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Minnesota Wind Project Brings Local Control; SD PUC Commissioner Doesn’t Understand Economies of Scale

| Written by John Farrell | No Comments | Updated on Nov 16, 2010 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/minnesota-wind-project-brings-local-control-sd-puc-commissioner-doesnt-understand-economies/

A new 25 megawatt wind project in southwestern Minnesota will feature greater local ownership than most, using a model that Project Resources Corporation calls “Minnesota Windshare”.  The project should be online by early 2011:

Construction crews this fall are assembling 11 turbines that will make up the $51 million Ridgewind project near Lake Wilson, about 20 miles east of Pipestone. The project also will come with a new endeavor for its developer, Minneapolis-based Project Resources Corp., that the company hopes will increase the economic influence wind projects can have on a community.

The PRC project will use the familiar “Minnesota Flip” model of wind project development, where a large equity investor provides the capital and holds majority ownership for 10-15 years, along with any landowner who hosts a turbine.  The interesting twist is in the flip, where more community investors can come into the project when the equity investor departs.  This WindShare program [pdf] could allow many people who don’t have land suitable for wind or significant capital to nevertheless participate in a wind power project. 

The news story is featured in a South Dakota paper, the Argus Leader, which quotes a South Dakota Public Utilities Commissioner saying that the Minnesota-based PRC project won’t capture the economies of scale of a larger, 100 MW project in South Dakota. 

“Frankly, the South Dakota model is better,” Johnson said. “If you take a large wind farm, you get economies of scale. You carve out a piece of that where local South Dakota investors can put their money into that,” he said.

Except that the data show wind power plant economies of scale are maximized for projects in the 5-20 MW range, not 100 MW and over. 

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About John Farrell

John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power. More

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