Is Business Model for
Two Wind Farms in Iowa
By Apollo News Service
4/21/2009 - The farmland of Iowa’s Emmet and Dickinson counties will soon be home to the nation’s two largest community-owned wind farms. Red Rock Wind Energy LLC and Emmet County Energy LLC, both based in Estherville, Iowa, announced in December their intent build 300 and 200-megawatt wind arrays respectively near Estherville, a northwest Iowa agricultural community of 6,000 residents east of Sioux Falls near the border with Minnesota.
Both projects are much larger than Minnesota’s 100-megawatt Trimont array, currently the country’s largest community-owned wind farm.
Community-Owned Business Model
According to Erin Edholm of National Wind LLC, the company managing the two Estherville projects, the community-owned model offers landowners “a return much greater than anything they would receive on a lease only basis.” In addition to a lease payment, property owners are given the option to own a share in the company’s profit. “The landowners have rights, they have a voice in the project,” said Edholm. They also have the option of selling their share up front. But National Wind, which manages 10 other wind projects in the Midwest, has found that about 85 percent of property owners prefer the long-term profit sharing option.
The American Wind Energy Association, the industry’s Washington-based trade group, predicts that as incentives for wind energy increase the United States is likely to see a proliferation of innovative business models in wind projects. Communities that host wind projects are also likely to see an increase in jobs.
Iowa A Wind Energy Power
That is especially true in Iowa, which last year surpassed California to become the nation’s second largest generator of wind power behind Texas, according to the American Wind Energy Association. Iowa generates 15 percent of its power with wind, up from five percent in 2006, according to the Iowa Utilities Board, a state agency. And the Iowa Department of Economic Development said in March that 1,400 Iowans are employed by the nine companies in the state that now manufacture wind turbines and components.
Large scale projects like Red Rock create many jobs during installation as well as long-term jobs in operations, monitoring, and maintenance. Wind Powering America, a promotion and development program sponsored by the federal Department of Energy, projects that installation of 500 megawatts of wind power could create as many as 800 jobs in construction and 125 more in operations and maintenance. Those numbers do not include the indirect jobs created by manufacturing, the supply chain, and the subsequent infusion of wealth into the local economy.
Good Jobs and Lots of Them
National Wind, based in Minneapolis and the major investor in community-owned Red Rock Wind Energy, is bidding to become a big wind energy player in the plains states. It is developing 11 other large community-owned wind projects in Minnesota, Iowa, the Dakotas, and Colorado that will product 3,658 megawatts of electricity, or roughly the same amount of power generated by four large coal or nuclear power plants. Ben Kerl, a senior wind developer at National Wind, said a large percentage of the jobs to build and manage the projects will be high-quality union jobs. “Many of the general contractors we consider are union shops” Kerl added.
Estherville officials said they welcomed the projects and the community is getting prepared for such a large number of new jobs. Locally-based Iowa Lakes Community College is ramping up its two-year Wind Energy and Turbine Technology training program to meet the projected demand. According to Bob Schacherer, an executive of Red Rock Wind Energy LLC, they are “all but certain” to fill many of the new operations and maintenance positions with graduates of the local program.
Within five years, according to company officials, the stiff breezes of Emmet and Dickenson counties will poweri as many as 120,000 homes while creating economic opportunity, job security, and a clean energy future for rural Iowans.
[Mac Lynch is the Apollo’s Alliance’s program associate in the San Francisco office. Reach him at Mac (at) apolloalliance.org.]
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