Welcome to the Community Wind Toolbox.
The Community Wind Handbook offers high-quality practical information for those interested in developing commercial-scale wind projects.
The core content of this Toolbox comes from The Community Wind Handbook, developed by Windustry on behalf of the Rural Minnesota Energy Board and published December 15, 2006 by a partnership of the Agriculture Utilization Research Institute, the Southwest Initiative Foundation, The Minnesota Project, Clean Energy Resource Teams, and the Minnesota Corn Research and Promotion Council.
Community Wind Toolbox Acknowledgements
Feb 09, 2015
The core content of the Community Wind Toolbox comes from The Community Wind Handbook, developed by Windustry on behalf of the Rural Minnesota Energy Board and published December 15, 2006 by a partnership of the Agriculture Utilization Research Institute, the Southwest Initiative Foundation, The Minnesota Project, Clean Energy Resource Teams, and the Minnesota Corn Research and Promotion Council. The Community Wind Handbook offers high-quality practical information for farmers and rural landowners looking to develop commercial-scale wind projects.
The content of The Community Wind Handbook has been integrated with related content and interactive tools to create the Community Wind Toolbox, a robust on-line resource for community wind development that will be kept up-to-date with the rapidly changing wind energy landscape.
Read Full Community Wind Toolbox Online
Jan 23, 2014
Read the full toolbox in a book reader here.
Chapter 1: Introduction
Jan 17, 2008
Wind energy development is expanding rapidly, creating many opportunities for communities to participate in wind development. Windy acreage, once cursed for losing top soil, is now seen as a potential goldmine. Wind energy offers many financial, environmental, and social benefits to the communities and individuals who choose to get involved with its development.
Chapter 2: Development Overview and Checklist
Jan 16, 2008
This section introduces the key players and their roles in community wind development. It gives an overview of the steps involved in the development process, and provides a checklist to help you organize your community wind development project. Here are the main topics covered:
- Key Players in the Wind Industry
- Community Wind Development Steps
- Wind Project Development Checklist
- Additional Resources for Developing Community Wind Energy
Chapter 3: Project Planning and Management
Jan 13, 2008
This section focuses on project management and planning, two elements that are essential to a successful 2-50 MW community wind project. Topics covered in this section include putting together a reliable project team and understanding risks and ways to mitigate them. The section also provides resources for creating a realistic project plan and timeline, as well as tips from experienced community wind developers.
Chapter 4: Wind Resource Assessment
Jan 10, 2008
Wind resource assessment is the most important step in planning a community wind project because it is the basis for determining initial feasibility and cash flow projections, and is ultimately vital for acquiring financing. Your project will progress through several stages of assessment:
- Initial Assessment
- Detailed site characterization
- Long-term validation of data
- Detailed cash flow projection and acquiring financing
Chapter 5: Siting Guidelines
Jan 05, 2008
As with any large energy facility, community wind projects raise a wide variety of siting issues. Placing turbines to take advantage of the best wind resources must be balanced with minimizing their impact on existing land uses, neighbors, and the environment. The first part of this section of the Community Wind Energy Toolbox discusses the various issues (apart from wind resource) that should be taken into consideration in siting a community wind project, including:
- Land use
- Aesthetics
- Property values
- Sound
- Public safety
- Liability prevention
- Environmental impacts
- Construction impacts
Chapter 6: Permitting Basics
Dec 15, 2007
If you have a good wind resource and land that is well-suited for wind turbines, you still must consider how your community views and regulates wind power. Communities around the country are working to find the best ways to permit and tax wind generation facilities. Their decisions are vital to windy areas because they determine the impacts and benefits of wind energy projects for the broader community. Some states, like Minnesota, have developed statewide policies but still involve local agencies in the process, while most states leave it to the counties or other local permitting agencies to create regulations and issue permits.
Good project planning means knowing early on what the local requirements are and designing the project to be consistent with those requirements. Investigating zoning laws early in the development of your wind project can help avoid unnecessary delays. This section is intended to give you a quick overview of permitting and zoning regulations in several Midwest states.
Topics covered in this section include:
- Permitting Authorities
- Permitting – State by State
- Conclusion
Chapter 7: Leases and Easements
Dec 09, 2007
In the United States, leasing land to wind energy developers continues to be the most common way rural landowners are participating in wind energy. As the wind industry grows, wind developers are increasing the amount of land they are leasing to keep their future market share from slipping away. Because of this, landowners in windy areas need solid advice about wind energy and what signing a wind energy lease or easement means to both them and future generations who will inherit the land.
The cost of wind energy fell dramatically from the 1980s through 2003, then increased for most of the remainder of the decade. Then, as the recession hit, turbine orders declined and prices with them. Meanwhile turbine technology has significantly improved, so that they are producing energy more efficiently than ever, which is the real bottom line.
Specific costs vary considerably from project to project and region to region due to differences in markets, wind resources, and economies of scale. As you work with your team of experts to plan your wind project, you must estimate these costs, especially in preparation for approaching investors and lenders. Some costs, such as the turbine purchase price, will be fairly straightforward, while other costs may be harder to estimate, such as the level of maintenance and repair your turbines will require. You will need to develop a pro forma, a financial worksheet designed to calculate project expenses and revenues, to determine the financial viability of your plan. The pro forma also allows you to determine what power purchase agreement rate you will need to negotiate in order to make your project financially viable. The pro forma is discussed in the “Financing” and “Business Models” sections of the Toolbox.
Chapter 9: Financing
Most commercial-scale community wind projects are multi-million dollar investment endeavors that require outside financing assistance. This section will give you some background on how to approach a bank or other financing entity. Loan terms will affect the bottom line of your wind energy project revenue, so understanding the requirements and options for financing your wind development are critical. Getting organized in the beginning will put your project in a much better negotiating position for acquiring favorable financing. With enough due diligence documentation, your project will be less risky and more attractive to a financing entity.
