Solutions Library

Fox Islands Wind

Lowering Energy Costs

Buy heating fuel in an island community, and you might pay a dollar more per gallon than mainland customers. Electricity prices are similarly high; islands connected to the grid with submarine cables pay high prices due to periodic cable replacements and on-island distribution and maintenance costs. Islands without a cable are often powered by diesel generators, expensive both to fuel and maintain. These same challenges are faced by rural communities in many remote places around North America and beyond. Islanders and others serviced by a small electric co-op face another concern. With only a few hundred (or fewer) customers, set costs like energy generation or transmission, distribution, and maintenance are shared by a small number of consumers. If a large building were suddenly to drop off the grid (which could happen if people pursue individual solutions, like roof-top solar, without community-wide coordination), other users would see an increase in their bills.

North Haven and Vinalhaven have been connected to the mainland via a submarine cable for decades, purchasing power from mainland utilities and distributing it through the Fox Islands Electric Co-op (FIEC). Despite being connected to the grid, distributing power and maintaining infrastructure on the island made electricity costs extremely high. Costs were also traditionally volatile, more than doubling in the peak usage months of the summer, when the islands’ populations swell dramatically.

In 2001, FIEC began exploring options for wind power on the islands, largely in order to stabilize and reduce energy prices but also to reduce carbon emissions. After several years of feasibility studies, the project began in earnest in 2008, breaking ground on a parcel of donated land on Vinalhaven.

In 2009, three 1.5 megawatt wind turbines on Vinalhaven began producing electricity.

The Fox Island Wind turbines as viewed from the ferry to Vinalhaven

HOW IT WORKS

The three GE turbines produce as much electricity as the islands use over the course of a year, though peak production and peak use occur in opposite seasons. In the summer, FIEC buys all of the power produced by the turbines, plus some from the mainland. In the winter, when winds are strong and island demand is low, extra electricity produced by the turbines is sold back to mainland power distributors. They also sell Renewable Energy Certificates (RECs), legal units that signify “green” power generation and may be sold independently of the actual electricity.

 

IMPLEMENTATION STEPS

  • Determine the feasibility of a community-owned resource. The Fox Islands already had a co-op, which was able to buy and sell power from the grid. This made adding generation capacity much simpler than it would be for a community without an existing co-op.
  • Find a viable site. In addition to securing land to build turbines, access roads, and a sound buffer, the Fox Islands Electric Co-Op completed several studies to ensure that the winds blew hard enough to produce power. Additional studies measured noise, potential impact on wildlife, and visual disturbance for residents.
  • Test the economic model. Fox Islands Electric Co-Op assessed the economic viability of the Fox Islands Wind project, finding that the turbines would produce sufficient power to pay for the set cost of production and installation in a reasonable time frame.
  • Get community support—and get it early. The idea for Fox Islands Wind emerged from islanders, not from an outside corporation. Though the Island Institute and others were involved in moving the project forward, island stakeholders were kept informed during on-island meetings and information sessions. The project was put to a vote in July 2008: of 1400 members of FIEC, 383 voted in favor and 5 opposed.
  • Secure financing for the project. The total price tag for Fox Islands Wind was $14.5 million, largely financed by a tax equity investment from a Maine-based company and a loan from the Federal Rural Utility Service. A Harvard Business School professor, George Baker, headed the new Fox Islands Wind, LLC, formed to take advantage of federal tax credits for the project.

 

Q&A WITH CHIP FARRINGTON, GENERAL MANAGER OF FIEC

Did you have to curtail the turbine production in light of noise complaints?

The production was reduced from the get-go. When you do one of these projects you go to the DEP and put a theoretical plan together for a site permit and protocol approval, and after that you have to test them. Based on that, right from the start they were curtailed. The project went online in November 2009, and we implemented a curtailment in May 2010. Over the five years, they’ve generated about 5% less than what the feasibility study had predicted, and the feasibility study hadn’t predicted them being curtailed. So that’s really not too bad considering the circumstances.

What’s the price for consumers?

People say, “Well, if you said it was going to be 6 cents, how come the energy portion of my bill is 9 cents?” There’s a lot that happens once the coop get the power from the wind company, and a lot of those things have always been there with or without a wind farm. Central Maine Power charges us about a penny and a half to use the regional transmission lines to buy and sell from ISO New England. There are transactional fees … it filters through a whole bunch of calculations to come up with the final bill.

What are some of the challenges?

There are challenges in a community or a small coop taking on the responsibility of constructing a wind project. We’re a relatively small entity with nine employees. A developer has trained people and large projects, with a staff on site to assist with operations. In our case, we have five linemen. Two of them have been trained at GE to operate the turbines, but they have all their other responsibilities too. Administratively, there were other responsibilities brought on. Selling RECs, keeping accounting records, insurance coverages, operational records, things like that. We have to keep sound data, download, log and report it. Everyone has adapted well, but it is a lot of additional work.

So far, the project has had one significant glitch in five years, with a bearing problem, and we had to bring the gear box down. The cost was covered by insurance, for an interruption coverage and costs warranty, but the turbines were down and there was a deductible on the insurance. But that’s the most significant thing that has happened, and that’s a very good track record. Going forward we hope for the same thing, and if we can keep the controversy at a minimum the ratepayers will benefit.

What advice do you have for anyone who is interested?

You want to have a solid base of community support. Don’t go too far forward until political opposition is resolved, or it will become a very costly issue. Don’t put up turbines and think that they’re going to operate on their own, that it’s easy, that the vendor is going to be there to help you all the time (although GE has been great). But you have to have administrative and operational infrastructure to operate the project, and that takes a large effort.

 

CHALLENGES

  • Noise. The noise issue was much greater than anticipated during preliminary studies. A group of residents could take issue with noise, view disruption, or other factors and create unexpected challenges if legal limits and studies aren’t rock solid.
  • Actual production. The turbines may not be able to produce as much as projected, due to testing and possible curtailment in the first months of operation. The Fox Islands Wind Turbines were curtailed in spring 2010 but only generate about 5% less than was estimated by the feasibility study.
  • Lack of administrative or technical experience. A wind project creates additional administrative and mechanical work, and a community-run project faces challenges that a commercial wind project may not. The nine employees of the Fox Islands Electric Co-op don’t have the same training as employees of a wind development company. Turbines don’t operate on their own, and the manufacturer may not always be available for assistance.
  • Community support is critical. If there isn’t broad community support before the project begins, it’s likely to face serious hurdles along the way. It can be easy to see the negatives, but it’s important to see the positive sides of a wind project and weigh the pros and cons.

 

OUTCOMES/RESULTS

The turbines have had only one major mechanical issue in five years, but unexpected hurdles have, until recently, increased the price for FIEC customers. A small group of homeowners in the immediate area around the turbines brought legal action against FIEC, citing noise levels above regulation at certain times of the day and year. FIEC has spent over $1M in legal fees, and general manager Chip Farrington says that those fees added a few cents per kWh onto customers’ bills. In early 2015 the case was dismissed, and the rates have since decreased due to a good REC contract and the absence to legal fees.

The turbines produce roughly the same amount of power as the community uses over the course of the year. 60% is used by Vinalhaven and North Haven residents and 40% is sold to the mainland.

 

ADDITIONAL RESOURCES

Originally Published March 2016

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