Wind Energy Project Ownership (Community Based)

March 15, 2012, 4:56 pm
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Establishing a wind energy system is expensive, and involves costs beyond the purchase and installation of the equipment.[1] The creation, certification, verification, transfer, and tracking of Renewable Energy Credits (RECs) can severely affect the economic feasibility of an individual project. Therefore, wind turbine owners will benefit from taking advantage of economies of scale. Municipalities, school districts, utilities, and ambitious developers have created “wind energy co-operatives” to manage the REC issues.

Aggregation is, among other things, the bundling of several wind energy projects together so that they are treated as one larger project (when purchasing turbines, interconnecting, maintaining a project, or managing RECs, for example,) in order to spread out costs and improve project economics.[2] For example, Minnesota’s WECS Aggregation Program proposes to “...create a clearinghouse to coordinate and arrange umbrella sales arrangements for groups of individuals, farmstead property owners, farmers' cooperative associations, community-based energy project developers, school districts, and other political subdivisions to aggregate small-volume purchases, as a group, in order to place large orders for wind energy conversion systems....”[3] The Massachusetts Technology Collaborative has launched a $4 million community wind collaborative to provide technical assistance, feasibility studies, and equipment purchasing aggregation for municipalities wishing to install small wind projects.[4]

There is no single, universally accepted definition of what constitutes a community wind power project, but there are several characteristics that they all share. Community wind projects are generally on the smaller side (less than 20 mW) and are locally initiated and owned. They can range from single turbines on school grounds to multi-turbine installations jointly owned by local investors and landowners. Occasionally the managing entity may opt for one large, commercial size, cooperatively owned turbine rather than a small distributed generation model if the electricity is going to be sold directly into the grid rather than consumed on-site.

Key concepts of community wind development are that the benefits are realized locally, labor and construction costs stay within the community, and successful projects can drive continued reinvestment. These benefits often provide community wind projects with more favorable local support than foreign-owned commercial projects.[5] Municipal ownership may lower the cost of a wind power project as compared with private ownership.[6]

Overall, the basic structures of community wind project ownership are: (A) school districts; (B) municipal; (C) cooperative; and (D) tribal.[7]

School Districts

School districts are ideal wind project owners in urban and suburban areas because they naturally address two major hurdles of community opposition: siting and public education. For example, the Olathe School District in Kansas has created a “green efficiency program” by incorporating a 35-foot turbine that generates 450 kWh per month.[8] The turbine powers a concessions building while simultaneously educating the district’s students.[9] In Texas, the Shallowater School District has installed five wind turbines on its various school properties, resulting in an estimated energy savings of 25-35%, or $75,000 per year.[10]

Besides the availability of low-cost financing, school-owned projects are eligible for Renewable Energy Production Incentive (REPI) payments of 2.1¢/kWh.[11] The Forest City Community Schools in Iowa operates a wind turbine that provides 60% of the energy needs of its elementary, middle, and high schools, saving the district approximately $1.6 million in electricity costs over its lifetime.[12] Similarly, the Spirit Lake Community Schools have built two turbines on school grounds with a combined capacity of 1 mW.

Since schools often produce energy for their own consumption, they are unlikely to take part in any REC sales or marketing schemes.[13]


Municipal utilities are capable of installing wind turbines and have similar benefits to school-owned systems. The community is more likely to treat local municipal projects favorably, and the projects may be eligible for REPI payments or lower-cost financing.

The RECs can be bundled with the electricity and sold at a premium to local ratepayers through a green power marketing program, or the RECs can be separated from the underlying electricity and sold outside the municipality. From a municipal perspective it will usually be more economical to construct few, large turbines rather than many smaller, distributed systems.

For example, the Moorehead Public Service (MPS) in Minnesota established two large 750 kW turbines on municipal land.[14] MPS established “Capture the Wind,” a voluntary green power subscription program and sold all of the green attributes to local subscribers at a premium of no more than 1⁄2-cent per kWh.[15] Alternatively, it could have sold the RECs unbundled as a separate product. Although this example uses large as opposed to small turbines, it demonstrates that a municipality can create and market the environmental attributes of a REC.


Electric cooperatives can collaborate with several smaller projects to supply RECs to green marketing programs. The cooperatives serve essentially the same role as the marketing departments of the municipal utility green power programs, but the cooperatives do not themselves create or supply any electricity. The cooperatives may invest in and promote sustainable energy projects, although it is not required by the business plan of a cooperative.

