Wind Energy Glossary
Glossary Term | Definition |
|---|---|
| Independent System Operator (ISO) | An independent third party responsible for maintaining secure and economic operation of an open access transmission system on a regional basis. An ISO provides availability and transmission pricing services to all users of the transmission grid. |
| Installation Costs | All the expenses required to construct and get a turbine up and running including but not limited to foundation construction, laying of electrical wire, crane, labor, and other associated costs. |
| Interconnection | The process of connecting an electrical generator to the electrical power grid or the physical location of the connection of an electrical generator to the electrical power grid. |
| Interconnection Agreement | A legally binding document that defines the technical and contractual terms under which a generator can interconnect and deliver energy to a transmission operating utility’s system. |
| Internal Rate of Return (IRR) | A financial calculation that compares the present value of a project’s expected revenues with the present value of its expected costs. The IRR calculation is used to determine the discount rate at which the two values are equal. By doing this calculation, investors are able to see the project’s expected rate of return. |
| Investor-Owned Utility (IOU) | A utility owned by private investors as opposed to one owned by a public trust or agency; a commercial, for-profit utility as opposed to a co-op or municipal utility. |
| IRS Private Letter Rulings | A notice from the IRS that makes a ruling on how a particular portion of the tax code applies in a specific instance for an individual or business. Many community wind projects have asked the IRS for rulings on the ability of the project’s business structure to take advantage of the production tax credit (and other tax advantages) in a way that is within the law. |
| Kilowatt (kW) | The basic unit of electric demand, equal to 1,000 watts. |
| Kilowatt-hour (kWh) | A unit of energy equal to 1,000 watt-hours. The basic measure of electric energy generation or use. A 100-watt light bulb that is left on for 10 hours uses one kilowatt-hour. |
| Landowner Wind Energy Association | A landowner wind energy association, or LWEA, consists of a group of landowners who have decided to work together to have more control over the wind leasing process than they would have individually. |
| Limited Liability Company (LLC) | A type of business structure in which owners are not liable for things that go wrong that are not the owners' responsibility. This offers owners some legal protection in case of accidents and disasters. |
| Load | The amount of electric power drawn at a specific time from an electric system, or the total power drawn from the system. Peak load is the amount of power drawn at the time of highest electrical demand. Or a device or aggregation of devices that are connected to an electrical system that consume electrical power. |
| Maintenance Reserve Account | The reserve account of cash balances set aside to cover a project's maintenance and repair expenses. |
| Megawatt (MW) | Equal to 1,000 kilowatts or 1 million watts. |
| Megawatt-hour (MWh) | Equal to 1,000 kilowatt-hours or 1 million watt-hours. |
| Merchant | Refers to wind projects where a private contractor builds a new facility without a power purchase agreement and guaranteed revenue stream. In a deregulated power market a merchant wind projects sell their electricity at spot market prices. |
| Meteorological Tower ("Met Tower") | A tower used at a potential project site which has equipment attached to it which is designed to assess wind resource. Generally a met tower will have anemometers, wind direction vanes, temperature and pressure sensors, and other measurement devices attached to it at various levels above the ground. |
| Midwest Independent System Operator (MISO) | The independent system operator for the Midewest. http://www.midwestiso.org |
| Minnesota Flip | The Minnesota Flip is a business model designed to help local wind project owners with minimal tax appetite pair up with a larger entity that has a more substantial tax burden. |
| Modified Accelerated Cost-Recovery System (MACRS) | Businesses can recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to 50 years, over which the property may be depreciated. For solar, wind, and geothermal property placed in service after 1986, the current MACRS property class is five years. |
| Multiplier Effect | The term “multiplier effect” as it pertains to the local economy and wind project development describes how increased spending in one part of a economy starts a chain reaction that results in an overall increase in economic activity. |
| Municipal Utility ("Muni") | A utility owned by a city to supply utility services to residents in that city. Generally, surpluses in revenues or over-expenditures are contributed to the city budget. |
| Municipal Wind Power | Wind energy projects developed by small political subdivisions of cities and townships, rural electrification cooperatives, and other municipal or quasi-municipal entities or municipally owned corporations that provide electric transmission, distribution or generation services. |
| Nameplate Capacity | The maximum output rating of a wind generator. A wind turbine that has a 1 MW nameplate capacity will produce 1 MW of power when operating at it’s rated output. |
| Net Metering and Net Billing | The concept of net metering programs is to allow utility customers to generate their own electricity from renewable resources, such as small wind turbines and solar electric systems. The customers send excess electricity back to the utility when their wind system, for example, produces more power than they need. |