challenges of small and community wind
As the U.S. wind powerindustry continues to put in thousands of
megawatts annually, contributing 35 percent of the nation's new
electric generating capacity on average since 2007, two segments of the
industry—distributed (also known as small) wind and community
wind—continue to grow and evolve, with both benefits and
challenges in each of those segments.
Given that they have grown in size and stature, it's appropriate that
the American Wind Energy Association's Small and Community WINDPOWER
Conference & Exhibition has turned into a full-scale event with
top programming and an impressive exhibition.
The conference, which this year will be held in partnership with the
Distributed Wind Energy Association (DWEA), takes place September 15 to
17 in Des Moines, Iowa. It promises to tackle the big issues in the
small and community wind arena.
Of these two industry areas, community wind is perhaps the one that is
somewhat less understood. Let's take a look at this ever-evolving area
of the wind industry and some of the issues that have emerged as
community wind grows.
Historically, wind development can be characterized as an evolution
from the corporate third-party developer/owner (i.e., independent power
producer) structure to a variety of other models that have emerged
through the years, including the more recent emergence of community
participation in project ownership and control. Ironically, this model
has developed as the wind market has grown from 2,500 MW in 1999 to
more than 45,000 MW today, with project sizes increasing from mere tens
of megawatts to hundreds.
Somewhat countering this trend of bigger projects is community wind.
Projects that can be characterized as community wind are typically on
the smaller side, ranging from a single turbine up to several dozen
megawatts. AWEA estimates that 5.6 percent of the year-end
2010 utility-scale wind market consisted of community wind projects.
The main benefits of community wind that are driving the market are
increased local economic development and local control. When the owners
are (at least partially) local, the project revenues flow primarily to
local people, businesses, and institutions. The direct, indirect, and
induced income streams from the construction and operations of
community wind projects are up to three times those of conventional
third-party, out-of-state owned projects.
Other benefits include both the tangible and intangible. Projects, for
example, allow communities to realize significant water savings, given
that wind farms use no water for generation, unlike conventional power
plants. Beyond that, communities gain the intangible satisfaction of
producing some of their own energy—a reality that instills a
greater sense of contribution and independence. With community wind
projects, communities also have the knowledge that they are
contributing to improved air quality, both locally and globally.
Community wind power also comes with its advantages from a development
perspective. Because of community wind's smaller scale, projects can
avoid the need for expensive and time-consuming transmission upgrades
and often can be connected to the distribution grid with minimal
As for challenges, community wind projects, given their
smaller size, sometimes have a hard time competing with larger projects
because they obviously do not take advantage of pre-development,
turbine purchasing, construction or operations scale.
As is the case with conventional wind, both federal and state policies
are important drivers. While the Production Tax Credit (PTC) has had
limited value to community wind, the more recent 1603 Treasury
incentive has been particularly effective in helping community wind
remain competitive, and the 30 percent Investment Tax Credit (ITC) has
broader application to community wind, as locals can make better use of
it than the PTC.
In addition to these federal incentives, the USDA/REAP program, through
grants and guaranteed loans, has been very effective in reducing the
pre-development and installation costs of rural community wind
At the state level, community wind has benefitted from some of the
policies that have helped drive the wind industry as a whole. Some 30
states now have renewable portfolio standards that require utilities to
include a percentage of renewables in their portfolios, although such
RPSs generally do not call for a certain portion of the standard to be
met with community wind.
However, in the early part of the last decade, Minnesota led the way in
community wind with a requirement for Northern States Power (now Xcel)
to purchase a total of 100 MW from community wind projects that were no
larger than 2 MW in size (projects were much smaller back then). Since
then, several states have incentivized community wind through
Community-Based Energy Development (CBED) legislation.
Today, interest in community wind is spreading across the country as
stakeholders seek more direct involvement in wind energy and its
future. Local business leaders and officials see community
wind as a means of generating local economic development while
stabilizing energy prices and improving the local and regional
For community wind to reach its enormous potential, progress must be
made in several areas, including the development of effective policies
on siting, ways of improving competitive economics and further
development of utility demand. Such hot-button issues are sure to be
tackled at the Small and Community Wind Conference &
Flowers is deputy director, Distributed and Community Wind, for the
American Wind Energy Association (AWEA).