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From Brownfield to Greenfield: Ex-Mine Hosts Vermont’s Biggest Solar Array

  • A group takes in the site of a new solar array during a ribbon cutting ceremony on Friday, Sept. 22, 2017, at Elizabeth Mine in Strafford, Vt. The solar array takes up 27 acres and will harness enough energy to power 1,250 homes. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Vermont Representative Timothy Briglin, left, holds a poster as Dori Wolfe, a former Strafford, Vt., resident living in Houston, Texas, talks about a new solar array during its ribbon cutting ceremony on Friday, Sept. 22, 2017, at Elizabeth Mine in Strafford, Vt. Wolfe helped bring the solar array to the former mining site. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • A solar panel during a ribbon cutting ceremony for a new solar array on Friday, Sept. 22, 2017, at the Elizabeth Mine site in Strafford, Vt. The solar array takes up 27 acres and straddles Thetford and Strafford. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • David Fisk, left, of Post Mills, Vt., and Bill Bridge, of North Thetford, Vt., talk about the former mining operation at Elizabeth Mine during a ribbon cutting for a new solar array on Friday, Sept. 22, 2017, at the site in Strafford, Vt. Bridge said that he was familiar with the Elizabeth Mine site and that he rode his bike to the ribbon cutting because he supports solar. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • A group walks to get a closer look at a solar array site after its ribbon cutting ceremony on Friday, Sept. 22, 2017, at Elizabeth Mine in Strafford, Vt. The energy harnessed from the array will be enough to power 1,250 homes. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • during a ribbon cutting for a solar array on Friday, Sept. 22, 2017, at Elizabeth Mine in Strafford, Vt. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.



Valley News Business Writer
Sunday, October 08, 2017

South Strafford — Appropriately enough, the midday sun was shining on a recent Friday in South Strafford, where a few dozen people had gathered at the periphery of the bowl-shaped Elizabeth Mine property. As they looked upon a sea of nearly 20,000 glistening black solar panels covering the now-abandoned mine, it was a gratifying moment.

Elizabeth Mine, whose excavations left a moonscape of waste rock and tailings that leached orange effluent into nearby streams, is a “brownfield” that has been transformed into a “greenfield” that will generate 5 megawatts of electricity — enough to power about 1,200 Vermont homes annually — for decades to come, according to its promoters.

Joined by contractors, government officials, business executives, project consultants and a smattering of curious town residents, Dori Wolfe, an energy consultant and Strafford resident who championed the $18 million solar project, stood in front of the crowd and extolled the mine site’s rebirth.

“It takes a whole community, a state, to build a solar field on a Superfund site,” Wolfe said. “This mine over the years has given so much to Strafford and Thetford and the state, and now (it will bring) a new tax base to the communities and state in a clean, renewable way.”

Although it took, or at least involved, a village to build the array, it more notably also took the likes of a Greenwich, Conn., private equity firm, a Minneapolis financial giant, a Spanish bank, and a Bermuda-registered conglomerate with roots in Greek shipping to make it happen.

How a small town in Vermont ended up becoming the site of the state’s biggest solar array illustrates how sophisticated outside investors are moving to take advantage of the push toward renewable energy. It also highlights how the development of green energy requires trade-offs, both in terms of costs — generally higher — and in terms of selling off the renewable energy credits that otherwise would count toward meeting the state’s self-imposed renewable energy mandate.

Solar Spreading

Solar panels and arrays seem to be popping up everywhere in Vermont — on home and barn rooftops, atop commercial buildings, and in fields and landfills — as the state’s electric distribution utilities are required to have 55 percent of all their electric sales come from renewable sources in 2017 on the way to 90 percent by 2050.

Although by last year 45 percent of the electricity generated in the state already came from renewable sources — much of it from Hydro-Quebec — only 8 percent of the state’s total was attributable to solar, according to the U.S. Energy Information Agency. Nevertheless, Vermont ranked eighth highest among states when measured on a per capita basis (watts produced per person), according to a 2016 report by the Solar Industries Association.

Vermont had a total of about 169 megawatts of solar capacity. For perspective, the state lost 620 MW of electricity-generating capacity in 2014 when the Vermont Yankee nuclear plant shut down.

