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Steel Winds project generates power, profit

The Steel Winds project has dramatically changed the appearance of the Lake Erie shoreline, along the former Bethlehem Steel site in Hamburg and Lackawanna.

Paul Gaynor, the chief executive officer of First Wind, the Massachusetts-based company that developed the 14-turbine wind farm in two phases, says a project like Steel Winds can generate as much power as a conventional plant that would burn more than 115,000 barrels of oil or use 32,000 tons of coal each year.

Gaynor was in town last week to mark the start-up of Steel Winds' second phase, which added six new windmills to the 14-turbine project that first began operating in 2007.

He spoke with The Buffalo News about the project and the future of the wind energy industry.

>Q: How pleased are you with how things have gone here?

A: We're very excited that it's finally up and running. You can see it now. The turbines are all spinning and working and generating power.

This is a relatively small project, but it was pretty hard to do because of a lot of factors. We're happy that it's finally done.

One of the things that we're very, very happy about is this industry is working. It's economic. It's providing a lot of jobs. It's great. This is just a little project, but we're happy it can happen right here in Lackawanna and Hamburg.

>Q: How much power has Steel Winds generated since it opened five years ago?

A: The first phase, to date, has generated about 185,000 megawatts.

>Q: What does that mean?

A: I'd say that's probably providing 7,000 homes on an annual basis over the last five years.

>Q: What capacity are you running at?

A: This site has a capacity factor in the low 30 percent range. It's probably running 90 percent of the year, or 90 percent of the actual hours of the year. If you look at it from what's the effective ratio to its capacity, it's probably in the low 30s, which is good.

It's a very competitive resource and we're providing power to the grid at what it costs natural gas and other fossil-drive fuels that generate on the grid. So it's competitive.

>Q: Is the project profitable?

A: It's absolutely profitable. It's been profitable from Day One.

>Q: How challenging was this project to build?

A: This is our 12th project. This is our 750th megawatt that we've put into operation. It is a relatively small project, but that doesn't mean it was easy. In fact, this was probably the most difficult six turbine, 15-megawatt project that we'll ever do.

It was a difficult site to permit. There were lots of challenges with the existing uses of the existing landowners. There were a lot of constraints around the landowners [Tecumseh Development, a subsidiary of ArcelorMittal, and Buffalo Crushed Stone] with what they wanted to do with the property, where we could put the turbines, where we could put the transmission and collection system.

Five of the six turbines are below the level of Lake Erie. We actually had to build them up so we didn't have floods in the bottoms of the turbines. That's typically not good.

There were a lot of grid interconnection challenges. Just getting the wind farm properly integrated into the grid took a lot of creativity and ingenuity. We didn't have to take those steps in the first phase because the infrastructure was already there. We had to make some modifications to that in order to make it happen.

There were a host of other issues that came up in the development of this little six-turbine project that made it very, very challenging. But it was all worth it in order to move the state and the country toward energy independence.

Every time those turbines are generating, it means that a coal plant or some other source of dirty, more expensive source of power is not operating. That's something to be very proud of, even with a little six-turbine project.

>Q: Politically, how challenging was this to get done?

A: Pretty difficult. There are six turbines. There are five individual tax abatement agreements. So it's complicated. There were a lot of people who had a stake in it and wanted to make sure their voices are heard. In the end, it got to a very constructive conclusion.

>Q: How many people will be working on the wind farm?

A: All told, it's probably going to be about 10 to 12. That's for both phases. That's our folks, as well as the folks who work for Clipper, which is the turbine manufacturer.

>Q: Is any more expansion possible here?

A: We've pretty much run out of real estate here on the waterfront. But we're looking at other sites in New York and will continue to do so.

>Q: By and large, do you think wind energy is viable?

A: Absolutely viable. There's no question that it's profitable. Yes, it does require a federal subsidy to make it happen, but I think so does every other source of energy that we currently use -- oil, natural gas and so forth. The nuclear industry is incredibly subsidized. When you make sure it's a level playing field, it's absolutely viable.

>Q: How important is the federal wind energy tax credit?

A: It's important, obviously. I'm hopeful that as wind becomes more and more competitive that, eventually, the wind energy won't need to rely on the tax credit. But that's probably three to five years away.

>Q: Is the uncertainty over the tax credit stalling the development of wind energy projects?

A: Absolutely. We're seeing companies making some pretty dramatic announcements concerning layoffs, mostly in the manufacturing sector because they're on the leading edge of this. We're hopeful that will get passed eventually.

One of the things that's a little frustrating is that there is support for this industry, notwithstanding everything you're hearing from Congress. There is bipartisan support.