Fox Islands Wind Power Project

Frequently Asked Questions - July 2008

Do the Fox Islands have a commercially viable wind resource?
How much power would such a project generate?
What happens when the wind does not blow?
Is it possible to erect wind turbines on the island? How much will this cost?
How will the Coop pay for this?
What will be the impact on our electric rates?
What are the risks to the Coop and its members?
What are the project's environmental impacts - birds, visual and sound studies, and the larger impact?
Who ultimately decides whether the project should go ahead?

Do the Fox Islands have a commercially viable wind resource?

The UMass wind resource assessment established that the average wind speed on the site was 5.3 meters per second at a 40-meter elevation. At this average wind speed it would be difficult for a wind project to achieve economic viability. However, using industry-standard methodologies, we have estimated that the average wind speed at 80 meters (the proposed height of the turbines at the hub) will be 6.5 meters per second. This is a very good wind resource and, when combined with the high cost of purchased power and the line loss on the submarine cable, makes a wind project consisting of two or three 80-meter turbines on the Fox Islands economically viable.
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How much power would such a project generate?

The proposed project would be sized so that the wind turbines generated about as much power annually as the Fox Islands use, which is between 10 and 10.5 million kilowatt hours per year. This will require two large or three smaller turbines, with a total “nameplate capacity” of between 3.7 and 5 megawatts. In 2007, the maximum load that islands used was about 2.6 megawatts, so when the wind is blowing hard we will generate more power than we use.
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What happens when the wind does not blow?

The wind blows intermittently, and it blows harder in the winter than in the summer. Thus, while the project is expected to generate—over the course of the year—as much power as the islands use, we will not be truly “self-sufficient.” The project will make extensive use of the submarine cable. Indeed, this project would not be viable if it were not for the investment made four years ago in the new cable. The wind project will generate more power than the islands use most months of the year, but the Coop will continue to be a net power buyer in the summer. Over the course of the entire year, the Coop will buy and sell roughly equal amounts of power. Detailed simulations of the wind velocity and power load over the course of a year suggest that the Fox Islands will consume roughly 60% of the power generated by the turbines on the islands, and sell the remaining 40%. We will also need to buy roughly 40% of our total needs over the submarine cable.
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Is it possible to erect wind turbines on the island? How much will this cost?

FIEC has hired (with the assistance of the Island Institute) the Maine-based engineering firm of Woodard & Curran to do an assessment of the logistical feasibility of the project, as well as an analysis of the required electrical interconnection, a visual-impact analysis, and a detailed cost estimate. This study determined that the turbines can be transported to the island, they can be moved over the Vinalhaven roads with minimal disruption, and they can be erected on the site. In addition, the amount of work required for electrical interconnection is modest.

The exact cost of the project will depend on the number and type of turbines chosen. However, based on current turbine pricing estimates, and on the detailed cost analysis performed by Woodard & Curran, the cost of the project is expected to be in the range of $10 to $13 million.

The annual operating costs are expected to be less than $150,000 per year, including an Operations and Maintenance contract with the turbine manufacturer that covers all required service and maintenance, as well as a warranty contract and full insurance. Coop personnel will not be responsible for maintaining the turbines.
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How will the Coop pay for this?

The Coop is exploring numerous financing options for this project. There are several major federal tax benefits to companies that erect wind projects. Unfortunately, these tax benefits are of no value to the nonprofit FIEC. However, it may be possible to bring in a passive investor who would have no active role in the management or operations of the turbines, and who could provide up to 40% of funds required for the project in return for these tax benefits. We have already gotten a commitment from one Maine company to make this type of investment. This will require the creation of a new entity, Fox Islands Wind LLC (to be owned by FIEC and this passive investor), which will own the turbines and sell all of the output to the Coop.

Another possible source of financing is the pre-sale of Renewable Energy Credits (RECs). The project will generate “green electricity,” which can be sold lucratively to electric utilities in other New England states. We may be able to raise as much as 20% of the total cost of the project through pre-sale of these RECs.

The Coop has also applied for a $1.5 million grant from the Federal Rural Utilities Service (RUS) to help pay for the project. Another possible source of funds could be Program Related Investments by foundations.

