A New Spin on agriculture: Wind turbines provide energy optionsWritten by Saige Albert
Ron Terrazas is passionate about working with producers in the agriculture industry to improve efficiencies on farms and ranches across the U.S., and his efforts have been working to improve access to energy.
“This is a pioneering effort in agriculture,” Terrazas says of his work with wind energy. “Distributed generation of power makes sense for many producers.”
Terrazas explains that distributed generation produces power outside of a central power plant.
“Rather than having giant power plants or wind farms that generate energy and put it into long distance transmission lines, a lot of people would rather produce their own power locally,” he says.
Transmission lines are expensive and result in a seven to eight percent loss of power. Power generated remotely and passed through transmission lines is also subject to outages and failure.
Solar is the most common form of distributed power generation, Terrazas says, “Until our product, small wind just wasn’t efficient.”
Terrazas is the co-founder of Prudencia Power, the sales and financing partner of Change Wind Corporation. Change Wind is an American manufacturer of vertical axis wind turbines, rather than traditional horizontal turbines.
Benefits of vertical
Change Wind’s turbines cost around $60,000 and are approximately as tall as a telephone pole.
The turbines, crafted in small machine shops on the East Coast, are quiet and produce electricity at low wind velocity. They are delivered via truck or rail, can be installed within a few days and only require a small, concrete pad.
“After ranchers buy and install the turbines, they can get a tax credit,” Terrazas says. “These turbines also generate power more cheaply than using solar arrays.”
While vertical axis wind turbines have been around for nearly 80 years, he says they have largely failed because of the stack weight – or the weight of the turbine.
“They were heavy, and they weren’t efficient,” he explains. “The people who started Change Wind came from the automobile manufacturing industry. They applied techniques used in race cars to wind turbines.”
For example, magnetic levitation technology enables turbines to spin with reduced friction. A breeze of only five miles per hour causes Change Wind turbines to spin.
Change Wind turbines utilize turbulent air, rather than laminar wind flow.
“Laminar wind is only available at high altitude, so wind turbines like the giant ones we see in Wyoming have to be tall where the wind blows steadily,” Terrazas says. “Turbulent air is available at the surface.”
Creating wind power
In areas with good wind, Terrazas explains that a turbine can power a farm or ranch and limit payments to a utility company.
“The maximum theoretical power generation is 300,000 kilowatt-hours of energy per year,” he says. “With an average wind speed of eight miles per hour, we can get 100,000 kilowatt-hours per year generated from these wind turbines.”
The average American household utilizes about 1,000 kilowatt-hours per month, meaning a turbine could power 10 houses per year with an average wind speed of eight miles per hour.
“There is potential to cut power costs in a big way,” Terrazas says.
He also notes that even if ranchers don’t go completely off the grid, wind power provides an opportunity to reduce electricity bills.
“Once we reach a certain amount of energy consumption, the electricity bill goes way up,” he adds. “This might provide a way to supplement energy needs.”
“Power output increases with the cube of the wind velocity,” Terrazas says. “It doesn’t take much more wind speed to create a whole lot of power.”
At the same time, the turbines also come equipped with a braking system to preserve the life of the turbine. Wind speeds higher than 12 miles per hour influence the system to begin braking.
Another common concern is the intermittency of the wind, Terrazas adds.
“The wind doesn’t blow all the time,” he comments, noting that they estimate that power can be produced one-third of the time. “The power can be stored if ranchers invest in a battery, or if they want to plug into the grid, that is an option, too.”
Terrazas explains that vertical axis wind is relatively new to agriculture, but he sees a lot of potential for the future.
“Up until now, most of our sales have been directed toward the military, but we know there is a huge demand,” he says. “We also know that wind power has been inefficient. We know ranchers need power, and we think this can help supply ranchers.”
As a Wyoming-based company, Terrazas says the remote nature of the ag industry in the state provides the perfect opportunity to expand power supply in the state.
“This can provide ranchers with a way to supply power to places they might not have been able to supply before or to areas where it was expensive to ship power to,” Terrazas adds. “There is a lot of potential for the ag industry.”
