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Among Many Successes, Some Community Wind Projects Experience New Challenges

Among Many Successes, Some Community Wind Projects Experience New Challenges

Date: 11/11/2013

Community wind projects are small wind projects, usually comprised of a single wind turbine or small grouping of wind turbines. The projects are owned by local municipalities, municipal utilities, schools, or local businesses, or otherwise welcomed or driven by local initiatives but owned by private developers and investors able to take advantage of federal tax incentives. As seen on the New England Wind Forum's wind project map, the past several years have seen numerous successful installations of community-scale, land-based wind projects across New England, particularly in Massachusetts and Rhode Island.

In Massachusetts, small land-based wind projects grew from three turbines to several dozen, adding more than 100 megawatts (MW) to the state's electricity supply mix. Examples of successful projects abound. In Gloucester, the city's two new wind turbines generate enough electricity to power all municipal buildings and generate revenue for community improvement projects. Nearby stands a new 2.5-MW turbine erected by Varian Semiconductor.

In Providence, Rhode Island, the Narragansett Bay Commission installed three turbines to offset electricity use at its wastewater treatment plant, adding new icons to the city's skyline. In Narragansett, Rhode Island, the turbine at Fishermen's Memorial State Park provides clean power to the park's 182 campsites.

Several New England communities, however, are struggling to deal with tensions created by unanticipated complaints over sound or shadow flicker impacts and fears over potential health impacts involving community wind projects operating in close proximity to residences. In addition, mechanical failures have cropped up for two community-owned turbines, and local governments are struggling to address the resulting economic implications.

Where unanticipated post-operational challenges arise for turbines owned by, initiated by, or otherwise initially welcomed by their communities, the solutions explored by communities range from the technical (new coatings on blades, adjusting wind blade angles) to the operational (partial curtailment) to the permanent (decommissioning and removing the facilities). Often the revenues from the sale of electricity generated by the turbines is a significant revenue stream essential for covering the debt or bonds that funded their construction. In such circumstances, communities and developers may find options that result in significant financial loss unworkable. Some examples of these challenges, and the responses of the communities and state agencies responding to these challenges, are described below.

Unanticipated Impacts

In Massachusetts, where community wind development has grown significantly over the past several years, a subset of the community wind projects has encountered these types of issues following beginning of operations. Falmouth is perhaps the best known example, where the town installed two wind turbines at its wastewater treatment plant after extensive community input, fact-finding, and analysis. During the past few years, the town has addressed complaints from the site's neighbors over sound and fears over potential health impacts from the two wind turbines, Wind 1 and Wind 2. Responses have included temporary partial curtailments, additional testing and sound study, and the extensive Falmouth Wind Turbines Option Analysis Process (WTOP), which concluded in late 2012. As a result of the inability to craft a consensus approach, town officials voted to remove the two turbines and began examining the expensive and complex process of dismantling the two units. In May 2013, Falmouth residents voted to reject a proposal to borrow the nearly $14 million required to cover the cost of removing the two turbines. After failing to secure funds to dismantle the turbines, the town has more recently considered other operating scenarios or alternatives strategies, ranging from relocating the turbines and using eminent domain to acquire the impacted homes. (For more information, see the Town's wind website.)

Issues began for the Town of Fairhaven in late 2011 when a group of residents filed a lawsuit seeking to block construction of two 1.5-MW turbines proposed for the town's wastewater treatment plant. Fairhaven has entered into a 20-year agreement with Fairhaven Wind LLC to lease town property and purchase all the output from the turbines, with the town receiving lease payments, property taxes, and savings from electricity purchased at a rate lower than the alternative utility supply. The suit was unsuccessful, and the project began operating in May 2012. The project opponents later sought assistance from the Board of Health to challenge results of a project sound study. In May 2013, the state Department of Environmental Protection (MA DEP) concluded through a post-operational sound study that the facility exceeded the state's noise regulations at five instances during the test period at three locations south of the units. The town then issued a written order (see the Board of Health's meeting minutes) requiring the developer to temporarily shut down the facilities overnight from 7 a.m. to 7 p.m. every day, an overly conservative approach that would be financially damaging to the project owners and would reduce revenues and savings to the town. In the summer of 2013, the board reversed the order, allowing Fairhaven Wind to operate the two units around the clock except during times when the wind conditions would cause the turbines to exceed MA DEP's noise requirements. According to the regional newspaper South Coast Today, the developer will continue to conduct testing to access acoustic impacts of changing the turbine blade angles as part of the agreement.