One cooperative project that took the initiative to recruit, site, partially finance, build, and assist in contracting for REC sales is Our Wind Co-op (“Our Wind”), based in Seattle.

The creation of Our Wind began in 2001 when the Northwest Sustainable Energy for Economic Development (“NWSEED”) and the Northwest Cooperative Development Center (“NWCDC”) collaborated with the Bonneville Environmental Foundation, the Last Mile Electric Cooperative, and the National Renewable Energy Laboratory (NREL) to coordinate a cooperative business model for small wind.[16] It was incorporated as a non-profit in 2003.[17]

Our Wind set out to establish ten new small wind turbines for private rural customers in Washington and Montana. Considering a wide variety of criteria, the co-op reviewed over 250 sites and evaluated each potential location based on the wind resource class, accessibility to grid connection, favorability of grid connection policies, the ability of the project to be replicated, and the trendsetting effect on the small wind community.

The selected hosts (landowners) and Our Wind signed a “Host Agreement Contract” defining the responsibilities of the hosts, liability protection, insurance, duration of the contract, and others.[18] The project hosts received substantial early support in the form of start-up contribution investments and the pre-sale of RECs.[19]

The role of aggregation is two-fold in this scenario. First, aggregation of several projects’ worth of purchasing and labor costs led to a price drop of the average 10 kW system from approximately $35,000 to approximately $20,000.[20] Further, the pre-sales of RECs reduced the expected payback period from fifty five years to seven years.[21] Secondly, the RECs from the ten projects were aggregated and sold en mass to non-profits such as Bonneville or to retailers such as The Green Office.[22]

Our Wind claims that the RECs they produce are of superior quality, and are aggregated, marketed, and sold as “value added” due to their benefits to society. Since the RECs represent the benefits and attributes of the sustainable electricity produced, the Our Wind RECs represent the specific benefits and attributes of those turbines that created them.

In this case, the “value added” is, among other things, domestic energy independence, atmospheric preservation, support of favorable wind energy policies, support of local ownership of small scale turbines, the resulting effects on farmers and rural landowners, financial compensation of the landowners, and the knowledge that relieving wind projects from debt frees up capital to support new ones. Overall, Our Wind has demonstrated the potential success of community ownership and cooperative management, and serves as a role model for future cooperatives.

The cooperative structure can similarly be applied to commercial-grade turbines. For example, the Illinois Rural Electric Cooperative has installed a 1.65 mW turbine, partly made possible by a grant from the Illinois Clean Energy Community Foundation, which essentially pre-purchased all of the future RECs for the duration of its 20-year lifespan.[23]


Native American tribes are in a uniquely advantageous position to create large amounts of wind energy because their collective lands comprise “ of the richest wind regimes in the world.”[24]

Although some of the examples presented here are of large, commercial grade turbines rather than small, residential scale ones, they are worth discussing because of the creativity used in getting the projects online, the potential magnitude of electricity that tribes can provide, the role of RECs in financing the windmills, the cooperative approach used, and the fact that they fit into the local ownership model. Any example mentioned here is tribally owned.

The pioneer tribal project is a 750-kW turbine installed in 2003 on the Rosebud Sioux Indian Reservation in South Dakota.[25] The tribe had been taking wind measurements since 1995 and found itself surrounded by very powerful wind resources.[26] This finding proved to be commanding leverage in securing a cooperative grant with the United States Department of Energy.[27]

The turbine sits on the Tribe’s side of the meter, supplying electricity first to the Rosebud Casino and motel, with the excess electricity sold to various regional entities.[28]

The tribe has contracted for the sale of their RECs to the U.S. Air Force and the Vermont-based environmental services group Native Energy, LLC, a broker that markets the RECs to eco-conscious customers, including Ben & Jerry’s Ice Cream.[29]

Native Energy’s “WindBuilders,” which is a retail green electricity product based on the Rosebud turbine, has received the highest accolades from the Power Scorecard, a well regarded green energy ratings organization.[30]

Following the Rosebud Sioux project, a smaller, 66 kW turbine was installed in 2005 at the Fort Berthold Reservation, South Dakota.[31] The RECs it produces also are sold to Native Energy, LLC.[32]

The Rosebud Sioux project was a success because its collaborative mixture of elements made the undertaking attractive to investors. The combination of REC sales, government grants, and utility loans afforded the heavy up-front capital that wind projects demand.

