Wind Farms in Your Community

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1 Wind Farms in Your Community David G. Loomis, Ph.D. Director, Center for Renewable Energy Professor of Economics Illinois State University University of Illinois Extension Teleconference: Siting & Permitting Wind Farms in Illinois April 19, 2012

2 IL Wind Working Group The IWWG is an organization whose purposes are to communicate wind opportunities honestly and objectively, to interact with various stakeholders at the local, state, regional and national levels, and to promote economic development of wind energy in the state of Illinois.

3 IL Wind Working Group Part of the U. S. Department of Energy s Wind Powering America Program One of 34 state wind working groups across the country Partially funded by a grant from the U. S. Department of Energy Comprised of over 150 stakeholders in Illinois wind energy Hosted by Illinois State University

Illinois Wind Working Group Website: www.renewableenergy.ilstu.

4 Illinois Wind Working Group Website: Annual Wind Conference, July 17-18, 2012, Normal, IL

5 works to meet the growing need for education, outreach and research in the area of renewable energy. Three major functional areas: to enhance the renewable energy major at Illinois State University; to serve the Illinois renewable energy community by providing information to the public; to encourage applied research concerning renewable energy at Illinois State University and through collaborations with other universities.

6 Why Wind Energy Benefits of Wind Projects Revitalizes Rural Economies Creates Jobs Promotes Cost-Effective Energy Production Supports Agriculture Reduces Air Pollution and Global Warming Clean, Domestic Energy Ensures a Sustainable Energy Future

7 ILLINOIS IN NATIONAL PERSPECTIVE

10 WIND FARMS IN ILLINOIS

12 Wind Farms by County (MW) County (IL) Completed Construction McLean LaSalle 312 Ford/Iroquois Livingston 300 DeKalb Lee Bureau Stephenson Marshall 90 Stark 60 Tazewell 57 Logan 43.5 Henry 280 Chicago City* 0.75

13 Permitted Projects by County County (IL) Permitted Henry 704 McLean 700 Livingston Woodford 150 Ford 145 Kankakee Lee Stephenson 80 Iroquois 70.5 Marshall 40 Warren 20

14 Wind Property taxes in Illinois Prior to 2007, each county decided for itself how to assess the value of a wind turbine for property taxes 2007: Public Act standardizes valuation at $360,000/MW, annually adjusted for inflation and depreciation In April 2010, extended through 2016 If it ever expires, valuation will return to individual counties

15 Wind Property taxes in Illinois Example:

16 Applied Research 2011 Illinois RPS: Context, Structure and History of the Policy Loomis/Pagan Optimal Wind Energy Portfolios in Illinois Chupp/Hickey/Chupp Impact of Wind Farms on Property Values Loomis/Carter Wind Farm Implications for School Revenue - Aldeman/Loomis/Willis Economic Impact of Wind Energy in Illinois Loomis/Carter

17 Illinois RPS Loomis/Pagan PURPA and IL Restructuring 2006 Auction Results IL Power Agency Act Renewable Energy Procurement including LT contracts

18 Property Value Study #1 Wind Farm Proximity and Property Values: 2010 Hinman

19 Results Properties decreased in value after announcement but rose after operation. In two stage model, properties appreciated 17.2% after wind farm operation In three stage model, properties depreciated 11.7% after county permitting but appreciated 11.7% (relative to the price before the wind farm) after operations

20 Property Value Study #2 Carter Lee County, Illinois 3 Wind Farms November, April, 2007 and December, Hedonic price model using 1,298 real estate transactions from 1998 to 2010.

21 Property Value Study The analysis indicates that residential properties located near wind turbines in Lee County have not been affected by their presence. Mendota Hills Wind Farm in Lee County, Illinois has not impacted the average selling price of nearby residential real estate. Lee-DeKalb Wind Center and GSG Wind Farm have fewer observations.

22 Economic Impact 2011 Limited to projects > 50MW 17 projects total 2, MW Jobs and Economic Development Impacts (JEDI)

23 Projects Studied

24 Results

25 Decommissioning Costs Wind Farm Project Title State County Number of Turbines Type of Turbine Total Size of Project Per-Turbine Cost Estimate Beech Ridge West Virginia Greenbrier 124 GE SLE 1.5MW 186 MW -$14,645 -$9.76 Big Sky Illinois Bureau 114 Suzlon S MW 240 MW $19,860 $9.46 Buffalo Ridge II South Dakota Brookings 204 Suzlon 2.1-MW MW $79,355 $37.79 California Ridge Illinois Vermilion 134 GE MW $16,042 $10.03 Crescent Ridge Illinois Bureau 33 Vestas 1.65 MW 54.5 MW $24,624 $14.92 Hounsfield New York Jefferson 84 Vestas 3.0MW 252 MW -$1,000 -$0.33 Infinity North Dakota Nelson 2 NEG Micon NM MW $42,300 $ kw Kingdom Vermont Orleans 20 GE 2.5 MW 63 MW $305,000 $ Community Lee DeKalb Illinois DeKalb 151 Siemens 1.5 MW MW -$1,031 -$0.68 Marble River New York Clinton 109 Gamesa G MW 218 MW $9,900 $4.95 Monarch Illinois Warren 13 GE 1.6xle 20.8 MW $28,039 $17.52 New Grange New York Chautauqua 47 Vestas V MW 84.6 MW $53,955 $29.98 Oliver II North Dakota Oliver 32 GE 1.5 MW 48 MW $28,500 $19 Pinnacle West Virginia Mineral 23 MWT 95/ MW -$1,545 -$0.64 Pioneer Trail Illinois Iroquois 94 GE 1.6xle MW -$2,770 -$1.73 Record Hill Maine Oxford 22 Clipper Liberty 2.5MW 55 MW $37,646 $15.06 Ripley-Westfield New York Chautauqua 61 Siemens SWT MW $64,680 $28.12 Spruce Mountain Maine Oxford 10 Gamesa G8X 2.0 MW 20 MW $26,732 $13.37 Stony Creek New York Wyoming 59 GE 1.5 xle 88.5 MW $17,494 $11.66 Velva North Dakota McHenry 18 Vestas V47-660/200kW Per-kW Cost Estimate 3.6 MW $39,750 $198.75

26 Project Size (MW) Decommissioning Costs 250 Project Size (MW) Cost per kw ($)

27 TRENDS FOR 2012 AND BEYOND

28 Federal Policy Issues PTC Extension One year to build a wind farm Strong construction thru will see a fall in new construction for each quarter the PTC extension is delayed Federal RPS

29 Regional Issues New Transmission Capacity MISO expansion/pjm expansion Asymmetric Regulation Rate-of-Return versus Competitive market

30 State Policy Issues State RPS In-state preference expired Iowa/Indiana wind versus Illinois wind Illinois Power Agency Change in Directors Uncertainty in procurement Long term contracts Impact of Smart Grid bill?

31 For More Information, Contact David G. Loomis Illinois State University Campus Box 4200 Normal, IL

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Invenergy. The Power of Innovation The Power of Innovation Discussion Outline Introduction to Wind generation development 101 The impact of HB 1871 The Illinois state RPS Wind Overview Operational Projects Contracted Projects Offices Midwest