Wind development strives for minimal impactWritten by Natasha Wheeler
Rawlins – Soon, 1,000 new wind turbines may soon be standing in Carbon County as part of the Chokecherry and Sierra Madre Wind Energy Project, currently underway with the Power Company of Wyoming, LLC (PCW).
“The setting for this project is on some of the highest wind resource land in the country,” remarks Ryan Jacobson, the director of engineering and construction at PCW.
Located on the Oregon Trail Cattle Company Ranch south of Rawlins, PCW is developing the wind farm as well as the TransWest Express (TWE) transmission line that will carry the wind energy to a hub south of Las Vegas, Nev.
“We’ll use DC technology, capable of transporting about 3,000 megawatts. It’s a 730-mile transmission line with two-thirds running through federal land,” Jacobson notes.
PCW’s wind farm project has been divided into two phases, each with 500 turbines after full construction. Building will begin on the west side of the site and move east.
“We are also constructing a rail facility that will bring in the wind turbines and most of our equipment,” he adds.
Because equipment will be brought in by rail and offloaded on the Oregon Trail Cattle Company Ranch property, heavy traffic on highways and other public roads will be minimized.
“We are also planning on having a rock quarry on the north end of the site to provide material for the project,” Jacobson continues.
Bureau of Land Management (BLM) permitting began in 2008 and is now nearing completion.
“It’s a seven-year process that we are hoping to complete this year. Between BLM and the Western Area Power Administration, the final environmental impact statement (EIS) has just been released, and we are hoping to wrap up that process with BLM by the end of this year,” comments Jacobson.
The first step in permitting the wind farm was evaluating the impacts of putting 1,000 turbines on the ranch. That led to a Record of Decision, signed by the Secretary of Energy in 2012.
“The Record of Decision defined the project but didn’t give us any authority to move forward. Since then, we have been developing site-specific, detailed plans to define how we are going to construct the project,” Jacobson explains.
Plans, which are submitted to the BLM for review, describe elements such as the footprint of the project and what equipment will be used for construction.
“We have completed that step for our haul road, our rail facility and our quarry. We have submitted all of our information for the first 500 turbines, and we anticipate that step being completed within the next year,” he says.
PCW has also been working with the U.S. Fish and Wildlife Service (FWS) to minimize impacts on eagle populations near the site.
“We are going through a separate process with FWS with regards to bald and golden eagles,” he notes. “That process is ongoing, and we anticipate it to be completed for the first phase of the project by the end of 2015.”
Developers have also done wildlife monitoring, nest surveys, sage grouse tracking and tracking of other bird species using avian radar.
“We have already begun comprehensive conservation measures on the site to limit the impact the project is going to have on wildlife,” Jacobson explains.
The team has also done extensive measurement and planning for vegetation levels and documented erosion potential throughout the project site to keep construction away from high-erosion areas.
“We have looked at everything from weed management to erosion control, watershed monitoring, environmental compliance, decommissioning plans and decommissioning bonding between the BLM process and the state process,” Jacobson states.
Extensive planning has been done to design a wind project that nets the highest possible production while best utilizing the land.
“There are techniques we have used to minimize miles of roads and disturbance. We have also applied setbacks set by the BLM and the state and local governments so we can avoid impact to watersheds, wildlife, neighboring properties and public rights of way,” Jacobson continues.
Less than 2,000 acres should be disturbed over the total 320,000 acres that make up the Oregon Trail Cattle Company Ranch. The rest of the property will continue to be used for agricultural purposes as it is today.
Once all of the permits are finalized, construction is expected to begin in 2016. The rail facility and road infrastructure will be built first.
“We won’t see any turbines until 2019. Part of the reason for that is there is no sense in standing the turbines up if there is nowhere for the power to go,” explains Jacobson.
Start to finish, the total construction timeline for the Chokecherry and Sierra Madre Wind Energy Project is estimated to be eight years.
“As far as the longevity of the equipment, 25 to 30 years is the expectation,” Jacobson adds.
