Wednesday, January 9, 2008

Earning $152,878, leasing for $4,000

$152,878 is a conservative estimate of revenue from a large wind turbine on South Dakota ag land. Land owners are being told to accept $4,000 per turbine in a wind lease or their land will be isolated from development.

Sadly, producers have a lot of experience with selling their crops and livestock for poverty-level profits; once again they face marketing a new commodity without knowing its value.

With every hour "superb" wind speed (faster than 24 mph), a 1.5 MW can generate up to 3,195 kW. A South Dakota land owner isn't paid "fair market value" because s/he doesn't yet have "aerinomics" information. S/he has more agronomics information than s/he "can shake a stick at" on other ag practices, but not aerinomics on wind farming.

Utility companies are "cherry picking" some of the nation's fourth-best wind power from land owners from a position of knowing they can

  • sell- at a premium- wind power as "green power" or "blue skies" power and/or
  • sell it as plain ol' power to consumers where rates are 11¢ and even 14¢ kWh.
Larger businesses have, since the dawn of time, "cherry picked" from the low to sell high, so wind farming is just the next "it's only business."