How many times must Missouri voters tell their government that they want clean, local energy and its economic benefits? They should try 21 times. That’s how much more in-state economic benefit can be gained from developing local energy rather than trying to keep rates low with energy imports. In 2008, voters approved – with 66% percent … Read More
Yet another Canadian province is showing a serious commitment to the economic benefits of renewable energy development. Ontario’s “buy local” energy policy has the promise of 43,000 local jobs from 5,000 MW of new renewable energy. Now Nova Scotia is completing rulemaking for a provincial goal of 40% renewable power by 2020 that includes a 100 megawatt (MW) set-aside for community-owned distributed generation projects. The policy promises to increase the economic activity from its renewable energy goal by $50 to $240 million. … Read More
The use of tax credits as the primary federal incentive for renewable energy has often stymied cities, counties, and cooperatives from constructing and owning their own wind farm. But the temporary cash grant in lieu of the tax credit (expiring this December) has opened the door for one South Dakota cooperative and over 600 local investors:
The Crow Lake Wind Project, built by electric cooperative Basin Electric subsidiary PrairieWinds SD 1, Inc., is located just east of Chamberlain, S.D. With 150 MW of the project’s 162 MW owned by Basin Electric subsidiary PrairieWinds SD1, Inc., the facility has taken over the title of being the largest wind project in the U.S. owned solely by a cooperative, according to Basin Electric. [emphasis added]
The project is also distinguished for having local investors in addition to ownership by the local cooperative:
The entire project consists of 108 GE 1.5-MW turbines, 100 of which are owned and operated by PrairieWinds. A group of local community investors called the South Dakota Wind Partners owns seven of the turbines, and one turbine has been sold to the Mitchell Technical Institute (MTI), to be used as part of the school’s wind turbine technology program, which launched in 2009. PrairieWinds, which constructed the seven turbines now owned by the South Dakota Wind Partners, will also operate them. [emphasis added]
The key to success was the limited-time opportunity for the cooperative to access the federal incentive for wind power:
The opportunity became viable following passage of 2009’s American Recovery and Reinvestment Act, which created a tax grant option allowing small investors to access government incentives and tax benefits, making public wind ownership possible. Creating the Wind Partners for that purpose were Basin Electric member East River Electric Power Cooperative, the South Dakota Farm Bureau Federation, the South Dakota Farmers Union and the South Dakota Corn Utilization Council…
“This development model created opportunity for small local investors to have direct local ownership in wind energy and access the tax benefits previously reserved for large equity investors,” said Jeff Nelson, general manager at East River Electric. “It offers a model for others to participate in community-based wind projects.”
The South Dakota Wind Partners consist of over 600 South Dakota investors, some who host the project’s 7 turbines and many who do not. Investors bought shares in increments of $15,000 (combinations of debt and equity). Brian Minish, who manages the project for the South Dakota Wind Partners, hopes to see future opportunities for this kind of development. “There’s a lot of political benefit in letting local people become investors in the project,” Minish said in an interview this afternoon, “local ownership can help reduce opposition to wind power projects.”
Photo credit: Flickr user tinney
A new article in the journal Energy Policy supports the notion that local ownership is key to overcoming local resistance to renewable energy. The article summarizes a survey conducted of two towns in Germany, both with local wind projects, but only one that was locally owned. The results are summarized in this chart:
Guess which town has the locally owned project?
If you guessed Zschadraß, you win. With local ownership of the wind project, 45% of residents had a positive view toward more wind energy. In the town with an absentee-owned project (Nossen), only 16% of residents had a positive view of expanding wind power; a majority had a negative view.
Ownership matters, and U.S. renewable energy policy typically makes local ownership more difficult.
Community solar projects (called “solar gardens” under a new Colorado law) are blooming like wildflowers in spring, reports the Solar Gardens Institute. The 2010 state law, discussed in our Community Solar Power report, creates a new legal structure for community solar projects and requires utilities to buy 6 megawatts (MW) of energy from community solar projects by the end of 2013.
The beauty of solar gardens is that they allow people without sunny roofs (e.g. renters, shade-dwellers) to go solar by subscribing as part of a group of people to a local distributed solar project. Since most estimates of rooftop solar capacity indicate that only 20 to 25 percent of roofs are suitable for solar, community solar gardens can significantly expand the constituency for solar.
The spread of projects and interest in solar gardens is impressive, and has expanded far beyond Colorado. In their recent news update, the Solar Gardens Institute published a map indicating where there is interest in solar gardens, either for hosting a solar project or interest in pursuing a solar gardens state law.
The growth of solar gardens means more potential, more capital and more public support for solar. Check out the Solar Gardens Institute or our 2010 report on Community Solar Power for more information!
Methodical as ever, a European research group has published a study of “benefit-sharing mechanisms” to help renewable energy project developers gain local acceptance of their projects.
Communities have three types of objections to renewable energy projects – environmental, NIMBY, and opportunism. The study examines eight ways that developers can share benefits with the local community in order to address their objections to renewable energy projects.
In a sentence: people want to avoid environmental and personal harm and share in the economic benefits of their local renewable energy resources and developers will increase their chances of success by addressing local desires.
U.S. developers should take note that opposition to wind farms may not seem so perverse when seen in the context of trying to use a community’s “free” renewable resource.
Joining Ontario and several U.S. states, the Canadian province of Nova Scotia has proposed a new twist on a common clean energy program. The policy provides a guaranteed, long-term contract for wind, biomass, hydro, and tidal power producers and offers them the same return on equity provided to utiltiies. … Read More
Thisspeech by David Morris was originally presented at a conference of the Environmental Grantmakers Association 1998 Retreat in Houston, Texas, on October 28, 1998. Letme begin with what I hope is a relatively uncontroversial proposition. Rules Matter. Some of you may have a visceral reaction to the word"rules", for it conjures up notions of meddling and government bureaucracies. But the reality is that human societies always have and always will make rules that channel scientific genius, and investment capital and entrepreneurial energy in certain directions. We make the rules, and to a large extent, the rules make us.… Read More