Big Stone II Down? Quit Whining, Build Wind!

You can almost hear the tears trickling from the front page of tonight's Madison Daily Leader. Otter Tail took the route Warren Buffet did with six other coal plants in 2007 and bailed out of the Big Stone II coal-fired power plant. But hey, what do Warren Buffet and Otter Tail know? Big Stone II is a great project! Really! Come invest! Pleeeeaaaase!

Such is the mission Heartland sends Russell Olson out to conduct in tonight's paper. I do not envy Russ his job. Your lead investor, a reputable Minnesota utility company, backs out, and you have to convince other smaller players that they should jump in? It'll take more than a few conference calls to make that magic happen.

But you know, there is an alternative. Instead of crying over not getting a big coal plant, how about the partner utilities redirect their efforts to building more wind power? That's what Otter Tail is doing: they have added 180 megawatts of wind power in the last three years. At that rate, they could have another 360 megawatts of wind power by 2015. Big Stone II wouldn't switch on until 2015, and Otter Tail planned to take only a 250-megawatt share of that coal power.

Oh, but wind is more expensive to build, right? Again, let's check the numbers. The Leader says Big Stone II would cost $1.6 billion and generate up to 600 megawatts of electricity. (We won't delve too far into analyzing that cost estimate, though it has been noted that the five Big Stone II backers have consistently underestimated costs, including environmental costs.) Let's see... $1.6B, 600MW, divide, carry the 2... $2.7 million per megawatt.

Flip back to Thursday's MDL and Madville Times. East River is part of Basin Electric's Groton wind farm project. They'll add 99 megawatts to their portfolio for $250 million. More long division... $2.5 million per megawatt. And no coal trains. No coal ash waste. No mercury in our walleyes. Just windmills.

I welcome the energy industry experts among my readers to flesh out my oversimplified calculations. But wind turbines appear to be the cheaper, easier option: wind mills face fewer regulatory obstacles, they pose no carbon risk, and they have a shorter construction cycle—and that's not me, that's Otter Tail CEO Chuck MacFarlane saying so!

I haven't seen what Heartland's planned investment in Big Stone II is, but they plan to get a 25-megawatt share of the plant's output. So let's assume their share of the cost is proportional, say, $67 million. If I have $67 million to invest in power generation, I could run around all year trying to find big partners to help me build a really big coal plant that might start cranking out power six years from now. Or I could partner with Iberdrola or NextEra and build 25 megawatts' worth of windmills that would be generating power and revenue next year.

Whether your favorite green is hippie or dollar, this one's a no-brainer: forget Big Stone II! Build windmills now!