Most wind farms break even financially at around 10 years of operation, and Jacobson is confident that this particular project may become profitable even sooner than that.
When the wind farm becomes obsolete, he comments, “We have an obligation to BLM and to the state to take it down completely and reclaim the site.”
Ryan Jacobson spoke on May 15 at the 2015 Agricultural Bankers Conference in Rawlins.
Committee reviews Wyoming wind energy issues
At the 2011 Wyoming Stock Growers Association (WSGA) Summer Convention held in Laramie this year, various committees met to discuss the topics that affect Wyoming agriculturalists the most.
In the Private and State Lands Committee, discussion included new policy and the opinions of landowners in Niobrara County, but the emphasis of the committee and the most time-consuming issue was wind energy development in Wyoming and landowners’ rights.
Wyoming Representative Kermit Brown explained many different aspects of the wind energy industry, including two bills he sponsored in the State Legislature for further development of the industry.
“Our committee was so divided and we could never really decide on a consensus, so eventually we produced a recommendation at a five to four vote, which is nothing resoundingly sturdy,” said Brown. “Because of this, I sponsored two bills in the Legislature just so all members of the State Legislature would be able to discuss what we’d reviewed in our committee.”
While the wind energy industry has boomed across the state as the next big energy source, a primary concern shared by many landowners is eminent domain, which can leave them feeling trapped in agreements.
“The first bill repealed the right of eminent domain for certain systems,” said Brown of his legislation. “It just wouldn’t exist. That way the landowners who would have to host various transport systems would have more flexibility with which to bargain and negotiate with the various companies.”
Brown’s initial bill gave landowners a freedom and renewed sense of comfort when dealing with big name companies. However, because the energy companies contribute to the state’s economy through taxes, Brown’s second bill helped give them some leeway.
“The second bill relates to situations when developers have projects and can make a fair trade. As long as the developers have 85 percent of their projects provided for between monetary means and previous land contracts, they then have an opportunity to present before a court of law their pleas to obtain the last 15 percent of the project through eminent domain,” explained Brown. “This bill was negotiable as far as the figures go, but the fundamental idea is that the developers had to do at least 85 percent of the work without the threat of eminent domain affecting or swaying the landowner’s decisions.”
Brown said the importance of successful partnerships between landowners and developers cannot be stressed enough.
“For the wind energy industry to be successful, the landowners have to be happy with the developers just as much as the developers need to be understood and cooperative,” he said.
“We want this to go back to bargains that can take place at the kitchen table. We want landowners and developers to find a meeting point where both parties can barter and are content with the outcome of the deal. Most importantly, they can do this without our outside interference,” he added.
Energy milestone: Wind project moves forwardWritten by Saige Albert
“Tapping the vast renewable energy resources on our nation’s public lands will create jobs while supporting a clean energy future,” said Salazar. “Wyoming has some of the best wind energy resources in the world, and there’s no doubt that this project has the potential to be a landmark example for the nation.”
Power Company of Wyoming, LLC (PCW) began looking at developing a wind energy project in two different areas in Carbon County on the Overland Trail Ranch, which is owned and operated by The Overland Trail Cattle Company LLC.
“PCW is looking to develop a wind project to capture the very best wind resources,” explains Power Company of Wyoming, LLC Director of Communications Kara Choquette. “The National Renewable Energy Lab (NREL) has ranked winds across the ranch at class six to seven.”
NREL is an organization dedicated to advancing renewable energy, and they rate the wind across the country on a scale from one to seven, with class seven representing the best winds.
“The process started in 2006,” she adds, “and it started by getting permits. The land is checkerboard land that is managed through leases and allotments, so we filed wind testing and monitoring applications to verify that it would be a great place to put a wind farm.”
On confirming the quality of the location, Choquette adds that the company filed a right of way application for wind energy development in 2008, and since then, BLM has been conducting environmental assessments on the potential impacts.
“All of the environmental assessment, knowledge, research and understanding culminates in the record of decision,” she says. “It is a significant milestone that says we can put a wind energy project on the land.”
On Oct. 9, Salazar visited Laramie County Community College in Cheyenne to sign the record of decision for the project.