For remote areas on reservations that are not serviced by the national grid, windmills can provide remote power, or “distributed generation.” For example, the electric distribution system that feeds the Duck Valley Indian Reservation, located on the Nevada-Idaho border, has been chronically susceptible to blackouts, and multi-day outages are not uncommon due to the remoteness of the infrastructure.[33]

The 453 square mile reservation, home to only approximately 1,100 Shoshone and Paiute members, is situated in one of the most remote and thinly populated areas of the lower 48 states. Having recently completed its wind feasibility study, the Tribe has made an official Request for Proposals, and is seeking a partner to develop wind energy.[34]

One tribal company, Native Green, has launched a concerted effort to help tribes to become principal owners of turbines. The Seattle-based company is working with the Passamaquoddy Tribe in Maine to install a 50 mW turbine to supply power to homes on a private grid and allows the tribe to sell back additional energy to private utilities.[35] The price per kWh of electricity there is very high due to the vast distances that the electricity must travel. Wind turbines would generate a significant amount of power for Passamaquoddy Bay and would lower residents’ electric bills.[36]

Declared company co-founder Litefoot, a Cherokee entrepreneur; “If we can bring small wind projects into the community and enable the tribal leadership to tangibly power houses, for a majority tribal members who are barely breaking even on a month-to-month basis, instead it becomes, 'I can provide power to my house and a computer for my kids and heat my home - those are real tangible [benefits].'”[37]

caption Wind Energy in the Great Plains. Phote:

Tribal wind energy is significant in that it can reshape the American energy scene. Between approximately twenty reservations in the northern Great Plains over 300 gigawatts (gW) (or 0.3 terrawatts, or “tW”) of wind energy are waiting to be harvested. Some estimates are even higher, claiming that the Dakota winds in the northern Great Plains alone could meet the nation's entire electrical needs with wind power.[38]

For comparison, the United States generated approximately 21,658 tWs of electricity domestically across all sectors in 2008 and consumed approximately consumed 29,102 tWs of electricity that same year, including power generated from imported petroleum.[39]


  1. ^ The cost of wind energy has come down 85 percent in the last 20 years. See Natural Resource Defense Council, Wind, Solar and Biomass Energy Today, available at (last visited Dec. 9, 2009).

  2. ^ Windustry, Wind Resources, available at (last visited Dec. 16, 2009).

  3. ^ 2009 Minn. Laws. Chap. 216F Sec. 09, available at (last visited Dec. 9, 2009)

  4. ^ Newsletter, Massachusetts Renewable Energy Trust, Community Wind Collaborative Kicks off $4M Program, available at (last visited Jan.4, 2010).

  5. ^ Environmental Law & Policy Center, Community Wind Financing Handbook, 2, available at (last visited Dec. 17, 2009) [hereinafter “Handbook”].

  6. ^ Municipal ownership could lower the cost of a wind power project by over 30% compared to private ownership. See Steve Clemmer, Strong Winds: Opportunities for Rural Economic Development Blow Across Nebraska, Union of Concerned Scientists, 2001, and Ryan Wiser and Edward Kahn,Alternative Windpower Ownership Structures: Financing Terms and Project Costs, Lawrence Berkeley Laboratory, 1996, available at (last visited Dec. 15, 2009).

  7. ^ Handbook, supra note 5, at 2.

  8. ^ Ryan Thomas Trahan, Social and Regulatory Control of Wind Energy – An Empirical Study of Texas and Kansas, 4 TJOGEL 89, 100(2004)

  9. ^ See Note 8

  10. ^ See Note 8

  11. ^ Qualifying systems such as wind or solar are eligible for annual incentive payments for renewable energy electricity produced and sold at a rate of 1.5¢ per kilowatt-hour in 1993 dollars (indexed for inflation) for the first 10-year period of their operation, subject to the availability of annual appropriations in each federal fiscal year of operation. See 42 USC § 13317 (2005).

  12. ^ See Forest City School's Wind Turbine website, available at (last visited Dec. 17, 2009).

  13. ^ See Spirit Lake Community Schools Wind Project website, available at (last visited Dec. 17, 2009).

  14. ^ Moorhead Public Service, Capture the Wind FAQ, available at (last visited Dec. 9, 2009).

  15. ^ Handbook, supra note 5, at 3.

  16. ^ Newsletter, Northwest Cooperative Development Center, Spring 2003, available at (last visited Dec. 21, 2009).

