Oil and Wind Energy: North
Dakota Update
Dr. Cole Gustafson
Feb. 9, 2011
North Dakota Production
Courtesy: Neset Consulting
• July 2010 – 321,042 BOPD
• July 2010 – 320,371 MCF/D
• 5,051 Producing Wells
Courtesy: Neset Consulting
Williston Basin Deposition - ND
Courtesy: Neset Consulting
Relative Thickness
Courtesy: Neset Consulting
ND Bakken and Three Forks
Drillpipe
Non-magnetic
Drill Collar
Bent Sub
Mud Motor
Courtesy: Neset Consulting
Mud Motors
Rotating
Sub
Paving $1,000,000 / mile
Road Repair
Graveling
$3600 /mile
Courtesy: Neset Consulting
Rebuild Gravel Road
$300,000/mile
Farm Windmill--Aermotor
Overall Diameter
Incl. Hub: 252 ft
262 ft
242 ft
Wind Generation in North
Dakota
Operational:
– Turbines
– Rated Capacity
770
1223 Mw
Under Construction:
– Rated Capacity
76 Mw
Planned:
– Rated Capacity
6684 Mw
Power
Locati
Capacity
on
(MW)
Units
Cedar Hills Wind
Facility
19.5
13
GE
MDU Utilities
Energy
Ashtabula II
67.5
45
GE
NextEra Energy NextEra Energy Minnkota Power
Energy Resources
Resources
Cooperative
2009
Luverne
49.5
33
GE
NextEra Energy Otter Tail Power Otter Tail Power
Energy Resoureces
Co.
Co.
2009
4.5
3
GE
Basin Electric
Energy
Prairie Winds
ND 1
Basin Electric
2009
Prairie Winds ND I
115.5
77
GE
Basin Electric
Energy
Basin Electric
Basin Electric
2009
Rugby
149.1
71Suzlon
Iberdrola
Renewables
Missouri River
Energy Services
2009
Name
Prairie Winds Minot
Wind 2
Turbine
Mfr.
Developer
Iberdrola
Renewables
Owner
MDU Utilities
Power Purchaser
MDU Utilities
Year
Online
2010
Wilton Wind Energy
Center II
49.5
33
GE
NextEra Energy NextEra Energy
Basin Electric
Energy Resources
Resources
2009
Ashtabula II
52.5
35
GE
NextEra Energy NextEra Energy
Energy
2009
148.5
99
GE
NextEra Energy NextEra Energy
Energy Resources
Resources
2008
48
32
GE
NextEra Energy Otter Tail Power Otter Tail Power
Energy Resources
Co.
Co.
2008
Ashtabula - NextEra
Ashtabula - Otter Tail
Power Generation Capacity
in North Dakota
Megawatts
Wind
Hydro-Electric
Coal-Fired
Total
Percent
1223
515
4071
21
9
70
5809
100
Some “Back-of-the-Envelope” Numbers…
Rough Cost at 39% Capacity Factor: ¢/kWh
Capital Cost ($2.2Million/MW, 6%, 23 yrs):
5.2 ¢/kWh
Land Lease:
0.1 ¢/kWh
O&M / Insurance:
0.9 ¢/kWh
Property Taxes:
0.2 ¢/kWh
Total Estimated Cost:
Less Offsets…
– Production Tax Credit
or 30% Treasury Grant
– Accelerated Depreciation
– Renewable Energy Credit Sales
6.4 ¢/kWh
Net Cost After
Tax -- Less
than 4¢/kWh
Local Economic Impacts - Langdon
106 1.5mw towers
$500 million investment, $1 million lease
payments, $456,000 local tax payments
Met tower (2004), FPL (2006)
Wind - Local Government Issues
Large Wind – Infrastructure, labor, housing
community services
Small Wind – Zoning, siting, setback,
inspections, complaints, decommissioning
Taxation/investment
Purchasing – How much?
Generation – Where? Size? Own/Contr.?
www.ndsu.edu/energy
Common Landowners Questions on Wind Lease
Contracts
Basics of Farm/Residential Small Wind Turbines
Wind Energy Development: Key Financial
Considerations
Managing Your Expectations - Sizing a Small Wind
Turbine To Your Land
Understanding Wind Energy Leases
Public Involvement and Land Issues Relating to Wind
Projects
Questions?
Cole.gustafson@ndsu.edu
701-231-7096
Investment & Risk Comparison
Project Developer
•Transmission Risk
•2-3 years wind studies
•Engineering $$$
•Permitting Risk
•Operating Risk
•Market Risk
•Tax Risk
Cost: $3-5 Million/turbine
Landowner
¼ to ½ acre of
land per turbine
Revenue:
$4-$6000/turbine/yr
Wind will displace the
system’s highest cost fuel
Gas is a likely partner
for wind energy
Fuel Cost of Electricity…
Power Curve:
Generation vs Wind Speed
Reaches Rated Capacity
at 26 - 31 MPH
56 - 62 MPH
Cutout
6 - 8 MPH
Cut-in
1475 kW @ 26 MPH
250 kW @ 13 MPH