“It is exciting that Secretary Salazar came to Wyoming to sign the record of decision,” comments Choquette. “Still, there are more environmental assessments that will continue as we look at siting the particular wind turbines.”
Each analysis conducted will tie to the overall record of decision, and Choquette mentions that the environmental impact statement process is comprehensive.
“It has been over 4.5 years, and there is further analysis that will be conducted,” she says. “The next big thing that we are pursuing is a permit from the state of Wyoming.”
While Carbon County Commissioners approved a conditional use permit for the project, an additional permit is required from the Wyoming Department of Environmental Quality Industrial Siting Division. PCW plans to apply for the permit later this year.
“After we have the permitting and final engineering, the first stage of construction could begin as soon as next year,” Choquette explains. “That would involve building the internal road and support facilities.”
Because Overland Trail Ranch aligns with the Union Pacific Railroad line, PCW will be delivering the major components of the turbines to the ranch via rail and utilizing roads internal to the ranch for delivery to sites.
“We will minimize the use of county roads and local traffic hassle because everything will be delivered to the site and trucked internally,” she says, noting that the strategy will reduce impacts.
The scope of the project will bring a number of positive benefits to Carbon County, as well as the state of Wyoming.
“The construction schedule is five seasons long,” explains Choquette. “The project is going to be a big employer. We are looking at 114 full time positions for the operation and maintenance phase.”
For the jobs, she adds that Laramie County Community College’s wind turbine technician training program, as well as Carbon County’s higher education training programs will help local people to secure the jobs.
“We are looking at working to train local people for the jobs,” she says. “PCW will be the third largest private employer in the county, in terms of bringing good jobs in that will also bring people back to the county.”
Additional benefits will also be present in the form of property taxes, and Choquette mentions that wind energy is taxed in three ways.
“Property taxes will be a huge and dependable tax base that the county will be able to count on for years to come,” she says.
A BLM press release states that the complex could generate between $291 and $437 million in annual property taxes to Carbon County over 20 years.
PCW estimates that this project will contribute $232 million in sales and use taxes to Carbon County; and an estimated $149 million to the state of Wyoming and to Carbon County over 20 years for electricity generation tax.
At the same time the project is being completed and wind energy is harnessed, Choquette mentions that Overland Trail Cattle Company will continue to operate.
“It is a working cattle operation and will continue to be so,” comments Choquette. “Wind energy is very compatible with agriculture and ranching, and the operation will continue without change.”
Choquette mentions, “This is a great location with great wind.”
“There’s no doubt that this project has the potential to be a landmark project for the U.S. and the entire world,” adds Salazar.
Chokecherry and Sierra Madre Wind Energy Project
The proposed Chokecherry and Sierra Madre project consists of two sites encompassing up to 1,000 wind turbines on approximately 219,707 acres of land. The project will generate approximately 2,500 megawatts, according to the Power Company of Wyoming website.
Power Company of Wyoming adds, “The project’s long-term surface disturbance will be less than 2,000 acres of a 320,000-acre ranch owned and operated by an affiliate company. With the potential to generate approximately 2,500 megawatts of clean energy, the project will ensure a reliable, cost-effective supply of renewable electricity that’s unmatched in the West.”
Pathfinder Wind proposes nameplate capacity taxWritten by Christy Martinez
As the Wyoming legislature looks at a new tax structure for wind in the 2011 General Session, Pathfinder Renewable Wind Energy, LLC has proposed a strategy to the Wind Revenue Tax Committee and members of the legislature that they think will work for the state, counties and the wind energy industry.
During the 2010 legislative session the Wyoming legislature passed a wind generation tax of a dollar per megawatt hour of wind produced, holding at a steady rate, and a property tax is also on the books, which declines over the years like any other property tax.
For the 2011 session, Mark Doelger of Pathfinder Wind says there have been a number of considerations and proposals made, and there’s at least one bill currently being drafted.
“The revenue committee had taken this up as an interim topic, and they considered at least three bills that I’m aware of,” says Doelger. “None passed out of committee in their final meeting in December. Now any bill would have to be sponsored by individuals or a groups of legislators.”