Fox Islands Wind LLC expects to raise the remainder of the funds required for the project by borrowing from the RUS, which makes loans at under 5% interest rates for renewable energy projects.
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What will be the impact on our electric rates?

Because the project will be generating as much electricity as the islands use in a year, the project will significantly insulate the Coop members from future electricity price increases. Given the increasingly volatile price of electricity in recent years, this is a major benefit. Furthermore, depending on the cost of financing, and assuming a 9.5¢ per kwh purchase price of power from the mainland, we expect that rates may be able to decline by between 3 and 5¢ per kwh (about 17%) in the first ten years after the turbines begin operating, and an additional 3-4¢ per kwh thereafter.
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What are the risks to the Coop and its members?

Because the project will generate the same amount of power as the islands use, the Coop’s members will be entirely protected from future increases in electricity prices. For the same reason, the Coop is completely protected from declines in the price of electricity. Since the Coop will be buying and selling power in equal amounts, neither increases nor decreases in power prices will affect the economic viability of the project.

In addition, by pre-selling the Renewable Energy Credits, the project is not at risk should conditions in that market change. Finally, historical variation in year-to-year average wind speed has been quite modest. A 5% decline in annual average wind speed (which has not happened once in the past 11 years) would not lead to any difficulty in making required principal and interest payments.
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What are the project’s environmental impacts—birds, visual and sound studies, and the larger impact

FIEC and the Island Institute jointly funded a study of potential impacts of the project to birds and rare plants. The bird survey, conducted by Richard Podolsky and Norm Famous, has been underway since April 14, 2008. The spring migration study concluded, “The site hosted very few migrants and breeders – due to the fact that it is so dominated by granite outcroppings and is essentially therefore marginal habitat for all birds. Also, the airspace above the outcrops does not host a lot of high-flying transiting birds. Because the outcrops are permanent features of the site, we do not think it likely that the mid-summer or fall bird data will alter our preliminary conclusion that exposure to all bird species from 2-3 wind turbines at this site should be extremely low.” Additional bird studies will be conducted throughout the summer and through the fall migration.

This environmental study also found no rare plants at the site.

The visual impacts have been analyzed by Woodard & Curran with digital images from surrounding vantage points to simulate the appearance of 250-foot towers and 120-foot blades on the landscape. These images are available at www.foxislands.net/windpower.

Detailed sound studies can only be simulated once a particular turbine size and site configuration has been finalized. Vinalhaven’s Wind Power Ordinance requires that sound from turbines not exceed 45 decibels at the property line. Maine’s wind-power development statute recommends that the 45-decibel limit not be exceeded at the nearest residence. The engineering report recommended that the Vinalhaven Wind Power ordinance on sound impacts be modified to conform to new state guidelines. Preliminary studies have been completed indicating the need for a more detailed study of the effects of ambient wind and vegetation on the site by the engineering firm Resource Systems Engineering of Biddeford, ME.

Other considerations: Once erected, wind turbines emit no greenhouse gasses, pollutants or heavy metals into the air. They do not release heat into rivers, lakes or the atmosphere, and require only a small amount of land and infrastructure. Annual maintenance of each turbine requires only a small amount of fossil-fuel use for maintenance crew transportation, replacement parts, and lubricant disposal. It is not necessary to mine, produce, or process fuel for a wind turbine to produce electricity. Wind turbines are significantly quieter, more picturesque, and more wildlife-friendly than coal or natural gas fired electrical plants or nuclear reactors. Turbines may be disassembled and recycled.
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Who ultimately decides whether the project should go ahead?

The Vinalhaven Planning Commission has the authority to approve or deny a wind power development proposal based on the town’s 2006 ordinance. If a project permanently disturbs fewer than three acres of land, no state-level review by DEP is required, although DEP requires all such projects to get approval for a storm-water run-off plan. The RUS will require an environmental-impact review as well.

The directors of FIEC have the authority to enter into contracts to lease land, borrow money and conduct other business on behalf of its membership. FIEC directors, however, will ask members to vote by ballot on whether to proceed with the wind power plan at its annual meeting, July 28, 2008 at the Vinalhaven school auditorium.
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