Complaints about noise from the four wind turbines located in Kingston (three developed by No Fossil Fuel and one developed by Kingston Wind Independence) first surfaced in June 2012. In July 2012, the Massachusetts Clean Energy Center (MassCEC) agreed to commission a sound study for the turbine developed by Kingston Wind Independence. The study began in June 2013. In addition, the MassCEC commissioned a shadow flicker study for the four wind facilities. The flicker study showed that 54 out of the 808 potentially impacted buildings are expected to receive more than 30 flicker hours per year, which is above the best practice cited by the January 2012 Wind Turbine Health Impact Study: Report of the Expert Panel. Local newspaper Wicked Local Kingston reported that the town is seeking additional flicker analysis before it requires any further operational changes. At this writing, the town's planning board is developing new zoning bylaws that would limit the amount of shadow flicker permitted for future wind projects to 30 hours per year.

Mechanical Failures

Portsmouth, Rhode Island installed a town-owned turbine at the local high school in March 2009. Eco RI News reported that during the process, the town incurred about $3 million in debt, to be paid off through electricity savings and electricity sales. Since June 2012, the turbine has been shut down due to a gearbox failure. The town had purchased a 2-year warranty from the Canadian turbine manufacturer AAER, who subsequently declared bankruptcy and ceased operations. Eco RI News reported that estimates for repair/refurbishment could cost up to $780,000, an amount not provided for in the town budget. In October 2012, the town issued a request for proposals seeking bidders for a public-private agreement to repair the broken turbine, but negotiations with respondents ceased without resolution. During summer 2013, the town issued a second request for proposals to fix the turbine and manage its operation, and the three responses are under review.

According to Eco RI News, one proposal is for a 5-year contract that would require the town to pay $500,000 to remove and fix the failed gearbox, plus an annual operation and management fee. Under the agreement, the town would be the sole recipient of the revenue from the sales of electricity once the turbine is operational. Another option would be a public-private partnership between the town and an operation and maintenance firm under which the partner would replace the nacelle and blades and share the revenue from electricity sales between the two parties. The town is evaluating a third proposal.

In 2012, the Princeton (Massachusetts) Municipal Light Department (PMLD) struggled with a similar issue. PMLD is a wind power pioneer, the host of one of the state's first wind farms consisting of eight 40-kW Enertech turbines installed in 1984. At the site of the original wind farm, PMLD had installed two Fuhrlander 1.5-MW wind turbines, which commenced commercial operation in 2010, together comprising a substantial portion of the small municipal utility's power supply. In doing so, PMLD incurred $7.3 million in debt, according to the regional paper The Landmark. However, the south turbine was shut off in August 2011 due to a gearbox failure later determined to be the result of a manufacturer defect. It was repaired and brought back online in July 2013 at a cost of $900,000. As reported in The Landmark, the manufacturer, Fuhrlander North America Inc., announced that the company will no longer maintain a presence in the United States. In February 2012, the German parent company filed for bankruptcy, leaving the ongoing maintenance to PMLD. The cost from the outage time and repair costs, combined with underperformance and reduced electricity market revenues, have put significant economic pressure on PMLD. In late 2012, The Landmark reported that the PMLD board of directors suggested to the Massachusetts Municipal Light Department Wind Energy Cooperative Corporation — which owns the facility — that they consider selling the turbines to alleviate the operations and maintenance risk associated with the project and recoup their investment, ideally coming to an agreement with the buyer to purchase a portion of their output.

