WI Pursues SheerWind; Co. Interested in Osceola
As Chaska-based renewable energy product developer SheerWind, Inc., is preparing to start building its first wind farm, it is aggressively being courted by Wisconsin officials who want it to bring its wind farms east of Minnesota borders.
SheerWind founder and CEO Daryoush Allaei told Twin Cities Business that Wisconsin has been much more aggressive than Minnesota in terms of luring the company with incentive packages.
SheerWind hopes to have about 20 wind farms-which will collectively produce about one gigawatt of energy-operational by 2016. One gigawatt can power between 240,000 and 300,000 homes annually, according to figures from the American Wind Energy Association. Allaei said that each wind farm will create about 450 jobs, half during construction and half to maintain operations after the farms are up and running.
Allaei said that some Minnesota cities, including Hutchinson and Mankato, have expressed some interest in the company but have not stepped up in the way that Osceola, Wisconsin, has in terms of incentives. If Allaei had to pick today, Osceola is where he'd build his company's wind farm operations.
“I love Minnesota,” Allaei said, adding that he has been involved in about seven start-up companies within the state. “But I have not seen much interest. It's all talk and no walk.” Allaei said that officials in Minnesota haven't actually put any offers or incentives on the table.
Allaei wouldn't go into details about the incentive package that the Village of Osceola has offered other than to say that it includes cash up front through low-interest loans and tax incentives, but he said that Wisconsin Governor Scott Walker has recently reached out to discuss the terms of possible incentives and to talk about other communities in the state that SheerWind might want to pursue. Allaei said that the fact that the state's “CEO” is reaching out speaks volumes about its interest level.
Allaei added that the renewable energy industry is fast moving, and he likes that Wisconsin is moving at “the same speed as the company”-something that he hasn't seen in Minnesota.
David Volz, spokesman for the Wisconsin Economic Development Corporation, said that regional staff members have been involved in meetings with SheerWind, but his agency does not release information about ongoing discussions with companies and incentives being offered.
SheerWind is developing and marketing the Invelox system, a wind-energy system that eliminates the need for tower-mounted turbines. Instead of tower-top propellers, funnels are placed at the top of a tower and capture wind. According to SheerWind, the funnels function like dams collecting water, directing wind flow through small openings that turn ground-based hydrokinetic generators.
According to the company, the Invelox system has many advantages over traditional turbine designs. In addition to being able to operate with lower wind speeds, which greatly increases the number of geographic regions suitable for harvesting wind, the towers for the Invelox system are shorter and smaller, thus requiring less acreage for a wind farm.
By the end of this year, the company will start selecting communities in which it will build wind farms; it will start construction on its first wind farm next year, as early as the second quarter.
According to Neil Soltis, administrator for the Village of Osceola, Osceola officials have met with SheerWind several times this year. They are pitching the community as attractive based on its local airport, focus on sustainable energy, and available space and employees.
“We felt [SheerWind was] appropriate because we were one of the first communities in Wisconsin to support the 25×25 plan,” Soltis said, referring to the state's mandate that requires that 25 percent of its energy come from renewable resources by 2025.
That mandate is similar to Minnesota's Renewable Energy Standard, which requires that electric utilities supply 12 percent of energy for Minnesota consumers from renewable sources by 2012, 20 percent by 2020, and 25 percent by 2025.
About 465 workers were displaced earlier this year when Medina-based Polaris Industries, Inc., decided to downsize its manufacturing plant in Osceola. Soltis said that those workers are eligible for extended job training through state programs, and SheerWind could request specific custom training for those workers to meet its work force needs-employees who can construct wind farms and those trained to maintain their operations. Since the training is provided through the state, SheerWind wouldn't have to pay to get the specific skill set it is looking for.
Allaei said that Osceola's focus and drive regarding renewable energy attracts him to the community because it illustrates that the village isn't strictly interested in the financial benefits of a partnership.
Although Wisconsin has been more aggressive in pursing SheerWind, there are signs that Minnesota would like to keep the company's operations in its home state.
When asked about SheerWind, Mark Lofthus-director of business and community development at the Minnesota Department of Employment and Economic Development (DEED)-said that DEED Commissioner Mark Phillips and other leaders met with the company in June.
Lofthus said the conversations that took place were confidential, but he did say that there are an undisclosed number of angel investors in Minnesota who have expressed interest in investing $145,000 in the company by end of the year.
Lofthus also noted that Minnesota has displaced worker programs that are similar to Wisconsin, where employees who have been laid off can receive customized training.
Although Mankato and Hutchinson officials have shown some interest in the company, and have made visits to its headquarters, no concrete offers have been made, Allaei said.
SheerWind, which has five employees and is hoping to close on $3 million in financing in the coming months, will likely expand at a rapid pace given its goal to have about $1 billion in revenue by 2020. The company was pre-revenue in 2010 and expects to start generating revenue in 2013 or 2014, Allaei said.