Company Overview

Wind Energy America Inc. (OTCBB: WNEA) develops and operates wind energy projects in the Great Plains and the Midwest, regions known for their high quality wind energy resources. The Company owns interests in three wind farms: Shaokatan Hills LLC, Lakota Ridge LLC and CHI Energy. At present, WNEA owns a developer's stake and a minimal interest producing negligible cash flow in these wind farms.  Over the next two years the developer’s stake will begin producing significant cash flow from these projects.  The three wind farms together contain 79 modern wind turbines and have a total rated capacity of 53.5 megawatts (MW). They are collectively generating approximately 160 million kilowatt hours (kWh) of electricity annually. In addition to these properties, the Company owns  a 3 percent equity interest in Averill Wind LLC, a 10 MW wind farm being developed near Fargo, N.D., another region favorable for wind power energy.

During 2008, WNEA acquired wind power assets owned by Boreal Energy Inc. which include property and development rights to numerous wind farm projects in the upper Midwest and Great Plains, including Iowa, Minnesota, North and South Dakota, Montana, Wisconsin and southern Ontario, Canada. Through this acquisition, WNEA gained ownership interests in development stage wind energy projects representing approximately 1,200 MW of additional generating capacity. These projects are located in areas of North America well-suited for wind turbine installations.

Investment Highlights

Robust demand for wind energy

The U.S. Department of Energy predicts 71 percent growth in world energy consumption between 2005 and 2030. High oil prices and concerns regarding greenhouse gas emissions have created strong interest in clean energy. Wind power is one of the least expensive, most easily deployed energy sources.  According to the Global Wind Energy Council, cumulative capacity of wind energy installations will reach 149.5 GW by the end of this decade, more than double present installed capacity. According to Clean Edge research, the wind energy market will grow from $11.8 billion in 2005 to $51.1 billion by 2015.

Tax incentives encourage wind energy deployment

Federal authorities are encouraging new wind energy installations through a 2 cent per kWh Production Tax Credit (PTC) on electricity generated from renewable energy resources, including wind, biomass, geothermal and hydropower. The PTC system was renewed in 2007 and again in April 2008 when the U.S. Senate overwhelmingly approved an amendment to the Clean Energy Stimulus Act providing for a one-year extension of the Production Tax Credit. The credit can be claimed for 10 years.

Business model based on promising wind energy projects

WNEA is building a large portfolio of wind farm assets in areas known to have favorable wind conditions, demand for renewable energy generation capacity, the political will to support wind energy development, and existing or anticipated attractive pricing for wind energy.  The Company is concentrating its wind energy asset acquisition and development efforts in North America’s upper Great Plains and Midwest and has projects in Minnesota, Iowa and the Dakotas.

Installed wind energy capacity exceeding 120 MW

The Company’s wind farms, Shaokatan Hills, Lakota Ridge and CHI Energy, in Buffalo Ridge, Minn., contain 79 modern Vestas and Micon wind turbines representing a rated capacity of 53.5 MW. These farms collectively produce 165 million kWh of electricity annually. In 2010, WNEA’s ownership interest in Lakota Ridge and Shaokatan increases to 80 percent; its interest in CHI Energy rises to 30 percent for five years before increasing  to 49 percent.

The Company is also developing the 10 MW Averill project, scheduled for completion and generation of electricity in the first half of 2008. This project is located in Minnesota near Fargo/Moorhead, N.D.

In February 2008, the Company acquired significant wind energy assets from Boreal Energy, including approximately 40MW of wind energy projects in various pre-construction stages of development.

Boreal Energy acquisition provides WNEA with 1,200 MW project pipeline

As a result of the Boreal Energy acquisition, WNEA’s asset base has expanded to include:

• Development rights to numerous wind farm projects in the upper Midwest and Great Plains regions, including Iowa, Minnesota, North and South Dakota, Montana, Wisconsin and southern Ontario, Canada;
• rights to an extensive 1,200 MW pipeline of wind energy projects in development; and
• 15 percent economic interest in Navitas Energy Inc., a Minneapolis-based wind farm developer that is majority-owned by Gamesa SA, one of the world’s largest manufacturers of wind turbines.

Near-term revenues result from capacity expansion program

The Company plans to expand generating capacity of its acquired Boreal Energy assets by an additional 280 MW and achieve a total installed capacity of 400 MW over the next four years. Based on current wind energy prices, this should allow the Company to reach $80 million in sales by fiscal year-end 2012. On $80 million in sales, annual income could exceed $40 million to $45 million. To achieve its targeted capacity expansion, WNEA estimates it must raise approximately $69 million in external funding.

Business Model

The Company develops and operates wind energy assets. At present, WNEA owns interests in three wind farms in Buffalo Bridge, Minn., (Shaokatan Hills, Lakota Ridge and CHI Energy) which are owned by LLCs. In 2010, the Company’s ownership interest in Lakota Ridge and Shaokatan Hills increases to 80 percent and its stake in CHI Energy increases to 30 percent.  These wind farms contain 79 Vestas and Micon wind turbines and have a rated capacity of 53.5 MW. In recent years, these projects have collectively produced approximately 165 million kWh of electricity annually.

The Company is also developing the Averill project. The 10 MW Averill project is in late development stage and is expected to come online in 2008. The project is expected to generate a 17 percent annual return. 

In February 2008, WNEA acquired other wind energy assets from Boreal Energy which include:

• A 15 percent equity interest in Navitas Energy Inc., a Minneapolis-based wind farm developer. Navitas is majority-owned by Gamesa SA, a leading global wind turbine manufacturer. Gamesa holds a 15 percent share of the world wind turbine market.

• Development rights to multiple wind farm projects in the upper Midwest and Great Plains and an extensive 1,200 MW pipeline of wind energy projects in development.

