Business Models

Rural Cooperatives Magazine features wind energy

The November/December 2007 issue of Rural Cooperatives, a magazine published by USDA Rural Development, features wind energy.

The issue includes stories about:

  • the Minwind projects in Luverne, MN,
  • how USDA 9006 grants are supporting wind energy in Iowa,
  • the technician training program at Iowa Lakes Community College,
  • the Trimont, MN wind project,
  • the Corn Plus Ethanol plant wind project in Winnebago, MN,
  • Basin Electric Power Cooperative's wind initatives,
  • Illinois Rural Electric Coop's wind turbine, and
  • a great piece about opportunities for coops to participate in wind energy.

You can read Rural Cooperatives online by clicking here.

Wind Energy Institute

2008

February 19-20; Austin Convention Center; Austin, TX

Join energy attorneys, developers, renewable energy experts, county officials, landowners, and regulators at the 2008 Wind Energy Institute. A nationally-recognized faculty—drawn from attorneys, developers, engineers, and key Texas policymakers—will provide you with the latest technological, business, and legal information regarding wind development. Topics include: power markets and nodal pricing; Certified Renewable Energy Zones (CREZ); siting, environmental, and leasing issues; and more.

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Wind Power Development Tutorial

2007

Wind power is on a 25% annual growth curve. Looming carbon caps will pressure munis and IOU’s to add wind to their power supply. The capital is flowing. And FERC is actively addressing transmission access; soon the grid will be able to absorb much larger volumes of wind-generated power.

What does it really take to bring a wind farm successfully to market? What can the numbers look like, and what kinds of business models and financing vehicles will be best suited to your unique needs?

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Wind Project Financing Structures: A Review & Comparative Analysis

This report from Lawrence Berkley National Laboratory was released in September, 2007. The report, titled "Wind Project Financing Structures: A Review & Comparative Analysis," was authored by John Harper (Birch Tree Capital, LLC), Matt Karcher (Deacon Harbor Financial, L.P.), and Mark Bolinger (Lawrence Berkeley National Laboratory), and was funded by the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy, Wind & Hydropower Technologies Program.

The rapid expansion in the U.S. wind power industry over the past few years has required the mobilization of a tremendous amount of capital. In 2007 alone, for example, an estimated $6 billion will be invested in new wind projects in the U.S. To attract this kind of capital, the wind power sector has, in recent years, developed multiple financing structures to manage project risk and allocate Federal tax incentives to those entities that can use them most efficiently. These structures are the underlying focus of this report.

Specifically, the purpose of this report is three-fold: (1) to survey recent trends in the financing of utility-scale wind projects in the United States, (2) to describe in some detail the seven principal financing structures through which most utility-scale wind projects (excluding utility-owned projects) have been financed from 1999 to the present, and (3) to help understand the impact of these seven structures on the levelized cost of energy from wind power.

The seven structures -- which range from simple balance-sheet finance to several varieties of all-equity partnership "flip" structures to leveraged structures -- feature varying combinations of equity capital from project developers and third-party tax-oriented investors, and in some cases commercial debt. Their origins stem from variations in the financial capacity and business objectives of wind project developers, coupled with the investment risk tolerance and objectives of the tax-oriented investors and debt providers.

The full report (including an executive summary) can be downloaded from:
http://eetd.lbl.gov/ea/emp/reports/63434.pdf

In addition, a high-level PowerPoint summary of the document is available at:
http://eetd.lbl.gov/ea/emp/reports/63434-ppt.pdf

[Text of this item is adapted with minor changes from from a 09/2007 LBNL press release.]

Chapter 12: The Minnesota Flip


The Minnesota Flip business model was developed in response to a unique combination of federal incentives for wind development and state policies that encouraged development of community-owned wind projects. The structure has proven a successful model for landowners and equity investors interested in partnering in the development of wind projects. This partnership allows the equity investor to take advantage of federal tax credits, while providing local owners the economic benefits of ownership.

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Chapter 11: Choosing a Business Model


There are several options for structuring a community wind energy project. Business structure options should be evaluated based on their ability to deliver low-cost wind energy and local benefits, as well as on their profitability. In general terms, business arrangements are best when they:

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