The Clean Energy States Alliance (CESA) is a multi-state coalition of clean energy funds. Sixteen states across the U.S. have established funds to promote renewable energy and clean energy technologies.
This handbook was prepared by Windustry for the Illinois Institute for Rural Affairs at Western Illinois University in Macomb, Illinois and published January 1, 2004. The purpose of this handbook is to inform the reader about wind as a resource for generating electricity, with emphasis on Illinois as a potential host for small-scale and large-scale projects. It addresses how to assess the value of wind, the wind energy options available for landowners and communities to consider, and sources of financial assistance. Case studies are included to illustrate what has been done to develop this resource in Illinois and neighboring states. Find it the Illinois Website download here.
Small Wind Turbines in Illinois
Kendall County, Illinois
Gary Kizior installed a 10 kW Bergey turbine in December 2002, replacing his old Whisper 3 kW machine. It sits on the same 80-foot tip-up tower that Whisper machine used. This project was half funded by the Illinois Renewable Energy Resources Grant Program and was among the first small turbines in the state to receive a grant through this program.
Gary chose a Bergey Excel 10 kW generator with a 23-foot diameter rotor because it had a reputation for quality and being low maintenance. There are no regular lubrications required and he anticipates very low costs for upkeep and repair in the future. The turbine cost approximately $20,000.
Gary applied to the Illinois Department of Commerce for funding in July of 2002. Two months later he learned that his application had been approved and after submitting some additional paperwork he received his check in a few weeks. Wind turbines from 5 kW to 200 kW currently are eligible for grants for up to 50 percent of the hardware and installation costs through this state program.
This project took advantage of the exemption from zoning restrictions for agricultural projects in agriculturally zoned areas of the state of Illinois. This is a low-hassle route for farmers interested in small wind turbines.
Gary has a wind anemometer mounted 65 feet off the ground on the 80-foot tower. Data collected last year showed the annual average wind speed at this height to be 9.5 miles per hour. However, according to Gary, 2002 was a lower than average wind year, especially during the winter. The Bergey Windpower website has a calculator designed to model cash flow and payback periods for Bergey products. The calculator shows that an average annual wind speed of 9.5 mph will yield a yearly production of 7,923 kilowatt-hours, or an average monthly output of 660 kilowatt-hours. This figure is based on an open site for the turbine free of obstacles to the wind. Gary's site and electrical configuration produces a little bit less than this estimate. He uses a transformer and existing inverter to charge batteries at the same time. These both consume power and reduce the amount he can sell to Commonwealth Edison through the company’s net metering program.
Gary reports that he is saving approximately $500-$600 per year in electricity costs. ComEd reduces his monthly bill by the avoided cost rate (approximately $0.02 per kilowatt hour) for the energy that he generates. Then at the end of the year ComEd calculates the total amount of electricity he used and amount of electricity he generated at the summer and winter peak and off peak rates, resulting in ComEd sending a check for the additional amount. In the end, he will average closer to $0.09 per kilowatt-hour for the electricity he offsets by generating his own power. Simple payback on such a system is 15-20 years, after the grant award. This payback is for the turbine only; Gary used an existing tower and electronics and the cost of those is not included in this analysis. Bergey advertises their turbine and inverter as $22,900 and an 80-foot tower that tips up is $8,400. Labor would cost extra if you don’t do all the work yourself.
This project demonstrates one of the best scenarios available for landowners interested in buying a small turbine in Illinois. Gary was able to use both of the state’s strongest incentive programs for small wind turbines: ComEd’s net metering program and the state grant program. Illinois residents outside ComEd’s territory might still be eligible for the state grants if they live in the service territory of another investor owned utility. However, they will not be eligible for net metering and could only expect to receive the avoided cost rate for their excess electricity. Receiving roughly $0.02/kWh rather than closer to $0.09/kWh would significantly lengthen the payback period for the turbine.
Schoolyards and Wind Turbines: Bureau Valley School District Gets a Turbine
MANLIUS, IL--Locating a power plant in a schoolyard would have probably caused quite an uproar at PTA meetings everywhere a decade ago, but this is 2006 and times have changed. Keith Bolin, a hog farmer from northern Illinois, not only supports the idea, he took the lead in developing such a project in his hometown. Bolin, a father of three and a new grandpa, knows the importance of a good education and a quality school district. That is precisely why he spent two and a half years working to get a 660 kW Vestas wind turbine constructed at Bureau Valley High School.
He and his wife, Barbara, operate an outside farrow-to-finish hog operation in Bureau County and raise corn, oats, and alfalfa. Keith has farmed there since 1978, and he knows the land. He realized how windy it was in his area and started to discuss the possibilities of wind energy with his wife over the dinner table. They began to look into it together and after learning about successful turbines powering schools in Iowa at an American Corn Growers Association Conference in 2000 they were finally convinced that they had a viable site and good match with Bureau Valley High. They began to talk seriously with other people about the idea.
