Previous Community Wind Projects of the Month
Fire Island Wind Project - Alaska
In landmark renewable energy news for Alaska, the 17.6-MW Fire Island Wind Project is now online and generating power, concluding another rather remarkable story in American wind power development.
The facility, jointly developed by Summit Power and owner Cook Inlet Region, Inc. (CIRI), is the largest wind project currently online in the state. The wind farm is located on Fire Island in Cook Inlet, three miles west of Anchorage. Rural cooperative Chugach Electric Association (CEA), the largest electric utility in Alaska, will buy the output from the project.
In spite of its now pumping out electrons just like any other operating wind farm today, Fire Island has not been your typical modern U.S. wind project characterized by incremental progress and the efficiencies that come with a maturing industry. Development has been years in the making, and many unique twists and turns have come along the way. It has been several years, in fact, even since CIRI brought Summit on board, which joined at a point when the decades-old dream of wind energy reducing Anchorage’s dependence on natural gas-fired power was growing dim.
Originally the brainchild of Steve Gilbert, who was with Chugach Electric at the time, the project was first discussed back in the late 1990s (with several sites being considered), and met towers were place on the Fire Island site in the early 2000s. Chugach was dependent on Cook Inlet natural gas for 90 percent of its power generation, and so they realized the need to diversify. They started to examine wind as an option and surveyed south-central Alaska. They produced a list of potential wind sites and ranked them based on room for expansion, wind resource and transmission. Fire Island was at the top of the list.
CIRI owned a largely unused 4,000-acre parcel, part of the Alaska Native Claims Settlement Act (ANCSA) settlement. Chugach asked if CIRI was interested in developing a wind project on the island, and with wind-resource data available, in 2005 CIRI expressed an interest in developing the site.
But as project development continued, several issues arose that needed to be worked through, including the close proximity of federal radar facilities. In addition, the project met several barriers along the way, among them the extremely low cost of natural gas in the area versus the high cost of doing a project in the non-contiguous United States. Local utilities, meanwhile, were unfamiliar with the model of buying power from independent power producers (IPPs). Today, the Fire Island wind farm is Alaska’s first major power project owned by an IPP.
At one point in the project’s history, the facility and wind power development as a whole appeared to be dead in Alaska, and so Gilbert left the state for (literally) greener pastures in Iowa, which today is one of the industry’s leading states.
The project, of course, was resuscitated eventually, but breaking ground certainly did not mark the end of the challenges. Beyond the need to overcome the high cost that comes with any form of construction in Alaska, the process of building the facility amounts to a fascinating and unique story in logistics. Not only is there no bridge linking Fire Island to the mainland, but it also has no port. Complicating matters even more: the island experiences 32-foot tides every day. As a result, bringing in equipment involved beach landings that had to be executed at specific times—and before the tide came in.
“Congratulations to CIRI, Chugach and their project partners in bringing this two-decade-in-the-making project to fruition,” said Larry Flowers, AWEA Deputy Director of Distributed and Community Wind. “Through vision, determination and hard work, CIRI and its project partners have addressed the many institutional, financial, technical and logistical challenges of being the first utility-scale wind project on Alaska’s rail belt. While Alaska Village Electric Cooperative, TDX Power, Kodiak Electric and Kotzebue Electric have led the way in village wind-diesel system implementation, this grid-tied wind project will lead the way to many more wind megawatts on the five-utility rail belt grid—an important step forward for Alaska renewables.”
Interview with Jim Jager, CIRI’s director of corporate communications
Q: Can you provide us with some background information on CIRI?
CIRI is one of 13 Alaska Native Regional Corporations, formed by the U.S. Congress in 1971 via the Alaska Native Claims Settlement Act (ANCSA), which settled land and financial claims for lands and resources lost by Alaska Natives. The ANCSA bill divided the state into 12 regions along cultural lines and created 200 village corporations. The settlers became shareholders in the corporation. In CIRI's case, it includes people who lived in or had cultural ties to the Cook Island region. In 2011, our net income was almost $30 million. We have 75 employees.
