1. ECONOMICS $2008 Vaughn Nelson Cost of Energy$0.06-0.08/kWh Landowner$4,000-6,000/MW/yr Land removed from production 1-3 acres per turbine, primarily roads Construction jobs/100 MW100 O&M Jobs/100 MW10-14 Renewable Energy Credits$3/MWh Carbon trading ?$20/metric ton/yr Green pricing$0.03/kWh

2. INCENTIVES Regulations Federal: PURPA 1978, open transmission 1997 Production Tax Credit (PTC)$0.21/kWh 1985, $0.015/kWh for 10 years (inflation factor), extended a number of times, now through 2011 Green pricing; ~$3 per block of 100 kWh Tax breaks; PILOT, payment in lieu of taxes TX: Renewable Energy Credits (1 REC = 1 MWh) Utilities must acquire % of sales, 08 values ~ $53

3. INCENTIVES Database of State Incentives for Renewables & Efficiency (www.dbsireusa.com) Renewable Portfolio Standard (RPS) TX, 1999; 900 MW by 2003: 2005; 5,880 MW by 2015 (500 MW from other renewables) plus goal of 10,000 MW by 2025 (will surpass in 2010) NM: RPS, investor utilities, 20% (wind 4%) by 2020, wind; rural coops, 10% by 2020 OK: RPS, none

4. May-14 LEVELIZED COST OF ENERGY COE = (FCR * ICC) + LRC + AOM AEP COE=LEVELIZED COST OF ENERGY, $/kWh or $/MWh FCR=FIXED CHARGE RATE, per year ICC=INITIAL CAPITAL COST, $ LRC=LEVELIZED REPLACEMENT COST, $/yr AEP=NET ANNUAL ENERGY PRODUCTION, per/yr AOM=ANNUAL OPERATION & MAINTENANCE, $/yr

5. PERCENT ICC Turbine74-82 Foundation1-6 Electric2-9 Connection to grid2-9 Finance1-5 Land1-3 Roads1-5 Consultants1-3

6. WIND FARMS, COST OF ENERGY

7. May-14 COE EXAMPLE 50 MW WIND FARM, 1 MW TURBINES FCR=8% = 0.08 ICC=$2,000/kW = $2,000,000 LRC=$15,000 AOM=$0.01/kWh availability elevation AEP=2,700,000 98% 1000 m COE = (0.08 * 2,000,000) + 15,000 + 27,000 2,700,000 COE = $0.065 / kWh

8. May-14AEI WIND FARM EXAMPLE 50 MW WIND FARM, IC = $100,000,000 AEP = 50 * 2.7 *10 6 = 1.35*10 8 kWh/yr $.025-.03/kWh, with PTC $.045-.05/kWh Project Income $6-6.5 million/yr Land Owner royalty on $3-4 million/yr 4% = $120,000 - 160,000/yr $4,000-6,000/MW/yr = $200,000 - 300,000/yr 3,000 acres, 5 X 10 D spacing, Land removed from production 2 acres/turbine @ $4,000/turbine = $2,000/acre/yr

9. ESTIMATED ANNUAL ENERGY AEP = CF*GS*8760 CF = Capacity factor (0.30-0.45) GS = Generator rated power 8760 = # hours in year AEP = 0.35 * 1000 kW * 8760 hr/yr = 3,060,000 kWh/yr Then adjust for elevation and availability AEP = 0.9*0.98*3,000,000 = 2,700,000 kWh/yr

10. CAPACITY FACTOR = AVG POWER/RATED POWER

11. CALCULATED ANNUAL ENERGY SpeedPowerHoursEnergy m/s kW kWh 1-4010510 53486829,538 610391494,060 7193904174,381 11748531396,855 141000234233,943 2010004039,540 SUM87603,060,545

12. May-14AEI WIND FARM EXAMPLE SPACING, based on terrain and prevailing wind direction Plains, row 3 - 5 D, row-row 8 -10 D Mesa, row 1.5 - 2 D, 1-3 rows General, row 2 - 5, row-row 5 - 7 D D = rotor diameter Land removed from production, 1 to 5 % 1-2 acres/turbine in plains

13. Satellite view, part of Sweetwater Wind Farm

14. Aerial view, White Deer Wind Farm, yellow lines, 1 sq mile

15. WIND FARM SALES Fixed $0.025-0.035/kWh or $25-35/MWh Market (time of day?), Fuel Costs Price of natural gas at Henry Hub FERC (quarterly reports, MWh, $); have to know official wind farm name. http://eqrdds.ferc.gov/eqr2/frame- summary-report.asp To calculate capacity factor, need wind farm capacity, MW; time period.

16. EXAMPLE INCOME Green Mountain Holdings, Lamar, CO 162 MW, 2008 by quarter #$1,0001,000 MWh$/MWh 14,33313133.00 24,41513433.00 34,72613036.36 45,34714736.36 $18,821,000

17. INSTITUTIONAL NOISE, VISUAL, ENVIRONMENTAL (birds, bats, habitat) 15% in favor, 10% opposed, rest neutral $$$$ Landowner maximum - medium - none RURAL ECONOMIC DEVELOPMENT BIG BUCKS, BILLIONS OF DOLLARS 20,000 MW, Installed cost ~ $40 BB O&M 2,000 – 3,000 jobs