Harvesting the prairie wind: Minnesota farmers structure wind business to keep more energy dollars close to home

Rural Cooperatives, Nov-Dec, 2007 by Dan Campbell

Surrounded by fields of corn swaying in an early autumn breeze, Mark Willers makes his way to a wind turbine soaring more than 240 feet into the blue Minnesota sky. After pointing out to a visitor the surprisingly small "footprint" of the turbine--corn grows to within a few yards all around the tower--he unlocks the access door in the base and examines the computer that is both the brain and nerve center of the turbine.

On the outside, the turbine looks deceptively simple: a mammoth, three-bladed fan twirling on the end of a sleek, cream-colored tower. But modern wind mills such as this are works of technological genius--a 21st Century harness for one of the oldest forms of power known to mankind. The result is the generation of wind energy at levels unimagined even a decade or two ago. This two-megawatt turbine, as tall as a 30-story building, can produce 6 million kilowatts of electricity annually, enough to light up 600 homes.

But it is not a simple process. The computer constantly adjusts the tilt of the blades, based on fluctuations in the wind currents.

This turbine is one of 11 that comprise the Minwind Energy wind farm near Luverne, in the southwest corner of Minnesota. The turbines, built between 2002 and 2004, look no different than most of the modern turbines that now produce more than 11,600 megawatts (MW) of electricity in the United States (74,200 MW worldwide) each year.

But this wind farm is unusual in one very critical aspect: it is owned and operated by about 300 area farmers and other community members. Most other wind farms in the United States are owned by private power companies. Willers and his fellow members in Minwind--an LLC that operates on cooperative principles--feel that this absentee ownership pattern represents a lost opportunity for rural America.

Owning the wind

When farmers and other rural landowners sell wind power rights to their land for only land lease payments, "it's a little like colonialism in reverse," says Willers, a fourth-generation Minnesota grain farmer. His great grandfather in Germany made his living in the late 1800s exporting German and Russian wheat to the United States at a time when it was still wheat deficient.

The real money to be made from wind power comes not from land rental, but from the generation of electrical power, says Willers, who is also CEO of Minwind.

With southwest Minnesota being such a high-wind area, and the nation hungry to develop renewable energy, there is little doubt that wind power is going to continue to grow here and in other windy regions of the United States-primarily the Upper Midwest, Eastern Slope of the Rocky Mountains and Great Plains states.

"These wind projects are going to get done--either by big corporations or by producer and community groups," says Tom Arends, a Minwind member and a semi-retired grain and hog farmer. But there is no doubt where his heart is. "With community ownership, it is going to keep more money circulating locally and create more jobs. It's easy to lease land to a power company, but how many in your community will really benefit from that? Very few."

A new vision for wind power in rural America is needed. "We must find ways to keep more of these wind-energy dollars within our state and within the Midwest--and we need to collaborate to make it happen," says Willers.

New spin on wind

Farmer and community ownership of wind power is a new spin on the rapidly evolving renewable energy scene. One does not need an advanced degree in economics to see why local ownership matters.

For starters, landowners must understand what percent of gross wind power revenue they are getting for leased land. Most wind lease payments are running 0.5 to 1.5 percent of gross value, says Willers. "Farm land is certainly not being rented for one-half percent of the gross." Nor do the iron ore or timber industries lease land for such a minimal fee, he observes.

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"Our goal has always been to invest in businesses that support a growing community, and that means we need to have the land lease revenue, the gross power production revenue and the tax revenue all stay in our local community," Willers says.

"If someone is going to be making money off my land, it should be me--not some power company, and especially not an Australian or Spanish company," adds Arends, who is concerned about growing levels of foreign ownership of U.S. wind rights.

Local governments and schools in Minnesota benefit from wind power via a production tax leveled per kilowatt of power generated. It is copied after a Danish model, so that bigger turbines pay more. For each 100 MW of wind power generated in Minnesota, about $1 million in tax revenue is paid to local governments and schools, according to Windustry, a nonprofit organization that provides technical support for rural landowners and communities pursuing wind energy projects.

Wind power is certainly not a "get-rich-quick" technology, and farmers thinking they might reap fast "windfall profits" should think again, Arends advises. "A lot of people really hit it big for a few years with ethanol, but this is quite different. The goal with wind is a slow, steady stream of income."