When the Elizabeth Mine solar array is turned on later this month — engineers are currently testing the system — it will feed electricity into power lines of Green Mountain Power, which has entered into a 30-year “power purchase agreement” with the array’s owner, Greenwood Energy.

A Copper Mine’s Legacy

Elizabeth Mine is named after Elizabeth D. Tyson, the wife of James W. Tyson, who acquired the property near Mine Road in South Strafford in the 1880s. Iron sulfate deposits were first discovered east of the village in 1793. What was to become Elizabeth Mine operated there from the early 1800s until closing in 1958.

During the 19th and 20th centuries the mine produced nearly 50,000 tons of copper and comprised a mini-city of structures and facilities spread across the 250-acre site, which straddles the Strafford-Thetford town line. It included “roast beds” that prepared the ore for the smelting furnaces, railway trestles, a 125-foot-tall brick chimney, a flotation mill and office buildings — employing more than 200 workers at its peak, according to a history of the site commissioned by the Environmental Protection Agency.

But nearly 150 years of mining left the area ecologically blighted from waste rock and mine tailings that contain sulfide minerals and led to acidic and metal-laden runoff into ground and surface water. In 2001 the EPA designated the mine a “Superfund” site for cleanup that entailed, among other things, buttressing the tailings pile from collapsing, digging trenches to divert water around the contamination, building a filtration system and installing a 45-acre cap over the tailings debris.

The 14-year remediation project cost the federal government $70 million, according to Ed Hathaway, remedial project manager for the EPA. The question for the towns and property owners, the Cook and the Zagaeski families, was what to do with the land.

Stanley Parker, a Quechee resident and a member of the Cook family, said the family had weighed numerous options over the years, which he declined to detail. The family ultimately decided constructing a solar array “was for the greater good of the land and community.”

Said the EPA’s Hathaway: “Our primary job is to protect human health and the environment. But then when you can see it flip to positive value where it can be reused, create jobs, contribute to the tax base and defer maintenance costs for the state, that kind of beneficial reuse is the most we can hope for.”

Origin of an Idea

Converting Elizabeth Mine into a solar field began when former Strafford Selectboard member Steve Willbanks asked the town’s energy committee in 2010 if such a project would be possible, recalled Wolfe, who sat on the committee. Wolfe, an electrical engineer, at the time was a principal in the White River Junction solar firm groSolar and formed the consulting firm Wolfe Energy.

A 2011 “pre-pre-feasibility” study undertaken by a student at Dartmouth’s Thayer School of Engineering concluded the project would not be feasible because the community’s electrical infrastructure lacked the proper “interconnections” to handle the higher load generated by the array. That wasn’t the can-do answer she had hoped for, said Wolfe, who recently moved to Houston with her husband, Jeff Wolfe, although they still keep a residence in Strafford.

“I corrected it to say it could be possible only if the interconnections are available,” Wolfe said, which would require upgrading the power lines from the mine to GMP’s Sharon substation 10 miles away.

A subsequent 2012 “pre-feasibility analysis” estimated that building a 5 MW solar array would cost $14 million, including $2 million for the grid interconnections and $1 million in pre-construction development costs. The estimate turned out to be $4 million short. (Technically, the capacity of the array is 4.99 MW, which keeps it under the 5 MW threshold at which it becomes subject to certain requirements of ISO New England, the region’s grid operator.)

The analysis advised that the “only way to construct” the array “would be through a power purchase agreement” with GMP that would ensure a steady, long-term customer to provide the income to repay investors.

Enter Corporate Players

Explaining she needed an “expert in building on a Superfund site,” Wolfe, through her solar industry contacts, reached out to Brightfields Development, of Wellesley, Mass., an engineering firm that specializes in building solar arrays on landfills and brownfields and negotiating the labyrinthian permitting process.

Among the techniques Brightfields adopts for such sites is to anchor the solar arrays on concrete “ballasts” because they cannot be secured by dropping pylons into the ground, which would puncture the cap covering the tailings.

Still, co-developers Wolfe and Brightfields did not have the financial capital on their own to build and operate a 27-acre solar array, so they partnered with Greenwood Energy, a Boston and New York company that owns and operates commercial solar installations in the U.S. and Panama. Greenwood Energy, in turn, is owned by Libra Holdings, a Bermuda-registered conglomerate whose origins trace to a privately owned Greek shipping line controlled by the London and New York-based Logothetis family.

