW turbines to be installed in 2008 and 2009 with Clean Renewable Energy Bonds (CREBs), tax-credit bonds that can be used to finance renewable energy projects. The bonds provide, in effect, interest-free financing for clean energy projects. The recently passed stimulus bill provides up to $1.6 billion in new CREBs but in order to take advantage of them, bondholders must have a tax liability.
Universities often have other means for raising funds for small wind projects. At Appalachian State University in Boone, North Carolina, students agreed to pay an additional $5 fee per semester towards the installation of a 100 kW wind turbine this year.
Carleton College in Northfield, Minnesota paid for the installation of its 1.65-MW turbine in 2004 from its operating budget and a second turbine may be added in the near future thanks to the generosity of a donor. Rob Lamppa, director of energy management at the college feels that now is definitely the right time to install this second turbine.
“We’re really hoping we can move forward on this project now,” said Lamppa. “I’m not so sure that if we wait even a year that we will have the same opportunity. I think there is only a limited window for a wind project of this size. Once it is easier to obtain credit, the developers will snatch up all the turbines.”
In Lamppa’s experience, last summer manufacturers only wanted to sell large quantities of turbines. Now they are eager to work with the college and prices are 10-15 percent lower.
Lamppa is not alone. In the past few years, many utility-grade turbine manufacturers weren’t interested in selling small quantities, but now stagnant inventories and a growing sense of desperation are pushing them toward smaller markets.
“In the heat of all the development that was going on last year, there was definitely the feeling that smaller projects were getting squeezed,” says Kathy Belyeu, manager of industry information services for the American Wind Energy Association (AWEA) . “If you weren’t able to go to the turbine manufacturer and purchase a big quantity of turbines, they weren’t really going to talk to you.”
With the economic crisis taking its toll on wind energy development in 2009, large turbine manufacturers are paying more attention to the mid-scale market, giving smaller projects greater accessibility to utility-grade turbines.
“A municipal utility company I’m working with in Illinois is looking at General Electric and Vestas turbines, which were unavailable to them for several years due to the small size of their project,” says Wes Slaymaker, owner of wind-farm consultancy WES Engineering.
Read more:
Small Wind Project O&M Concerns Mitigated
Incentives for Small Wind Project Development
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