  17. ^  Presentation, Heather Rhoads-Weaver, Our Wind Co-Op: Exploring Joint Green Tag Financing and Marketing Models for Energy Independence, 4, available at (last visited Jan. 4, 2010).

  18. ^ See Note 17

  19. ^ Our Wind receives project financing from Federal, state, utility, not-for-profit, and private sources. Presentation Notes, Heather Rhoads-Weaver & Jennifer Grove, Our Wind Co-Op: Exploring Joint Green Tag Financing and Marketing Models for Energy Independence, 16, available at (last visited Dec. 15, 2009).

  20. ^ See Note 19, at 7

  21. ^ See note 19, at 7

  22. ^ The Green Office’s website is Bonneville Environmental Foundation’s website is

  23. ^ Windustry, Illinois Rural Electric Cooperative: Community Wind Project, available at (last visited Dec. 15, 2009).

  24. ^ Bob Gough,Falling Water, Rising Wind, World Watch (July/August 2005), available at (last visited Dec. 12, 2009) [hereafter “Falling Water, Rising Wind].

  25. ^ Press Release, Native Energy LLC,Rosebud 750-mW Turbine Installed, February 27, 2003, available at (last visited Dec. 21, 2009) [hereinafter “Native Energy”].

  26. ^ See Note 25.  The reservation’s wind is a class 5/class 6 resource, with speeds estimated to average 17.9 mph at 155 feet above ground. At this speed the turbine can produce enough electricity for the equivalent of about 325 houses per year, and is expected to produce more than two million kilowatt-hours per year.

  27. ^ See Note 25.  The Tribe also negotiated the first U.S. Department of Agriculture (USDA) Rural Utilities Service loan for a tribal wind energy project.

  28. ^ Rosebud Sioux: First Tribe in the Nation to Sell Wind Power, NAWIG News (Winter 2003). Entities purchasing the excess electricity include Basin Electric for local use, Ellsworth Air Force Base for "green power", Nebraska Public Power, and the Western Area Power Administration

  29. ^ Native Wind, Timeline of Accomplishments, available at (last visited Dec. 9, 2009).

  30. ^ “NativeEnergy's WindBuilderssm program offers consumers the opportunity to help finance construction of a new Native American wind energy project by purchasing a share of the renewable energy credits it will generate. NativeEnergy is currently supporting construction of the Rosebud St. Francis wind turbine in South Dakota.” Power Scorecard, Ratings, available at (last visited Dec. 11, 2009).

  31. ^ A. Jiminez, et al., WIND POWER ACROSS NATIVE AMERICA: OPPORTUNITIES, CHALLENGES, AND STATUS (March 2009), National Renewable Energy Laboratory, available at (last visited Dec. 14, 2009).

  32. ^ Presentation Slides, MANDAN, HIDATSA, & ARIKARA NATION,Utility Wind Scale Turbine Demonstration Project on the Fort Berthold Reservation in North Dakota, 17, available at (last visited Dec. 14, 2009).

  33. ^ U.S. Department of Energy's Office of Scientific and Technical Information,A Feasibility Study of Sustainable Distributed Generation Technologies to Improve the Electric System on the Duck Valley Reservation: FINAL REPORT (June 2005) available at;jsessionid=6ECACF57175D5C70D5FB09F23E4E5C79?purl=/859903-joBvKO/ (last visited Dec. 21, 2009).

  34. ^ Shoshone-Paiute Tribe, Request for Proposal, available at (last visited Dec. 21, 2009).

  35. ^ Shadi Rahimi, Native Company Launches Wind Energy Project, Indian Country Today (Apr 10, 2008), available at (last visited Dec. 21, 2009) [hereinafter “Shadi”]. See also U.S. Department of Energy, Wind & Hydropower Technologies Program, Passamaquoddy Tribe, available at (last visited Dec. 17, 2009).

  36. ^ Pamela Leavey, Harness The Wind, The Democratic Daily, (March 24, 2009) available at (last visited Dec. 21, 2009).

  37. ^ Shadi, supra note 35

  38. ^ Shadi, supra note 35

  39. ^ U.S. Energy Information Administration, Annual Energy Review 2008, (June 2009), available at (last visited Dec. 21, 2009). For data on consumption, see Tables 1.3, 2.1b-2.1f, and for data on production, see Table 1.2. See also U.S. Department of Energy, Annual Energy Review 2008, 5, available at (last visited Dec. 21, 2009).



(2012). Wind Energy Project Ownership (Community Based). Retrieved from


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