Greenwood bought out developers Wolfe and Brightfields and now owns 100 percent of Elizabeth Mine Solar I LCC, the legal entity of the operation. According to a sheet addressing “frequently asked questions” that Wolfe prepared for the public as background material about the project, “the developers, including Wolfe Energy, will earn a percentage when they bring the project to fruition.”

Wolfe declined to say how much she earned, saying that was a private business matter, but she noted that “up until we found a partner, found financing, I did this for six years without pay.”

Greenwood Energy, in turn, obtained the financing it needed to build the project from three sources: Greenwich, Conn.-based Fortress Investment Group, a private equity firm; a unit of Spain’s Banco Santander that provided a short-term “construction loan,” and Minneapolis-based US Bancorp, through which Greenwood had arranged a $52.8 million “tax equity and debt financing” package to cover six solar power projects it was building in three states, including the Elizabeth Mine.

One of the selling points made by the developers when pitching the solar array to the Strafford Selectboard was that the project would stimulate the regional economy by spending more than $4 million on local construction jobs and professional fees and rentals, according to presentation documents used at community meetings.

Vermont firms that were contracted to work on the project included Weston & Sampson, of Waterbury, which was hired to monitor construction (it had installed the tailings cap), Northwoods Excavating, of Thetford Center, to lay the ballasts and erect the racking to hold the South Korean-made solar panels, and Peck Electric of South Burlington as the contractor to wire the panels and perform other electrical work.

Conti Solar, of Worcester, Mass, installed the solar panels on the racks.

A total of 2,222 concrete ballasts, each weighing up to 1,650 pounds, were trucked to the site, said William Bushnell, who oversaw construction for Greenwood Energy.

Long-Term Investment Return

Of the $18 million project cost, Greenwood spent about $2.7 million to upgrade six of the 10 miles of power lines needed to take the power to the Sharon substation. Offsetting the total development cost, Greenwood received about $6 million in federal investment tax credits that it can keep or sell to lower tax liabilities, according to company executives, lowering the net cost to $12 million. Such tax credits were originally authorized by Congress in 2005 to spur solar development and have been extended several times since.

Ten months before construction of the array began in April, 2017, Greenwood and Brightfields hammered out the key component in making the project financially viable by negotiating a “power purchase agreement” with GMP. The 30-year contract calls for the utility to pay 14.9 cents per kilowatt hour to Greenwood for the first 25 years, which then drops to 10 cents per kWh for the final five years.

Based upon the solar array’s expected annual output of 8,675,000 kWh, Elizabeth Mine Solar will receive about $1.3 million annually from GMP. The array is expected to operate for at least 30 years, at which point it will still be able to generate power but at a reduced capacity, although it could be extended if the panels are replaced. After factoring in the cost of financing, operations and maintenance, and taxes it could take as long as 20 years before the solar array is profitable, said a Greenwood Energy executive.

Finally, as part of obtaining a certificate of public good from the state’s Public Utility Commission, Greenwood Energy had to submit a $435,000 letter of credit for the establishment of a “decommissioning fund” to ensure money is available when the array stops operating and the facility is disassembled.

Premium for Solar

But the electricity that will be generated at the Elizabeth Mine won’t be cheap.

The 14.9 cents per kWh price compares with the 4 cents to 8 cents per kWh range that GMP pays for electricity from such other sources as Hydro-Quebec, power from the Seabrook and Millstone nuclear plants, or wind from Kingdom Community Wind in Lowell, Vt., Granite Community Wind in New Hampshire and Deerfield Wind Farm in southern Vermont, according to information provided by the utility.

“That is a very high number,” said Willem Post, a retired power plant designer and skeptic of solar power who lives in Woodstock and writes about utility industry economics. “The annual average wholesale price of New England electricity is 5 cents per hour. At night it may be 3 cents. At midday, it may be about 6 cents.”

Wholesale electricity prices are immensely complex, according to industry executives, and are influenced by myriad factors, including the age and efficiency of the generation source.

