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United States

Small wind sets up a stumbling block -- Clash of David and Goliath

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Advocates of small scale wind power have been instrumental in getting a land law passed in Minnesota that will prevent corporate players from monopolising the best wind development sites. The new law mandates that land leases signed for wind projects will have a seven year time limit, at which point the project must either be in operation or the developer must renegotiate with the landowner. Windustry, a community wind advocacy organisation, was the lead sponsor of the legislation, signed into law on May 25.

"If it takes longer than seven years to get a project off the ground then our thinking was that the landowner should have another chance to make decisions about their land," says the group's Lisa Daniels. Over seven years much can change, such as the price of energy, the value of the land or green credits, climate change policy and other economics, she argues.

"We don't want the wind rights to be controlled and owned exclusively by large corporate entities -- like with mineral rights," says Daniels. "If a large corporation is just sitting on the wind rights waiting for a large transmission line or other resources to fall into place then they have a window of opportunity and then they must renegotiate with the landowner. This way the value of the wind stays with the landowner."

The new Minnesota law is the toughest of its kind yet seen in the US. North Dakota and South Dakota have similar laws, which Windustry referenced when promoting its own effort in Minnesota, but they are written more loosely, says Daniels. Although not yet tested in court, it does not appear that land leases will have to be renegotiated in the Dakotas after seven years.

The Minnesota law has its detractors. "I think the basic impact of this new law will be a chill through the wind industry in Minnesota," says developer Paul White of Project Resources, who has worked closely with the likes of Vestas and Enxco over the years. He has a 25 MW project underway in Minnesota. "I think the intent behind the push for this new law is not a bad idea -- the concept is not a bad idea -- it's simply the implementation of that concept is flawed," he says.

Most wind plant of any significant size need lead time to develop, often as much or more than seven years, he continues. This is partly the result of a congested interconnection request queue with the Midwest Independent System Operator (MISO). Many projects, he says, are not expected to receive MISO study and approval for at least five years, which now leaves an uncomfortably small two-year window for projects to get financing, buy turbines and get built.

Major slowdown

He worries that by introducing the potential for land lease speculation will add a new risk factor and lead to a major slowdown of development in Minnesota at a time when a bold state mandate is calling for 25% renewables by 2020 (Windpower Monthly, March 2007). Taking the 205 MW Fenton project, developed by Enxco and approaching construction, as an example, White says it signed its land leases seven years ago. "I've heard from folks at MISO that project interconnection is taking much longer these days -- at least three years plus time for transmission to be built. I'm not sure what that means for wind development in Minnesota if wind leases have an artificially short fuse."

Daniels expects some backlash to the law and she readily admits it is not perfect policy. But she does not believe the transmission queue is in such bad shape -- especially for smaller projects that do not need transmission upgrades. White believes the industry is facing a clash of ideals. "It's not a question of wind in Minnesota, it's a question of what flavour," he says, referring to small, community wind projects or larger projects by the industry's biggest players.

Daniels does not mince her words. "The corporate players have hugely deep pockets. They can go across the country and tie up any land they want," she says. "In the scheme of things, this is to keep the land from plain and simply being tied up...we are trying to keep an opening for local development," says Daniels.

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