Q: Why did you invest in a wind project?
CIRI is a diversified company with many energy investments. And although this is the first wind project we’ve developed, we have substantial wind holdings in the lower 48. Wind investments are a key growth area for us. We joined with Edison Mission Energy and TIAA-CREF to form Capistrano Wind Partners LLC for the purpose of investing in wind energy. Edison Mission is a developer; after they develop a project and it’s online, they sell a big chunk to other partners like CIRI. They share the ownership and operation, and then they reinvest this profit into other projects.
We had a solid income stream, but it tended to be "lumpy." For example, we owned a resort. We sold it and received a big chunk of income. Our investments were characterized by years of huge income followed by years of slow profits. We wanted to make our income stream more predictable for our shareholders. After the economic crash of 2008, we repositioned our investment portfolio. We thought, "What would be good businesses to invest in?" We think sustainable energy offers long-term, stable growth potential.
Q: What did this project cost?
Roughly $65 million just for on-island structures, including the 11 turbines, roads, and transmission. But Fire Island is a lot more than a financial investment for CIRI. Diversifying the local power system is good for our region, and it benefits our business and local shareholders. It’s pointing the way to how our future developments will work. This project is transformational. It's the largest privately funded power development in Alaska. It opens up a new business model for power producers, and it's likely to be a new model for Alaska power generation.
Q: How did you pay for the project?
• $19 million from the U.S. Treasury 1603 payment (in lieu of the PTC/ITC)
• $46 million from CIRI, some in cash and some in loans from international lending group
• $25 million grant from Alaska; belongs to Chugach power line.
Q: Are you using CIRI employees and businesses?
We contracted with the Summit Power Group, which helped with development. Upwind Solutions manages the project. But many of the key personnel are CIRI employees. We've developed in-house expertise, and now that we have the capability, we can do deals like Capistrano. One contractor that did submarine cable work is now a CIRI subsidiary; we bought the company.
Q: What are the economic development impacts of this project?
The short-term impact is 80 to 100 construction workers employed on the island over the summer, plus workers involved in the submarine cable installation. In the long term, the project will employ eight or nine people full time to operate and maintain the system. This is a new industry in the area, and I fully anticipate there will be more wind generation installed along the Railbelt. We have plenty of wind resources along the highway system; we just need to say, 'OK, we’re going to develop it."
Q: What are the plans for expansion to its full capacity?
We need to have customers. If they will buy the additional power, we’ll build it for them. We’re moving forward to find buyers for the next 22 turbines. At $97 per megawatt-hour, it's higher than the average cost of power today. But most existing gas contracts are based on considerably lower prices, and as contracts start running out within the next 2 years, the new prices are considerably higher. Also, required infrastructure improvements and the rising cost of using storage facilities will result in a higher average cost of power in the next few years. A rational utility will try to offset expensive power.
Q: Any avian issues?
There are a few eagles on island. We worked closely with the Fish and Wildlife Service and will perform a follow-up avian impacts study, but we're not anticipating any impacts. Any viewshed issues? When the little red lights on the turbines started blinking, a few people mentioned them. But there have been no significant complaints. When you take off from the Anchorage airport, you can see Fire Island and the turbines. I think that local pride far outweighs any offense of visual impacts.
Wind integration on Alaska’s Railbelt; Alaska Energy Authority perspective
According to Rich Stromberg, program manager for wind and solar at the Alaska Energy Authority (AEA), his organization is encouraged to now have a sizeable amount of wind energy production on Alaska’s south-central Railbelt electrical grid. The Fire Island wind farm will allow for validation and adjustment of models previously used when evaluating and designing distributed energy systems in this region of Alaska. Further, system operators and planners at Chugach Electric Association will now be able to come up the learning curve on how best to integrate this variable power source with the existing portfolio of natural gas and hydroelectric generation systems. The Alaska Railbelt grid is facing a dynamic period over the next decade. Many options for expanding power generation and transmission are currently being evaluated, and this new learning will provide for the best possible solutions.