“If you go to New Mexico or Arizona or Southern California, solar projects of this size and larger might cost 4 cents or 5 cents per kilowatt hour,” said Mark Bolinger, a research scientist in the Electricity Markets and Policy Group at Lawrence Berkeley National Laboratory, who lives in Lyme and studies the wholesale cost of electricity nationally.

The limited amount of sunlight New England receives is one factor driving up the wholesale cost of solar power in the region, according to Bolinger. In addition, there are the special challenges in building on a capped brownfield site that drive up a project’s cost.

“Vermont may never get to that level, at least in the next five years,” Bolinger said, referring to the wholesale prices in the Southwest and West.

Fitting Into the Grid

GMP says the cost of the electricity produced at the mine is actually lower than 14.9 cents per kWh after it sells the renewable energy credits, commonly referred to as RECs, to power producers in other states that can buy them to meet their own state’s renewable energy mandates.

The RECs will likely shave about 3 cents per kWh off the cost, lowering it to about 12 cents per kWh, according to GMP spokeswoman Kristin Carlson. Moreover, GMP is locking in a long-term fixed rate for the wholesale cost of electricity that will not be subject to swings in market prices and future inflation.

“Each of these sources provides a different role in our overall (energy) portfolio, i.e., time of production differences, inclusion of capacity to a varying degree, renewable, etc., and it is very difficult to compare them this way on pure cost without leaving important dynamics out,” Carlson wrote in an email.

Furthermore, Carlson said, the 14.9 cents per kWh cost “falls in the middle of cost range of solar projects that have come online in the last few years.” And it is unlikely to have much impact on rates consumers pay since Elizabeth Mine solar power represents a tiny percentage of the utility’s power portfolio.

Price of Benefits

And then there are the environmental benefits.

The more than 8 million kWh of “clean” electricity the array will generate each year will “offset” 6,000 tons of carbon dioxide, a chief contributor to global warming — “equal to the emissions of 14,000 barrels of oil” and amounting to “the carbon sequestration from almost 5,000 acres of forest,” according to Brightfields Development, the project’s co-developer.

More concretely and closer to home, with the site now in use by a for-profit business, Strafford and Thetford each will receive about $10,000 to $30,000 annually in tax revenue, the state will receive about $20,000 annually in taxes, and the Vermont Department of Natural Resources will receive about $25,000 toward maintenance of the site following the environmental cleanup, according to the PUC.

Those add up to hundreds of thousands of dollars over the course of the solar array’s lifetime.

And, importantly, nearly 10 miles of GMP power lines in the Stafford-Sharon corridor were upgraded — GMP improved four miles of power lines — a move that addresses both the array’s need for higher capacity lines and longstanding reliability issues in the area.

Still, the renewable energy credits associated with the Elizabeth Mine that would normally be applied to meet Vermont’s mandate for renewables will in fact be sold to out-of-state utilities to help them meet their own states’ renewable energy requirements. Not until late 2024 will the credits begin coming back to Vermont and not until 2027 will they fully return.

“Solar power from Elizabeth Mine is great, but that’s not the point,” said Kevin Jones, director of the Institute for Energy and the Environment at Vermont Law School and critic of the so-called RECs market. “The point is that it’s not reducing Vermont’s carbon footprint and not helping Vermont meet its renewable energy goals.”

At one point the issue was so contentious that the Strafford Selectboard withdrew its support for the project and GMP agreed to ameliorate the situation by agreeing to a phase-out plan.

GMP counters that all the RECs will eventually return to Vermont and further argues that their sale is necessary to make the purchase of electricity from the solar array economically viable. GMP notes that sales of RECs are expected to yield the utility $600,000 in revenue in 2017, resulting in lower electricity rates for consumers. The utility is already expected in 2017 to exceed by 5 percent the state’s current mandate for reneweable energy.

The cost of the project, and the cost of the electricity generated by it, may not be a bargain, but the cost of providing “green” energy is not a low-cost proposition, point out the Elizabeth Mine solar project’s participants.

“Everyone likes to use electricity,” said Jonathan Cole, managing director of Greenwood Energy. “But that means new generating facilities need to be built. If Vermont is going to generate its own electricity, then this project at this site is the type of generating facility that should be getting built.”

John Lippman can be reached at jlippman@vnews.com.