Transforming Clean-Energy Industry Into a Local One
Minnesota Turbines At Forefront of A New Movement: Community Power
By Peter Slevin
Washington Post Staff Writer
Tuesday, October 13, 2009
WILLMAR, Minn. -- From his desk at the local electricity cooperative, Bruce Gomm can see the looming black smokestacks of the city's aging coal-fired power plant. He can also see, on his office wall, framed photographs of sleek new wind turbines. Together, they are a changing world foretold.
Gomm is placing a major bet on wind to produce the electrons that will power his customers' lights and run their dishwashers. He is at the forefront of a movement called community power, the idea that neighborhoods and towns can install their own renewable power sources and rely less on electricity that flows from distant realms.
As costs of solar and wind come down, the concept's popularity is looking up, though challenges remain for an industry in its infancy.
Willmar Municipal Utilities invested nearly $10 million in a pair of 256-foot towers to capture the prairie wind here, about 100 miles west of Minneapolis. Gomm calculates that the wind power will cost less than the equivalent in coal-powered energy and, when the debt has been paid in 12 years or so, the electricity will come virtually free for as long as the turbines are standing.
Along the way, Willmar will have reduced carbon emissions and made progress toward reaching a state requirement that Minnesota generate 25 percent of its power from renewable sources by 2025. Gomm, who estimates the turbines will produce 3 to 5 percent of the town's energy, aims to build more.
"This is the biggest investment Willmar Municipal Utilities has ever made," engineer Wes Hompe said, standing beneath a huge new turbine outside town. "What makes it worthwhile? This is the future."
Although most analysts consider it unlikely that neighborhoods or towns will one day exist entirely off the grid, believers in small-scale power see a growing role for local renewables, ranging from individual windmills and solar panels atop homes and big-box stores to larger clusters of turbines and panels wherever they will fit. In Rock Port, Mo., spinning turbines already are producing more than 100 percent of the town's annual energy requirements.
While Rock Port, and the state of Minnesota, are focused on wind, other states and communities are emphasizing solar. The technology is more compact and less obtrusive, especially in urban and suburban areas. California is spending millions on a "Million Solar Roofs" project to help property owners install solar arrays, while Gainesville, Fla., and several states are experimenting with special tariffs and incentives to promote solar.
Federal authorities are investing billions through grants and tax breaks to promote alternative power. President Obama predicted this year that renewable fuel capacity will double in "the next few years."
Amory B. Lovins, a Colorado-based renewable power advocate, refers to the transformation of the energy industry as "reinventing fire" and contends the wind, solar and hydropower industries have gone from alternative to mainstream. He cites figures from London-based New Energy Finance to estimate that they represent "probably half of all new electricity. Renewables are getting less expensive, often rather dramatically."
Within the renewables world, Lovins suspects economics will increasingly favor small and medium-sized projects in place of vast wind and solar farms located on remote mountain ridges or desert floors far from population centers. Transmission is costly and, as utilities across the country have learned, the routing of new power lines often generates opposition and lawsuits.
David W. Mohler, a Duke Energy strategist, sees both the promise and limits of community power. He predicts local energy sources, sometimes called distributed generation, will be a "small but meaningful part" of the nation's energy portfolio. His North Carolina home is equipped with solar panels and a storage battery, he said, but "it's really tough to think about thousands and thousands of megawatts. It's like thinking about using AAA batteries for your car."
As it has grown, the renewables industry also has benefited from state rules requiring utilities to draw more power from such sources. But the challenges have also multiplied. The increased quantities of electricity from alternative fuels are competing for transmission space, while utilities and distributors are sometimes reluctant to disturb their existing networks of suppliers.
On another front, utilities must account for customers who generate more wind and solar power than they use and want to sell the extra to the power company, an arrangement called net metering. The result, as Mohler put it, is "that we'll have some business model issues to address."
Traditional energy companies, particularly coal producers and users, will see renewables as a threat to their profits and fight back, predicts Beth Soholt, director of Wind on the Wires, a St. Paul, Minn., advocacy group. She said the wind industry will need help changing the payment and transmission structure if it expects to compete, meaning that legislators and regulators must show they are "serious about the goals they have set."
"Now we're not just a gleam in somebody's eye," Soholt said. "We're real."
Thanks in part to state incentives, turbines have been sprouting in Minnesota locations where local investors or a government entity has cobbled together financing. The owners have sold much of the resulting electricity to utilities, notably Xcel Energy, the nation's No. 1 wind user, which purchases 1,200 megawatts in the state and expects to build its own wind farms.
Small-power advocates took heart from the first phase of a Minnesota Energy Department study, released last year, which concluded that 600 megawatts of power in small increments could be added to the grid with minimal need for new lines.
The second phase of the report, released in September, carried a caveat. It showed that the land close to existing lines had mostly been snapped up and that small projects, when grouped together, add stress to the grid. If the analysis is correct, renewables will not be able to continue to expand without transmission upgrades, raising complex questions about who will pay.
Transmission costs played a role in Willmar's decision not to import wind-fueled energy from the Dakotas or Buffalo Ridge, located in southwest Minnesota.
"The more local we are, the more confident we feel," Gomm said.
Looking ahead, the cooperative also conducted an experiment with the power plant outside Gomm's window, burning 100 tons of corncobs for several days in place of 60 tons of Montana-mined coal.
"We're trying to experiment," Gomm said. "Renewable energy is going to be more and more of the mix of our energy future."
One recent afternoon a few miles from Gomm's office, 20 utility executives, energy advocates and local citizens sat around a conference table at Kandiyohi Power Cooperative and discussed another experiment, one that would help 100 customers adopt solar or wind technology along with a menu of efficiency upgrades.
As the group discussed a dizzying array of government programs and technological options, members noted how quickly the field is shifting. They adjourned to study a Colorado city's experiences with solar investments and the latest incentives and regulations from Washington and St. Paul.
"It's not so much a train that's coming. It's here. We have to deal with it," said David J. George, Kandiyohi's chief executive. Preparing last winter for a community meeting called "Turbine Talk" in rural Minnesota, George expected 25 people to show up. The crowd neared 100.
As Lovins sees it, the long-term trends show a shift from traditional energy sources toward renewables -- the more local, the better.
Renewable fuels "will continue to take over the market because they have lower costs and lower financial risks than central thermal," predicted Lovins, chairman of the Rocky Mountain Institute, a Colorado think tank. "It's driven by economics and its driven by climate and security concerns. And all three are going in the same direction."
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