New power generation: Rural co-op makes bet on wind, solar hybrid

The electricity we use is often generated hundreds of miles away. Dan Juhl wants to keep it local.

The longtime energy developer is convinced that small, hybrid solar-and-wind projects are the future of electricity generation in rural areas. Much of the renewable electricity in the system now is generated by large wind farms or giant fields of solar panels. But Juhl envisions turning that approach on its head by creating dozens of small wind-and-solar sites that feed energy to consumers nearby.

"The time is coming. The technology is there. It's reliable, it's efficient,” said Juhl, who has for years been developing renewable energy in Minnesota. “We're not a bunch of wild-eyed hippies anymore. It's the real deal.”

His concept: Pair two wind turbines and an array of solar panels to generate electricity that flows into the local energy grid.

The ultimate test of whether the approach is sustainable is the cost of the electricity it produces — and Juhl is certain that small solar-and-wind sites scattered around the state can produce electricity that’s cheaper than current market rates.

To prove his theory, Juhl’s company — Juhl Energy — has built what he calls the first hybrid generating system in the country.

Making renewable local

To make this hybrid wind-and-solar approach work economically, Juhl first had to streamline the conversion process. Wind turbines and solar panels produce electricity differently, and that electricity must be converted before it can be sent to consumers. Juhl had to find a way to convert wind energy and solar energy into electricity through the same process.

So, he partnered with electric behemoth General Electric to build the technology that would route the energy generated from wind turbines and solar panels through the same power conversion process, cutting the cost of combining wind and solar power at a single location.

“We can produce and deliver clean power for less than the existing system,” Juhl said. He estimates the savings at about 2.5 cents per kilowatt-hour of electricity. The average residential price of a kilowatt-hour of electricity in Minnesota is about 14 cents.

The challenge, said Juhl, is convincing rural electric cooperatives that renewable energy can save them money.

Tim Thompson is convinced. He’s CEO of Pelican Rapids, Minn.-based Lake Region Electric Cooperative, which serves west-central Minnesota and is buying the electricity that’s being produced from the first Juhl Energy hybrid system.

Juhl’s single wind turbine and solar array hybrid near Rothsay, Minn., has only been operating since March, but Thompson said he expects his co-op will save about $150,000 annually because the electricity is cheaper than the market price the co-op pays for the rest of the electricity it uses.

"Any time we can produce renewable energy at the local level, [and] our members consume that locally, we can save them a little bit of money in the process,” Thompson said. “That's a perfect project for us."

The electricity generated here flows into an existing Lake Region Electric substation 3 miles away. The power stays local: It’s used by the roughly 1,200 customers in the 150 square miles served by the substation.

This $4.5 million project is smaller than what Juhl envisions as the ideal hybrid generation unit. The full system he’s designed would include solar panels combined with two wind turbines — double the amount at the Rothsay site.

A smaller scale for energy resilience

Renewable energy is often produced by massive wind farms or large fields of solar panels that generate electricity that’s transported onto the grid and used hundreds of miles away.

But the U.S. Energy Information Administration predicts significant growth in smaller, locally produced electricity, known as distributed power generation, in the next 30 years, as solar panels become less expensive to buy and install.

Juhl said the small distributed model of electrical generation makes the system more reliable — and resilient.

"If it's not windy or sunny here, it's probably windy or sunny [somewhere else],” he said. “And so a distributed model adds a much higher reliability to renewables than central station renewables.”

The idea is that many small power generation units spread the risk when compared with large facilities that focus generation in a single area.

"I mean, there's no fuel, no emissions, no waste, no water and no transmission costs,” Juhl said. “How can it not be economical to deliver power like that?"

Juhl envisions eventually adding battery storage in rural communities to help utilize the locally generated power.

A customer in co-ops

While Juhl sees reluctance among many rural electric cooperatives to embrace the hybrid model, Thompson has no reservations.

"As a member-owned cooperative, we really pay very close attention to what our members want and need,” Thompson said. “And the feedback from members is that they do want more renewable energy."

Does that mean Thompson expects to see more of these projects on the Lake Region Electric system? Probably not — at least not in the short term.

Lake Region Electric buys the bulk of the electricity it distributes to customers from Great River Energy, and — as is the case with most co-ops’ contracts with big power producers — its contract with Great River limits how much renewable electricity the cooperative can buy from other sources. This hybrid project with Juhl makes up about half the total allowed.

Great River Energy produces 58 percent of all the electricity it sells from coal, and 25 percent from renewable energy sources like wind or solar.

Most rural electric cooperatives are locked into long-term contracts that limit how much electricity they can buy from other sources. That would make expanding the hybrid model on a large scale fairly difficult.

But Juhl said he’s been getting more inquiries from members of electric cooperative boards since the Rothsay project went online — and he’s hopeful that soon, his vision for locally generated renewable energy will power more rural communities.