The main topics covered in this section of the Toolbox include:
Elements of Wind Energy Finance
Getting a Bank Loan: What will the bank want to know?
At-a-Glance: Third Party Certification
Additional Resources for Financing Community Wind
Chapter 10: Tax Incentives
In order to be financially competitive, most wind projects need to take advantage of federal and, where available, state tax incentives. It is critical to understand the role and mechanics of tax incentives while developing a commercial-scale community wind project because these incentives can represent one-half to two thirds of the total revenue stream over the first 10 years of operation due to the Federal Production Tax Credit (PTC) and Modified Accelerated Cost-Recovery System (MACRS) or other type of depreciation that can be applied to wind energy assets.You will need to consult a tax professional in the early stages of project planning to ensure that your financial projections are valid and accurately take into account the project’s tax burden and benefits.
Different tax incentives apply to different projects based on location, project size, and other tax liability delimiters, so you will need to explore what is currently available and applicable to your project.
This section of the Toolbox provides information on currently available (as of spring 2007) tax incentives that have significantly contributed to wind energy development. It also explains mechanisms for utilizing them to improve your project’s bottom line. The application of many of these tax benefits is also outlined in the “Business Models”,”Financing”, and “Project Calculator” sections of the Community Wind Toolbox. The role of the tax consultant is covered in further detail in the Project Management section.
Federal Tax Incentives
State Level Tax Incentives
Taxation of Wind Energy Property
Additional Resources for Taxes and other Incentives
Chapter 11: Choosing a Business Model
There are several options for structuring a community wind energy project. Business structure options should be evaluated based on their ability to deliver low-cost wind energy and local benefits, as well as on their profitability. In general terms, business arrangements are best when they:
Make optimal use of state and federal incentives (tax credits, production payments, accelerated depreciation, and grants);
Attract lenders offering low interest rates and long financing periods;
Provide an acceptable rate of return for investors; and
Facilitate local investment.
This section of the Toolbox discusses various ways to structure your wind energy business and gives you an overview of the factors to consider when choosing your business model. The main topics covered include:
Factors to Consider
Business Model Options
Models in Practice
Which Business Model is Right for You?
Additional Resources for Business Models
Chapter 12: The Minnesota Flip
The Minnesota Flip business model was developed in response to a unique combination of federal incentives for wind development and state policies that encouraged development of community-owned wind projects. The structure has proven a successful model for landowners and equity investors interested in partnering in the development of wind projects. This partnership allows the equity investor to take advantage of federal tax credits, while providing local owners the economic benefits of ownership.
The purpose of this section is to provide a basic understanding of how the Minnesota Flip model works. The main topics covered here include:
Basic Elements
LLC Structure and Purpose
Ownership Rights
The Flip
Capital Contributions
Distributions and Allocations
Project Management
Other Issues
Chapter 13: Power Purchase Agreement
A power purchase agreement (PPA) is a contract to buy the electricity generated by a power plant. These agreements are a critical part of planning a successful wind project because they secure a long-term stream of revenue for the project through the sale of the electricity generated by the project. Securing a good PPA is often one of the most challenging elements of wind project development.
This section covers the basics of a power purchase agreement and things to consider as you negotiate with a power purchaser. The main topics covered in this section are:
Length of the Agreement
Commissioning Process
Sale and Purchase
Curtailment
Transmission Issues
Milestones and Defaults
Credit
Insurance
Environmental Attributes or Credits
Chapter 14: Interconnection
Interconnection – Getting Energy to Market
The electrical generation, transmission, and distribution system has been labeled the most complex machine ever created by humans. There are many rules and regulations to ensure that it runs reliably, and as a result the process for interconnecting your energy project with this system involves dealing with regulatory agencies at the state and regional level as well as utility personnel, engineering consultants, and lawyers with experience with interconnection contracts. It can take over a year to complete the required interconnection studies and can cost your project up into the hundreds of thousands of dollars. You will need to weigh the results of conversations and studies to determine if it is worth moving on to the next phase of studies or if the cost of interconnection will not allow your site to be profitable.
Most wind project developers choose to hire an engineering consultant to help them properly fill out the required forms, interpret study results, and to act as a liaison between the project, your Regional Transmission Operator (RTO), and the interconnecting utility. This section of Windustry’s Community Wind Toolbox is designed to help you through the process by breaking it down into stages and defining the key concepts and vocabulary you will need to understand while moving through the process.
Here are some quick links to the major topics covered in this section of the Toolbox:
Summary of the Interconnection Process
Understanding the Transmission and Distribution System
The RTO Process
Interconnection Agreement
Additional Resources for Interconnection
Chapter 15: Turbine Selection and Purchase
Even after you have determined that you have a good wind resource and a viable site, putting a down payment on a turbine is a huge commitment. How do you choose the right wind turbine from a reliable manufacturer? The turbine that you choose for your project will depend on your wind resource, the goals of your project, and the price and availability of turbines (many turbines have long waiting lists), as well as the reliability of the machine and availability of spare parts and expertise to fix the machine if it breaks. This section is intended to give you some idea of what to look for when choosing a turbine and to provide you with information on turbine manufacturers and turbine specifications.
Turbine Basics
Choosing a Turbine
Negotiating a Turbine Deal
Commercial-Scale Turbine Manufactures
Additional Resources
Chapter 16: Public Policy
Hundreds of megawatts of community wind projects have already been installed throughout the country, but increased policy support for locally-owned projects is needed so that rural America can continue to benefit from this growing industry.
