A Case Study in A Case Study in Community WindCommunity Wind

New Ulm Public Utilities New Ulm Public Utilities Commission -Commission -

Success with Due DiligenceSuccess with Due Diligence

WelcomeWelcome

IntroductionIntroduction

Advanced wind Advanced wind resource assessment resource assessment

bringsbrings

success to communitysuccess to community

wind developmentswind developments

Defining Community WindDefining Community Wind

What is community wind?

Is it… Size? Location? Economics?

Community-based wind energy development is partially owned by local land owners or local stake holders

Who is New Ulm Public Utilities Who is New Ulm Public Utilities Commission?Commission?

New Ulm Public Utilities Commission (NUPUC) is a municipal utility serving ~6,000 consumers

Goal to identify an economically viable and long-term new electrical generation resource

NUPUC analyzed ~10 options for existing and new

generation NUPUC ascertained that wind was the most competitive long-term

Called for RFP’s form third party power producers This was unsuccessful because third party vendors were too costly

NUPUC and Wind EnergyNUPUC and Wind Energy

Advanced methodology wind resource assessment enabled NUPUC to make time and risk sensitive decisions

By providing detailed long-term analysis in weeks vs. years Leads to making time sensitive and capital investment decisions

Robust methodology and detailed analysis results were used in the economic analysis

3D gridded data vs. singular met data Giving high detail across the entire development site

Long term data analysis vs. 1-year data

Provided opportunity-cost benefits and project planning advantages Original wind turbine cost estimates were for $1,200/kW, now $1,500/kW

EconomicsEconomics

NUPUC has completed their economic projections

Determined that they need 5 MW of wind energy

They were able to scope and model project cost

They will achieve their MN RPS mandate (Renewable Portfolio Standard)

They will be able to use CREB’s for their project (Clean Renewable Energy Bonds – IRS website)

Project output and projected revenue are now known

NUPUC’s high confidence in economic projections started with detailed wind resource analysis

Determining Economic BenefitDetermining Economic Benefit

Three main initial due diligence components:

Wind speed

Access to transmission/site constructability

Economic analysis

Wind Resource Assessment Wind Resource Assessment ValueValue

Long term wind resource assessment provided NUPUC with valuable data

P-95 wind speed is around 7 to 7.5 m/s annual average

NUPUC has less risk in spending capital

Interconnection studies and permitting

Met tower assessment

Turbine vendors down payments

Balance Of Plant design

High value at the beginning of project

Next Steps for NUPUC?Next Steps for NUPUC?

The challenges of being local – working with your neighbors

Further planning and investment is now feasible BOP Local stakeholder negotiations Validation of wind speed Financing Permitting Maintenance contracts

Building in 2009 2010 season

Points to RememberPoints to Remember

Community wind is economically viable and valuable to communities

Advanced wind resource assessment mitigates long-term and near-term capital and time sensitive risk issues

The development process is sensitive – work with and educate your neighbors about the advantages of community based wind

Successful community wind is based not just on economics but also local ownership and involvement

Thank you!Thank you!

Wind energy is great for communities – local wind farms empower communities

A special thank you to Pat Wrase and the New Ulm Public Utilities Commission

Yusef OrestWindLogics Inc

yusefo@windlogics.com