Bolin met Jesper Michaelsen from Vestas at a wind conference in Chicago and got him excited about the project. They applied for their first grant in July of 2002 and received $20,000 from the Illinois Clean Energy Community Foundation. They used those funds to hire consultant Jay Haley of EAPC Architects and Engineers to perform their wind resource assessment. Haley did an extensive study of the site and also took advantage of data from Monmouth College and the nearby Crescent Ridge commercial wind farm. That first grant was crucial to get the project moving. The school would never have been able to invest that much money just to see if the project was feasible. But with the study complete, and wind resource data in hand, they were confident that they had a good project and could move forward.
And he continued to lead the way. "I'm just a dirt hog farmer. I'm not the smartest guy on the block," Bolin said, but "somebody had to take the bull by the horns." Bolin views his greatest contribution as a trust builder between the local people of Bureau Valley and the "outsiders, the corporate people" who came to build the turbine. “For a community project, it takes a person or a group that really believes in it to lead and organize and to spur the professionals on. Somebody has to volunteer to be the leader. Paid professionals usually have other obligations - the superintendent has to focus on educating children, the engineer has other projects. That means a volunteer has to keep everything moving.” And keep it moving he did.
Bolin was able to secure an additional $480,000 from the Illinois Clean Energy Community Foundation and the Illinois Department of Commerce. He and his wife secured financing for the rest. “When it came time to find the term lender, Barb and I shopped around for the best rates on the remainder and ended up getting financing for $450,000 from Union Bank using tax free bonds at a rate of 3.37%.” They were still a little short, but made up the difference with the school’s operation and maintenance fund.
The school planned to use the turbine primarily to offset their electricity generation. Any excess generation will be sold to the local utility at their avoided cost of three cents. “We didn’t really negotiate with the local utility (Illinois Power), they’re just paying us their tariff rate. The real value of our project comes from reducing our electricity costs rather than selling the extra power. This was another reason we chose the 660 kW turbine. For us there’s not much advantage in producing much more electricity than we use. The fastest pay back comes from us not consuming $0.08-0.11/kWhr electricity since we can only sell it at $0.03 or so per kilowatt-hour.” Altogether Bolin expects total revenue for the project to be about $1.6 million. That could increase if the electricity rates go up faster than they estimated, or the turbine lasts longer than the expected 20 years.
The public raised some concerns during the process about noise, construction, and danger to birds in open-forum town meetings, where the turbine's architect, lawyers, and supporters were present to answer questions. Bolin said such consistent, informative communication minimized anxiety and skepticism about the project. "People need to be informed," he said. "They want to know, 'How's it doing?'" He added, "They're pretty proud of what they've done." Eventually, the community embraced the project, said Superintendent Rick Stoecker. “We could have put bleachers out there” during construction, lots of people were watching.”
Once the project was approved, the site was prepared and the turbine was installed in two months. The turbine went on-line in January of 2005, making Bureau Valley High School the first school in the state to install a turbine. In the first seven months of operation, the turbine's computerized records showed that it produced 646,397 kilowatt-hours of energy for the school and consumed only 2,715 for itself. Stoecker estimates that the turbine has saved the school district approximately $100,000 each year. “That’s two teacher’s [salaries] a year,” says Bolin.
The district considers the turbine to be a great way to earn some money, teach students about renewable energy, and help the environment. Bolin's next project was to incorporate the turbine into the school's curriculum, possibly as a business model, an agricultural project, and a study in engineering. Principal Terry Gutshall liked the idea and planned to start with physics class.
The project has inspired many other schools districts to look into wind energy for themselves. Stoecker has had so many calls about the project that he “doesn’t have time to name them all… We’ve had lots and lots of calls.” With so many other districts looking to cut costs around the state, Bureau Valley will create an exhibit and presentation that will be touted at state school board conventions, he said.
"This is probably the most significant thing I've ever done that's made a difference," Stoeker said of the turbine. "I'm real proud of it." Bolin is equally proud and has no regrets. “I would certainly do all this again and I wouldn’t really change much. We’ve tried to involve the community, politicians and the media; it’s been a very positive experience.”
Breaking the Mold: Rural Cooperative Wind Energy
Many cooperatives in the Midwest have been hesitant to venture into wind energy, but Sean Middleton, Manager of Engineering at the Illinois Rural Electric Cooperative (IREC), wanted to show them that it can be done. Middleton has been the driving force behind IREC’s installation of a utility-scale wind turbine in west central Illinois. “A main thrust of our project is to see economic growth for our area. We want our turbine to attract other wind developers and demonstrate that wind works here.” Illinois Rural Electric is a mid-size cooperative serving approximately 10,000 meters and 3000 miles of line in west central Illinois. The coop installed a Vestas 1.65 MW wind turbine in Pike County Illinois in 2005, making it Illinois’ first rural electric cooperative to own and operate a utility-scale turbine.
Many rural electric cooperatives in the Midwest serve areas with utility-grade wind resources but still have not built turbines due to contract constraints and other barriers. At the outset of the IREC project, many people wondered why their coop would be interested in building a wind turbine. Bruce Giffin, General Manager of the IREC, had the answer: “While it’s perfectly okay to use coal and/or natural gas to generate electricity, if you can use a renewable resource, that’s even better. It’s the right thing to do.”
