Study finds wind turbines can be cost-effective
A new study, partially funded by the Colorado Department of Agriculture's Advancing Colorado's Renewable Energy grant, finds that wind turbines can be cost-effective even at sites with moderate wind speeds.
"This study is encouraging for Colorado agricultural producers that want to harness wind energy but are not located in areas with strong wind resources," said the CDA's Markets Division Director Tom Lipetzky.
A site with a marginal wind resource is classified by the National Renewable Energy Lab as having an average wind speed between 13.2 and 15 miles per hour at 50 meters above the ground. A 30-percent federal tax credit available for wind turbines up to 100 kilowatts in size typically lowers payback times by four to six years, the study says. Utilizing the tax credit can make wind turbines economical at sites with "marginal" wind resources.
The study, conducted by Brink, Inc., an environmental consulting company based in Erie, Colo., included on-site wind speed monitoring at three agricultural operations located in Elbert, Morgan and Yuma counties. On-site wind speed data is compared with NREL's Colorado 50-Meter Wind Resource Map. The cost and output of several different wind turbines, along with the availability of tax credits, loans, and U.S. Department of Agriculture grants were also reviewed to determine their effects on wind turbine payback time frames. The report entitled, "Wind Resource Evaluation at Colorado Agricultural Operations," finds that:
--The 30-percent federal tax credit can largely offset loan interest cost or reduce simple payback times by about five years.
--Limits on cost-share funding and federal tax credit eligibility tend to make smaller turbines more economically feasible than larger, more efficient turbines.
--Turbine payback times ranged from four to 23 years.
--All wind turbines are not equally efficient at producing electricity. Buyers should examine the ratio of turbine and tower cost versus electricity output to determine the best-fit turbine.
--Besides electricity, wind turbines also produce Renewable Energy Credits, which have value to companies and individuals interested in purchasing greenhouse gas offsets. Some Cooperative Electric Associations pay for customer-generated RECs, while others claim the rights to customer-generated RECs.
--A wind turbine with a 15-year payback time frame will produce a return on investment of about three percent annually, assuming a turbine life span of 30 years.
--NREL's Colorado 50-Meter Wind Resource Map is generally adequate to use when estimating small wind turbine outputs, as long as an adjustment is made for tower height differences.
--The evaluative methods used in this study may be utilized to determine the wind resource value for any type of agricultural operation.