Of the 2010 legislation, Doelger says, “In 2010 the Governor urged the legislature to come up with a generation tax, and what they passed with the Governor’s support was a one dollar per megawatt hour tax, and that’s what’s currently in place. That was really done as a placeholder – to have something on the books for this year’s legislature to take up with a more serious and in depth discussion.”
Pathfinder’s Wyoming Tax Impact Study was commissioned to identify what is needed to reach tax level parity with competing Western states, and to identify tax alternatives for Wyoming that allow it to attract wind development while maximizing long-term job and economic growth. It introduces the concepts of nameplate capacity taxes, which they say provide a greater level of revenue certainty, and community impact fees, which would deliver revenues up front when infrastructure spending is needed.
“What we’ve suggested is that a county receiving revenue from property taxes would rather have a nameplate capacity tax, which means it would be an increasing revenue line over the period of the project, as opposed to the decreasing revenue line of a property tax,” says Pathfinder Wind managing partner Jeff Meyer of the proposed megawatt nameplate capacity tax, as opposed to sales taxes, generation taxes and property taxes.
“At Pathfinder our goal would be to provide a steady and increasing revenue stream over the long term life of a project, which would be similar to a generation tax but based on the nameplate capacity,” notes Doelger. “In other words, Pathfinder and its co-developers, with a 3,000-megawatt wind farm, would be taxed on that 3,000 megawatts regardless of what they generate.”
“The idea would be to have a nameplate capacity tax that’s certain, and not based on generation or depreciation. It would be a certain amount the county would receive over the lifetime of the project, which would go up perhaps every five years,” explains Meyer of the ascending curve. “For a county to grow and to be able to plan over the long term, we think there are many positives with an ever-increasing tax base, as opposed to an ever-decreasing tax base.”
In addition, Doelger says a generation tax is more difficult from an accounting perspective because it’s based on actual generation and production, not nameplate capacity.
Of the concern from some counties that they wouldn’t receive property taxes with the nameplate capacity tax, Meyer says, “That’s not true. Our plan would call for the state to allocate property taxes back to the counties in the same way they currently allocate them.”
Meyer says the other important point in the proposed structure is the nameplate capacity megawatt impact tax.
“There are impacts to counties that will take place several years before generation happens, so we’ve included the nameplate capacity megawatt impact tax in our model, where the county receives money prior to the operation of the wind farm to pay for impacts during the construction period,” he explains.
“We’d expect to settle up with the county where we’re located – for Pathfinder that’s Platte County – to provide the funds they need for mitigation of impacts related to a lot of workers coming in, and the infrastructure needed to support the project and those workers,” adds Doelger.
“What we’ve tried to do is help the state understand what we think is a fair amount of taxation that can be extracted from wind that would also be beneficial to the state and support the growth of wind,” says Meyer. “We realize that if we don’t contribute our fair share to the state, our industry will not grow. Since we have all the numbers from our project in southeast Wyoming, we’ve suggested an alternative to sales, generation and property taxes. If we all can’t grow together, we won’t to grow at all.”
“What we need to avoid is heavy taxation up front, because developers can’t get the financing for a project if they get the big spike in tax right up front with a sales tax,” says Doelger. “We would support dropping a sales tax and replacing the property tax with the generation tax, or preferably a nameplate capacity tax. That’s good for a county and the state because that ensures a revenue stream.”
Doelger says a tax structure friendly to wind developers is crucial to development in Wyoming.
“Wind projects have a very narrow margin,” he says. “The Pathfinder wind farm itself is a $7 billion or so project, and the transmission that has to be built is another $3 billion. These are huge costs, and a huge project, and it runs on a very narrow margin, so that’s where the concern comes in. To have burdensome taxes, particularly those that might be up front like a sales tax, would seriously impact or even cause a project to be canceled. We’re just trying to find a way for everybody to come out of this ok and get what they need so at the end of the day we’ve all survived.”
“We’ve suggested what we think is a fair way to tax wind,” says Meyer.