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Meeting Payment Obligations in Wind Projects

In recent years there has been a dramatic increase in wind power.

The American Wind Energy Association reports that the wind industry has added 35 percent of all new electric generating capacity in the U.S. over the past five years, second only to natural gas. The increased capacity of wind is more than added nuclear and coal capacity combined

During the first three quarters of 2012, 4,728 megawatts (MW) of wind capacity was installed, bringing total U.S. capacity to 51,630 MW. Today, there are more than 40,000 wind turbines in the U.S. Canada is aggressively increasing its wind capacity. In its July-August 2012 issue, Renewable Wind Energy reported installations in Canada nearly doubled in 2011 from the previous year to 1,267 MW.Today, more than 1 million homes in Canada are powered by electricity provided through wind. The Canadian Wind Energy Association, though, says the U.S. northern neighbor has only scratched the surface of its wind potential.

It appears Canada is well on its way to achieving the national goal of 20 percent of electricity from wind by 2025.

While it is easy to see and be impressed with the results, it is no simple task to develop and operate a wind farm. That requires a great deal of upfront planning, management of the project during construction, and ongoing tracking of payments and other operational tasks.

Wind industry officials tell our staff here at geoAMPS that their number one pain point in developing and operating wind farms is meeting ongoing payment obligations. Absent a good strategy and the right technology, these companies struggle with their payment obligations.

Consider the process of developing a wind farm. Once a suitable location is determined, both in terms of availability of wind and proximity to transmission lines, the company must acquire the necessary right of way. Contracts and lease agreements must be finalized. Permits must be obtained. The electricity anticipated from the wind farm must be sold. A great deal of effort is expended in the development phase even before construction begins. After the wind farm is built and operating, the company must ensure ongoing lease and royalty payments are issued accurately and on schedule.

Meeting all of these payment obligations, throughout the stages of developing, constructing and managing a wind farm, can be incredibly complex. Property ownership can change. The property owner might change addresses. Absent an established format for landowner information, there can be differences in how that information is presented in the wind company’s database. 

Missing payments or issuing an incorrect amount can disrupt the wind farm project. It can create ill will with landowners and contractors. Not having the proper strategy and tools for proper management of ongoing payment obligations can slow a wind project down or bring it to a grinding halt.

Wind energy companies employ various means to meet ongoing payment obligations. Many work off of spreadsheets where information can be erroneous or inconsistent. Others work from computer calendars. Some even work from paper. In these systems, information must be input manually. Emails with supervisors or payment administrators must be exchanged. It’s a clunky, inefficient process that is slow and wrought with the possibility of error.

Technology developed by geoAMPS makes it possible to manage and conduct ongoing payment obligations through one cohesive software system. All landowner and payment information is brought into the software, and the system manages the necessary ongoing payments automatically.Tasks related to lease management and royalty payments that once took two weeks to complete can now be accomplished in minutes.

Part of the geoAMPS product line, altAMPS is tailored for wind energy projects. It offers efficiency in the maintenance and operations of existing alternative energy infrastructure. altAMPS is a comprehensive solution for end-to-end management of alternative energy projects. Best of all, it is paperless.altAMPS is filled with time-saving tools such as lease management, met tower management, royalty payment calculator, bulk update, auto reminders, payment tracker and scheduler, workflow and import-export capabilities. Its robust, configurable framework provides compressed sequence time and complies with each wind energy company’s unique project needs. With altAMPS, companies can realize process efficiency, error elimination and measured cost savings.

With wind energy capacity growing dramatically, the need for efficiency in managing and operating wind farms will only increase. Conducting ongoing payment obligations is an aspect of doing business that will  increase, too, as the number of wind farms grow.

Meeting those obligations is major pain point in the industry today. With the right technology, however, it does not have to be.

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