There are many compelling rationales for community wind projects, and base-case financial analyses can show such projects to be financially attractive to the host community. However, in retrospect, the experiences of Portsmouth and Princeton provide important lessons for other communities seeking to engage in community wind power. They show that small communities may be ill-suited to take on technology risk or counter-party risk for a material proportion of their power supply. They suggest that such communities consider sizing the project in relative proportion to the overall load (diversifying risk exposure); engaging in contingency planning (using conservative financial assumptions and establishing reserves); securing turbine(s) from a mature supplier with substantial financial capability; and securing a maintenance agreement with a reliable and credit-worthy entity.

States' Alter Roles in Community Wind

Overall, recent experiences with community wind have spurred states to complement efforts encouraging community wind projects with increased support to communities as they consider the implications of siting and managing community projects. In particular, Massachusetts and Rhode Island state agencies have increased their efforts to provide technical support and guidance to communities.

The Rhode Island Renewable Energy Siting Partnership, for example, recruited a team of technical experts from the University of Rhode Island to provide assistance to Rhode Island cities and towns in siting and managing renewable energy projects. The group conducted research on issues associated with renewable energy siting, such as wind resource assessment and siting methodology. It also hosted regular municipal working group meetings to help municipal stakeholders address concerns pertaining to siting. (See New England States Consider Wind Power Siting Legislative and Regulatory Changes for more information on the Rhode Island Energy Siting Partnership.)

In Massachusetts, the state has focused on providing technical assistance for monitoring and testing in several communities and has altered the grant programs supporting community wind. The MassCEC and the DEP, for example, have provided financial and technical support and commissioned acoustic and shadow flicker studies in Falmouth, Fairhaven, and Kingston. In addition, the MassCEC funded Falmouth's Wind Turbine Options Analysis Process.

In June 2013, the Massachusetts Executive Office of Energy and Environmental Affairs announced the launch of the Community Wind Energy Initiative. Under the initiative, a coordinated community wind working group made up of representatives from five state energy and environmental agencies, along with technical experts and residents from communities impacted by wind projects, will provide support and guidance for siting decisions related to onshore wind development:

  • Municipal support: Offer support to communities that are currently hosting or are interested in hosting wind energy projects
  • Acoustic policy: Solicit input on wind turbine sound policy and recommend changes to improve DEP regulations and acoustic standards concerning wind energy turbines through an advisory group process
  • Comprehensive siting guidance: Research national and international wind siting practices and develop wind energy turbine siting best practices for communities in the Commonwealth
  • Monitoring: Support compliance studies and reporting on the impacts of operating wind projects through the MassCEC's Commonwealth Wind funding program.

In July 2013, the MassCEC announced a new Development Grants Solicitation for the Development of Community and Commercial Wind Projects. The new solicitation differs from previous solicitations in several ways, including new public engagement and outreach requirements, requirements for more information regarding estimated community impacts, and project siting from applicants during the application evaluation process. Grant payments will be made in phases based on milestones established by the MassCEC. Projects must complete all milestones within one phase to receive payments for the next one. These phases, including development, design, and construction, each require a public meeting and communications and summary report. By stressing the significance of public involvement, the MassCEC aims to reduce potential risks of public disputes over community wind projects, such as those in Fairhaven, Falmouth, and Kingston.

The recent mixed experiences with operating community wind projects described here will likely prompt communities and wind developers alike to rethink their approaches to considering the costs and benefits of community wind investment in New England. The way communities like Falmouth and Portsmouth address these challenges will have significant implications for community wind development. Successfully addressing citizens' concerns and technical challenges is critical in maintaining an environment for appropriately sited community wind projects and encouraging further growth. The best recipe for broad community wind success is avoiding unanticipated impacts through better understanding of impacts, pre-operational modeling, and community engagement. State support for testing and monitoring, sound regulations, and appropriate financial support will also be critical in providing a foundation for appropriate community wind development across New England.

This information was last updated on November 11, 2013