No ante yet as search for partner lingers

July 11, 2010
| By Pete Daly |
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RFPs sent out in the spring by a GVSU/U-M partnership seeking a private partner to help fund a study of commercial wind energy potential in Lake Michigan failed to turn up the required capitalists.

There were two proposals in response, said Arn Boezaart, executive director of GVSU’s Michigan Alternative and Renewable Energy Center in Muskegon, but “neither of those offered any funding … so we’re sort of back to the drawing board now.”

Neither of the responses was from Scandia Wind Offshore, a Minnesota company partnering with Norwegian wind farm developer Havgul Clean Energy. That commercial partnership had been proposing various wind farm configurations several miles out from Oceana, Muskegon and Ottawa counties, but has run into opposition in Mason and Oceana from lakeshore property owners who object to the appearance of wind turbine towers on the horizon.

The U.S. Department of Energy recently confirmed a grant of $1,427,250 grant for the research project, a partnership between MAREC and the University of Michigan’s Phoenix Energy Institute. The project has now secured a total of $3.1 million in grants and research funds, including a $1.36 million energy-efficiency grant from the Michigan Public Service Commission and roughly $350,000 from U-M. The project would entail construction of a single offshore structure in Lake Michigan that will allow the collection of year-round wind data and other related information. The data will assist in evaluating the economic viability as well as the societal and environmental impact of wind farms erected several miles out in Lake Michigan.

Boezaart said the offshore wind assessment project would also contribute to a greater understanding of the state and federal permits and regulatory requirements that will govern the future development of offshore utility-scale wind power generation in the Great Lakes.

The request for proposals was “basically an effort to find private partners who might be interested in participating in the project, not only with technology but also with private capital,” according to Boezaart.

Although the responses did not include an offer to invest in the project, they did indicate beliefs that the project as sketched out in the RFP would cost “probably in the neighborhood of $4 million,” according to Boezaart.

“But that’s a squishy number, though,” added Boezaart. “That’s not a number that is rock-solid, because it all depends on, do you do a floating or a fixed platform, a big or little platform?

“It’s kind of like, do we go forward with a Cadillac or a Chevy?” he said.

MAREC first proposed the offshore research platform a year ago. The deadline for responding to the MAREC RFP released in April was June 10.

Boezaart said that if there is no further capital forthcoming, “then we may have to scale back to the available dollars.” Last week he was planning more meetings with state and federal officials and “some private enterprise representatives.” He said MAREC has not yet ruled out the possibility of investment in the project by a private party.

“What we don’t have at this point is someone from the private sector stepping forward with check in hand saying, ‘Here we are. We want to play and here’s our contribution.’ So we’re probably going to have to tease that out somehow, from somebody,” he said.

Scandia Wind Offshore had been seeking public support of its rough proposals before it decides whether or not it will go ahead with its own research that would actually determine the viability of offshore wind farms in Lake Michigan.

At a public informational meeting in June in Grand Haven, a Scandia executive indicated the company will not ask the county boards in Muskegon and Ottawa for an advisory vote of support in general for the concept of offshore wind farms. It did so in Mason County, where the board of commissioners voted 9 to 1 against the visual impact of offshore wind farms there.

Boezaart said he understands that the type of offshore research that Scandia would have to do in Lake Michigan would take two to three years before the company was even able to decide whether or not to proceed with application for formal government permission to build a wind farm. The state of Michigan owns the Lake Michigan bottom that Scandia has been eyeing.

Boezaart said it is generally agreed that it will be “five, seven, 10 years before even Scandia could be out there.” However, he noted that both Michigan and Wisconsin state governments have indicated research should be done because of the growing pressure for alternative energy production — and Lake Michigan has what is believed to be very good wind generation potential.

According to MAREC, studies show that the wind velocity over Lake Michigan is in the range of 4 to 6 wind class, with 7 being the highest, and that use of a 10th of that potential wind power could equal the electricity output of some 20 nuclear power plant.

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