In addition to the Fire Island project, Golden Valley Electric Association (GVEA) is commissioning a 24.6-MW wind farm on the northern Railbelt grid, which previously had only 1 MW of wind power from the Delta Junction wind farm. GVEA, as the owner and operator of the Eva Creek wind farm, will be coming up a learning curve, similar to CIRI's efforts. Both projects offer the opportunity to study any balancing effects that may exist between the northern and south-central portions of the Railbelt system. Both projects are key in determining how much wind energy can be integrated into the Railbelt grid in the future.
Allen Farm - Chilmark, MA
Photo Courtesy of Vineyard Gazette/Ivy Ashe
In November 2011, Clarissa Allen and Mitchell Posin, owners of Allen Farm in Chilmark, Massachusetts, became the proud owners of the tallest wind turbine on Martha’s Vineyard, an Endurance E3120 on a 120-foot tower. The 50-kW turbine was commissioned on Thanksgiving Day.
The installation was also memorable for Gary Harcourt, co-owner and manager of Great Rock Windpower, who installed the turbine with his team. The turbine at the Allen Farm was the 50th wind turbine the Great Rock team has installed and the twelfth turbine on the Vineyard. According to Harcourt, the Allen Farm turbine is the “crown jewel” for him. It’s located on a beautiful rolling hill, with gorgeous ocean views, on the sheep farm that has been in Allen’s family for 300 years.
Harcourt, a cabinetmaker for 25 years, became involved in the small wind business back in 2007, installing Endurance wind turbines on Martha’s Vineyard. The Great Rock team installs other turbines beside the Endurance; his 12 installations on the island encompass two 50-kW machines, eight 5-kWs, one 6-kW and one 2 1/2 kW.
“The offshore controversy adds another layer of antiwind sentiment,” Harcourt said. “Every turbine we put up is pretty much a battle.”
Harcourt first spoke to Allen and Posin in 2007 about installing their turbine. The Chilmark zoning board of appeals upheld a building permit for the Allen Farm turbine in January 2011. It was issued under a Massachusetts agricultural exemption that allows working farms to bypass the normal permitting process.
“According to Massachusetts state law, a farm cannot be unduly hampered with zoning bylaws,” Harcourt said. “So for the most part, anyone can build anything they want on a farm as long as it relates to farming. The anti-winders put up a fight and contested the permit at a big hearing. Eventually we were successful because of the statute.”
Another glitch in the permitting process resulted when it was realized that the turbine produces more electricity than the farm uses. Massachusetts has shared net metering, so to secure approval of the building permit, the Allens had to be able to use 51 percent of the electricity generated on their farm. They sell the remaining 49 percent to the local Home Port restaurant in Menemsha. The Allens use their electricity to power the farm outbuildings, including their lambing operation, and the aerators that Posin uses for his compost tea business.
Allen and Posin financed the project through Martha’s Vineyard Savings Bank. They also received a $100,000 grant from the Massachusetts Clean Energy Center, the maximum grant for a small turbine based on predicted energy. The Clean Energy Center also funded the met tower.
In December 2011, NSTAR Electric & Gas Corporation approved the interconnection, and the turbine began producing energy. Harcourt said that he predicted lower performance than the actual. Favorable siting is one reason the turbine exceeds the production expectations: it is sited on a hill with great access to winds from all directions, and there are few trees and buildings in the immediate area. According to Harcourt, an anti-wind group petitioned the town to pay for a third-party study of how much energy the turbine would produce and how much energy the farm would use to determine whether the Allens would use the required 51 percent. Harcourt was able to use the study, which predicted higher performance than he did, when the local banker called him for project information while processing the loan application for the turbine. Allen and Posin are thrilled with their turbine.