Now that Middleton and the IREC have paved the way, there are many more opportunities for other cooperatives or small developers to enter the field. While the IREC’s wholesale contract limits how large their interest can be, the wind resource in Pike County could support the construction of 100 more similar-sized turbines. Giffin sees that great wind resource as an opportunity for Pike County’s residents and potential wind developers. Such a project “would add $5 million to $7 million to the tax base. Based on estimates from the turbine manufacturers, with 100 turbines, there could be $1.5 million in maintenance work income, which would produce an additional $5.25 million in economic activity in the county. If the resource is developed, there would be a significant economic development impact.” Counties other than Pike will also benefit. “If you’re a member of Illinois Rural Electric Cooperative, economic development in any of the counties it serves is good for members everywhere else. We share costs throughout the area, and growth anywhere on the system benefits all members.”
It takes more than just a great wind resource to develop a project however, as access to the market is a huge part of the siting process for a wind turbine. “Our process was very easy compared to a lot of other projects,” says Middleton. “We didn’t have to do a transmission interconnect because we’re connecting at the distribution level. Since we are a distribution utility, we’re really just feeding into ourselves. So the interconnect agreement is very short, I’m just agreeing to take power from myself. Part of this is showing other small utilities that you can successfully interconnect a wind turbine at the distribution level. Having your members use your power is a big benefit.”
In addition to interconnection issues, many small utilities are concerned with how adding a wind turbine will affect the grid. IREC ran into a few of these problems. “One of our issues was having enough load on the windiest days to make sure you have some place to put the electricity. As it turns out, some of the potentially windiest days happen in the spring when our load is lightest. This can be a real problem if you have to backfeed the power. In our situation, the transmission operator will take it, but when that power gets redistributed we have to pay for it again. So, we’d have to pay for power we generate ourselves, which we don’t want to do.” The coop was able to deal with this problem however, and they did not need to purchase new equipment. “We are using essentially the same equipment for our wind turbine as for any other kind of distributed generation. The intermittent nature of wind power is really somewhat overstated. The newer machines are designed to come up and sync with the grid automatically.”
Financing the project was not as easy. The total cost for the project was $1.878 million, plus an additional $300,000 to upgrade IREC’s distribution system to accommodate the turbine. The coop took the view that the distribution feeder is a general upgrade to the system and they didn’t count the system upgrades into the cost of the wind project. The project received a total of $886,544 from three sources, two of which were grants: $438,544 from USDA Section 9006, $250,000 from the IL Department of Commerce and Economic Opportunity, $175,000 from the Illinois Clean Energy Community Foundation (ICEF). The ICEF amount was not a grant but actually a purchase of green tags for the first ten years of operation. The project would not have been possible without these financing tools, but now it will be able to pay for itself in about ten years. Obtaining grants, takes time however, and the USDA grant took about 3-4 solid weeks of work during the 6 week submission window. “It seemed like I didn’t do anything else during that time,” says Middleton.
Additional financing for the project was obtained through the USDA’s Rural Utility Service’s (RUS) wind generation loan program, which provided term debt financing at the capital municipal rate. The total amount financed through RUS was $1.3 million, which includes the $300,000 of upgrades to the distribution system. With the financing from the RUS loan, the two grants, and the ICEF green tag sales, the project will generate power at a price just less than their wholesale power contract rate (~6.5 cents), assuming a 30% capacity factor.
Putting together the financing for the project was one of the biggest hurdles Middleton had to overcome. “Getting the grants was an absolute necessity. We wouldn’t have touched this project without getting the first grant (USDA Section 9006), but others were still necessary.” Other obstacles IREC encountered were finding wind and an interconnect point, and dealing with the county ordinances. “Another unanticipated issue was how it is to deal with local governing bodies that don’t have familiarity with wind or expertise in permitting wind turbines. We’re still working with our county. Local zoning boards are new to wind, so there are lots of hoops to jump through as they get educated. I think it would be smoother if rules were designed before projects were designed. But there just wasn’t much expertise on these ordinances in Illinois two years ago when we started this.”
Despite the obstacles, IREC’s turbine is up and running and considered a great success story for rural cooperatives. Giffen sees real progress in Illinois, as well as great untapped potential. “Since renewable resources are generally found in the rural areas served by electric co-ops like ours, we’re naturally interested in those resources, whether they are wind or biomass or methane from animal waste. When you can use those resources economically, we think everybody wins.”
Read more about the turbines on the IREC web site.
NEW ENERGY: A fresh look at how the Midwest is creating a green energy economy
Windustry has partnered with Twin Cities Public Television and Erika Johnson to tell the story of how wind, biofuels, and other renewable energy technologies are contributing to the region’s energy security, economic sustainability, and integrity of our natural resources.
NEW ENERGY premiered on Sunday, January 7, 2007 on MN TPT Channel 17, and since then it has appeared on: