Access to transmission lines a key to wind farming

Posted: Friday, March 15, 2002

The three rules of wind farming are location, location, location.

Dr. Vaughn Nelson, head of the Alternative Energy Institute, told nearly 200 people Thursday at the Windy Landowners Seminar at West Texas A&M University that the three most important considerations in wind farm development are having land with a good wind resource, a contract to sell energy and access to transmission lines.

It is easier to sell energy close to major load centers such as Dallas, Houston or San Antonio, he said, but windy lands are not usually close to urban areas. That is why access to transmission lines is critical.

While Nelson said he expects to see at least three more wind farms in the Texas Panhandle in the next few years, Steve Jones of Xcel Energy said his company has no need for any additional renewable energy sources in Texas.

Jones said the 80-megawatt wind farm near White Deer should meet Xcel's future obligation under state mandate to provide energy from a renewable resource.

Landowners involved in such projects, however, could enjoy payments and royalties for the use of their resources over two or three decades while still being able to use much of their land for crops or grazing.

Ken Starcher of the Alternative Energy Institute said normally a developer wanting to establish a wind farm will lease land at a flat rate or from 75 cents to $1.75 per acre for one to three years to assess the wind availability with an option to lease the land for a wind farm.

Once the assessment is completed, a contract for a wind farm normally runs 20 to 30 years with options for extensions.

A landowner may opt to take a royalty on production, normally 2 percent to 5 percent initially with an escalation clause after a given number of years, or a per turbine charge based on the rated power of each turbine, normally $2,000 to $2,500 per megawatt.

A combination of the two methods, whichever yields the larger payment to the landowner annually, Starcher said, is starting to be used in the industry.

Fees and charges can be adjusted to allow for loss of hunting rights, construction of gates, fences and cattle guards, water, and roads, Starcher said.

Using a 50-megawatt wind farm as an example, Starcher said it would cost about $50 million to build such a facility, but the operation would generate from $4 million to $6 million in energy annually.

If a landowner collected a royalty of 2 percent, that would translate into $85,000 a year. Such an operation would take about 2,000 acres because of the spacing of the turbines, but at seven turbines per acre, the landowner would lose only about 350 acres that he wouldn't be able to continue to use for crops or grazing.

Despite the electric utility's outlook for using renewable energy sources, Nelson said he is optimistic about the future of wind-generated energy, something he said lends itself to the Great Plains.

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