Private Equity Solutions

Prospective wind turbine promotes renewable energy

Date 3/9/2006 12:00 AM | Topic: News

By the end of 2007, Luther College property may be the home of a power generating $3.5 million wind turbine.

The wind turbine site is located on a knoll at the northeast intersection of Pole Line Road and Highway 52.

Luther has received a firm bid on a wind turbine that is currently being built by Clipper Windpower, a wind energy technology company located in Cedar Rapids, Iowa.

The final price tag of the wind turbine is $3.5 million. The 2.5 megawatt turbine and tower will cost about $2.7 million. Additional costs include transportation, the groundwork to accommodate the device and installation.

In 2004, a study conducted by Wind Logics found that wind speeds at the height of 80 meters are adequate for a commercial-scale turbine.

A 50 meter tower installed in June 2005 is measuring winds to confirm the computer model data.

Jim Martin Schramm, associate professor of religion, and department head, has done a great deal of research for the project. He explained the financial approach that will most likely be taken.

"We are interested in attracting an equity investor, who would put up the funds to purchase a turbine," he said. "The equity partner would receive the money from the sale of the electricity and combine it with a federal tax credit. This would result in a bigger economic return to the investor."

Luther has also applied for a state renewable energy production tax credit program but is not yet eligible.

"Both the state and federal tax credit program for renewable energy producers last for 10 years," Martin-Schramm said. "Once they expire, we hope our equity partner will gift the remaining value of the turbine so that Luther can benefit financially from the second half of the life of the turbine."

To achieve this goal, Luther is currently negotiating with a large company that employs many Iowans and has several manufacturing facilities in the state.

Martin-Schramm is optimistic about an all-Iowa project. The project involves an Iowa college; an Iowa wind turbine manufacturer, Clipper Windpower; an Iowa utility company, Alliant Energy and an Iowa investor.

"I hope the non-monetary public relations benefit of the all-Iowa project will appeal to an equity investor," said Martin-Schramm.

There are several matters, however, that will have to be resolved before this project can be successful. These include negotiations with Alliant about the sale price of the electricity, confirming the amount of wind resource at the site, qualifying for the state tax credit and securing a wind turbine purchase contract. With a 15 month lead time for acquiring a wind turbine, it is important that the first three aspects are resolved by this summer.

Luther has made considerable progress in becoming more environmentally responsible. Due to energy efficiency initiatives undertaken in partnership with Alliant, Luther reduced its greenhouse gas emissions by 20 percent between 2003 and 2005.

The wind turbine would produce an amount of electricity equivalent to 40 percent of Luther's annual consumption and would emit no greenhouse gases in the process.

Martin-Schramm believes the reduction in greenhouse gases is the primary benefit of acquiring a wind turbine.

"Gaining a wind turbine makes a statement about Luther being a leader of environmental stewardship," he said. "It would educate students and the Luther community about the potential and importance of renewable energy."

Another benefit is that the wind turbine is economical; no fuel cost is involved.

Once Luther is able to install a wind turbine, Martin-Schramm would like to encourage a local wind farm.

"I think Luther would be interested in working with others in Winneshiek County to figure out how to share the benefits of wind energy with them."

Other private liberal arts colleges have become interested in wind energy. Carleton College has a wind turbine near its campus and St. Olaf is in the process of installing one with a grant from the state of Minnesota.

Luther's wind turbine project has received widespread support from the Luther community. In 2003, a campus-wide survey was conducted by Jon Jensen's environmental studies class. It revealed that 92 percent of respondents were supportive of Luther having a wind turbine.

Luther administration at the highest levels is also behind the wind turbine project. The Board of Regents, President Torgerson and Diane Tacke, vice president for finance and administration have been supportive and involved.

Tacke's interest in a wind turbine is driven by her concern for the environment.

"I'm very concerned about our reliance on fossil fuels and corresponding greenhouse gas emissions," she said. "We must develop a reliance on other, cleaner forms of energy."

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Kassie Petermann

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