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“In wind power, the best policy is to go local.”

November 8th, 2011 · No Comments

In wind power the best policy is to go local. According to DOE’s Wind Technologies Market Report by Ryan Wiser and Mark Bolinger, wind energy projects between 5 and 20 MW have the lowest costs compared to wind projects of any other size

Small Wind Farms Cost Less Than Big Ones

I’m a firm believer in the economies of scale. I’ve always thought that things done on a larger scale are not only efficient but cost-effective as well. But the whole concept of buying wholesale to save is not always true. Not in the clean energy sector anyway.

We’ve always assumed that giant wind farms producing 100 MW of electricity or more have lower building, materials, and maintenance costs which could translate to lower electricity costs for consumers. The assumption is wrong.

It may seem counter-intuitive but as it turns out, as far as wind farms are concerned, smaller is better according to the U.S. Department of Energy.

According to DOE’s Wind Technologies Market Report by Ryan Wiser and Mark Bolinger, wind energy projects between 5 and 20 MW have the lowest costs compared to wind projects of any other size (please see graph above).

Large-scale wind projects above 20 MW capacity are disadvantaged and accrue additional costs from more regulatory, financing, and infrastructure requirements:

Projects over 20 megawatts must by processed by the Federal Energy Regulatory Commission (FERC), a more onerous step than smaller projects being handled at the state level.

Additionally, projects of inordinate size may require special financing that only a few large firms can handle, adding a price premium.

Finally, large projects may only be possible with the addition of new transmission line capacity, both a costly and time-consuming process.

The findings may signal opportunity for many communities planning to build their own small wind installations much like the seven-turbine South Dakota Wind Partners project jointly owned by 600 residents in the area. Small-scale projects below the 20 MW capacity do not fall under FERC regulation, can easily secure financing through mid-sized regional banks, and would need no lengthy transmission lines to deliver electricity to nearby residents.

As John Farrell of the Institute for Local Self-Reliance (ILSR) puts it, “In wind power, the best policy is to go local.”

Via Grist
Photo: Energy Self-Reliant States

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