Friday, June 28, 2013

SD tribes unite on mega wind farm

By Heather Murschel and Adam Hurlburt Black Hills Pioneer 
PIERRE — If the proposed plan to construct the Sioux Wind project on tribal lands in South Dakota comes to fruition, it would have the capacity to generate more wind energy than all of the current wind farms in the state and would be among the largest wind farms in the world.
In an unprecedented move, the Cheyenne River Sioux Tribe, Crow Creek Sioux Tribe, Oglala Sioux Tribe, Rosebud Sioux Tribe, Sisseton-Wahpeton Oyate, and Yankton Sioux Tribe united to advocate for an opportunity to tap into wind energy resources that exist on their lands by using a model that differs from the standard model used to develop wind energy, and other forms of renewable resources in the past.
In South Dakota, tribal lands cover 16 percent of the state and have the capacity to develop as much as 58-gigawatts of power.
The Sioux Wind project has the full support of the Rockefeller Philanthropy Advisors, Arent Fox and several other entities were revealed during the Clinton Global Initiative on June 15. But, tribal leaders emphasized this announcement is just the beginning of the preliminary process, which could take up to two years. However, this has provided the much-needed momentum to move forward with the project poised to generate up to 2-gigawatts of renewable energy.
The Sioux Wind project could exceed the 784-megawatts of power generated by all of the current wind farms in South Dakota, an amount of wind energy production that is lower than North Dakota, Minnesota and Iowa, where approximately 8,500-megawatts or 8.5-gigawatts are generated. To put that in perspective, the American Wind Energy Association reported that 1-megawatt of power is capable of providing services for up to 350 homes, so the minimum amount of renewable energy generated by the Sioux Wind project could provide power to a large city such as Denver, Colo., for up to 20 years.
However, finding a company to purchase the energy and gain access to transmission lines, are both industry challenges that contribute to the overall success or failure of any wind power project.
Once those two are locked into place, financing of the construction of hundreds of large-scale wind turbines will be funded by up to $3 billion in tribal economic development (TED) bonds, which are similar to municipal bonds, but will be handled by the Multi-Tribal Power Authority (MTPA) so start-up costs will be funded by private grants and investments, and the project development costs will be fully funded by authority bonds, rather than relying on federal tax credits.
Bob Gough, secretary of the Intertribal Council on Utility Policy (COUP), spoke to the Black Hills Pioneer Wednesday and said he envisions this project as a demonstration of what wind power is capable of with interconnected production sites.
But the overall cost of the project, he said, will depend on whether new transmission lines need to be constructed, which could cost up to $3 billion and take up to 10 years to complete.
Gough worked closely with former Sen. Byron Dorgan of North Dakota who represents Arent Fox, and with the late Patrick Spears, president of the Intertribal COUP, who began pushing for the project after the 1992 Federal Energy Policy Act was instated to open doors for potential renewable energy developments on tribal lands.
“This has been a dream for many of our member tribes … and right now we have the sense that while we’ve been pushing for a long time, we’ve finally got someone on the other side who can pull,” he said.
But, they are in no hurry. Gough added that they will take all the time they need to make sure this project is done right, and its development occurs at a pace where tribes remain in control.
“There’s an urgency for clean, carbon-free power to take its place in the American energy mix,” he said. “We’re not driven by the closing date of the production tax credit, so we’re taking time to study this.”
Gough added that the nature of this project, where wind farms will be installed on at leaset six separate reservations, lends itself to the notion of an interconnected line or grid of wind farms, which could lead to several other advantages and become an incentive for additional tribes to sign on.
Dorgan shares the same enthusiasm for the Sioux Wind project’s overall success and the dramatic impact it could have on creating a better quality of life for all South Dakota tribes.
“This has exciting implications for the sustainability of the environment and for the self-sufficiency of one of the country’s most resilient but underserved communities,” he said in an op-ed article published by the Clinton Global Initiative on the day of the announcement. “We are honored to have this opportunity to pursue our sacred trust as responsible stewards of the earth, not only on the Mother Land of our tribes, but also as members of the global community.”
Sen. Tim Johnson, D-S.D., is a member of both the Senate Energy and Indian Affairs committees, and said this is “an innovative and ambitious project, and though transmission has remained a challenge for many good projects in South Dakota, this collaboration has great promise.”
Tribal leaders maintain that at this stage in the game, it’s all about “perception,” as the tribal members must invest and become shareholders in the power authority to secure financing and municipal bonds.
Economic Development Advisor for the Rosebud Sioux Tribe, Paul Valandra, said he remains “optimistic” the Sioux Wind project will become a reality, and eventually alleviate the struggles native tribes face due to poverty, joblessness, and economic development.
So, the intention of the Clinton Global Initiative announcement was to garner support and to demonstrate that members of the tribes that have united are dedicated to moving forward.
“It’s all about selling the idea. We’re at a point where we need a credible and reliable power purchase agreement so everyone feels comfortable about making an investment,” Valandra said.
Since tribal leaders began reaching out to large-scale wind energy companies nearly two decades ago, there have been several that have proposed projects, but eventually failed because there wasn’t anyone to sell the energy to.
“If we can come up with 1-gigawatt we’re hoping that someone will come forward to buy the power, but we have to have a solid agreement in place,” Valandra said.
Those negotiations to come up with a fair and equitable agreement, as well the tribe’s inability to utilize the production tax credit, stalled wind power projects on tribal lands in the past. If a power purchase agreement is reached, tribal leaders hope to transmit the energy that has been generated through the Western Area Power Administration (WAPA) that serves South Dakota, North Dakota and Nebraska.
But, because WAPA has agreements with several other carriers, Valandra said the idea that the Sioux Wind project could utilize their transmission lines is one of the “unknowns” at this point, along with whether the lines would need to be upgraded to handle power from the Sioux Wind project. If this is the case, the estimated cost to conduct the improvements could be $3 billion in additional funds. Potentially working with WAPA is an important piece of the puzzle as they were granted the authority to borrow up to $3.25 billion of additional transmission infrastructure, but can only be used by renewables.
Hesitancy among large-scale wind energy companies that attempt to construct a project in South Dakota is nothing new to Steve Wegman, an analyst for the South Dakota Renewable Energy Association. Upon hearing the project proposal announcement earlier this month, he said several wind energy companies that eyed the state for a possible wind farm, eventually failed because of the same two factors that are key in any project — a company to purchase, the energy and the transmission lines.
“We’ve had companies come here with an intention to build wind farms in South Dakota, but they’ve all gone away because no one wants to buy the energy,” he said, noting the recent failure of the Tennessee Valley Authority’s proposal to build a wind farm that would have generated 125-megawatts of wind energy. “We’ve been down this road so many times, and in my mind something like this is not realistic.”
He said building wind turbines is costly, and building transmission lines would cost even more.
“Despite the Clinton Global Initiative and an array of other big entities showing their support, the Sioux Wind project could meet the same sorry fate as previous attempts to harness tribal wind,” Wegman said.