WNEA will generate revenues from the sale of electricity and from federal Production Tax Credits, which provide a 2 cent per kWh tax credit on electricity generated from renewable sources for 10 years. 

Corporate strategy

The Company’s business strategy focuses on building a diversified portfolio of wind farm assets, while generating cash flow that can be used to construct or acquire new capacity. WNEA focuses on U.S. markets known for favorable wind conditions, increasing demand for renewable energy generation capacity, the political will to support wind energy development, and existing or expected attractive wind energy pricing.  The Company plans to diversify geographically so as to limit its exposure to risks associated with local weather conditions and regulations. At present, WNEA is concentrating its acquisition and development activities in the upper Great Plains and Midwest, including Minnesota, Iowa and the Dakotas.

The Company acquires and/or develops wind farms based on the following criteria:

• Superior wind resources to justify a commercial wind energy facility;
• Availability and access to transmission grid;
• Permitting and zoning policies that allow wind farm development;
• Satisfactory environmental and archaeological studies;
• Satisfactory terrain and geographic features;
• Regional support of renewable energy;
• Local politics promote the wind power development;
• Growing demand for electricity;
• Adequate incentives at the federal and state levels; and
• Attractive electricity prices.

Over the next 12 months, the Company’s primary focus will be completing the development of wind farm projects acquired from Boreal Energy. WNEA employs its own consultants as well as third-party consultants who are experienced in assessing wind resources and completing wind farm projects.  The Company also plans to establish close partnerships with local outsourcing partners who can assist WNEA in accessing wind energy project opportunities and who provide good quality technical, engineering and construction resources.

Wind Energy Projects

The Company owns interests in the following projects:

Shaokatan Hills

Shaokatan Hills is a wind farm located in Buffalo Ridge, Minn. It was originally built by Northern Alternative Energy Inc. and put in service in June, 1999. The wind farm consists of 18 modern wind turbines on 1,000 acres, having a total rated capacity of 11.88 MW.

The Company purchased the developer’s stake in this farm in April 2007.

Lakota Ridge

Lakota Ridge is a wind farm located north and adjacent to Shaokatan Hills. It was built by Northern Alternative Energy Inc. and put in service in June, 1999. Lakota Ridge has 15 modern wind turbines on 640 acres and has a total rated capacity of 11.25 MW.

The Company purchased the developer’s stake in this farm in April 2007.

In recent years, the Shaokatan Hills/Lakota Ridge wind farms have generated electricity at an average annual rate of 70 million kWh. The LLCs that operate the farms lease the land on which the turbines and transmission facilities are built. The Shaokatan Hills and Lakota Ridge wind farms use approximately 2 percent of the land area; the remaining land area is leased for agricultural use until 2013.

CHI Energy

This operation consists of 16 separate wind farms which are managed and maintained collectively and are located near Shaokatan Hills/Lakota Ridge.  The farms collectively contain 46 modern wind turbines (Vestas turbines rated 660 kW) representing a total rated capacity of 30.36 MW. In recent years, these wind farms have generated electricity at an average annual rate of 93 million kWh. Northern Alternative Energy Inc. developed CHI Energy in the late 1990s and began operating these assets in 2000.

WNEA purchased the developers stake in CHI Energy in December 2007.

Averill project

The Averill project, located near Fargo, N.D., is a 10 MW wind farm expected to come online in 2008. Three turbines owned by CHI Energy are located on-site. The area where Averill is sited is a particularly favorable region for wind power.  Wind data for the site, derived from the performance of existing adjacent turbines over a six-year period, suggests returns on this project exceeding 17 percent annually.          

WNEA purchased a 3 percent equity stake in Averill Wind LLC in February 2007.

Gamesa

WNEA has an option to purchase the Gamesa project, located adjacent to the CHI Energy development. The project consists of 2 Gamesa 850 KW turbines and has a total rated capacity of 1.7 MW. The project is owned by NAE Shaokatan Power Purchasers LLC and commenced operations in May 2003. Federal Production Tax Credits, as well as a state subsidy, extend through April 2013. The LLC leases the land where the turbines are located and has a 30-year-lease term.

Boreal Energy assets

Boreal Energy develops and/or acquires North American wind farms. At present, Boreal Energy has approximately 40 MW of late stage or pre-construction stage projects. In addition, Boreal Energy has approximately 1,200 MW of wind energy projects in its pipeline. The assets acquired by WNEA include:

Great Plains, Iowa

This existing 5.86 MW wind farm has five turbines. Boreal Energy plans to complete the site with a two turbine expansion, increasing total capacity to 9.86 MW. Project returns are forecast to exceed 18 percent annually.

Gascoyne, North Dakota

The first 20 MW stage of the Gascoyne project is ready for construction. This project is expected to produce annual returns exceeding 22 percent. Boreal Energy is also in the final stages of negotiating a 300 MW project expansion with its North Dakota partner, Crownbutte Wind Power LLC.

Ontario, Canada

Boreal Energy owns options on development sites in Ontario, Canada. Initially, two 9.5 MW wind farms are planned.  Boreal Energy has also identified five suitable sites for 10 MW farms and believes there is the potential for an additional 200+MW of generating capacity in Ontario under the standard offer program.  Expected annual returns on the Ontario projects are 18 percent.

Navitas Energy Inc.

The acquired Boreal Energy assets also include an economic interest in 3.8 million shares of common stock (15 percent equity interest) in Navitas Energy Inc., a Minneapolis-based wind farm developer that is majority-owned by Gamesa, a large Spanish wind turbine manufacturer. Boreal Energy is negotiating the sale of the stock back to Navitas in exchange for wind turbines and other wind farm assets and projects. WNEA has agreed to pay 10 million shares of its common stock for the assets Boreal Energy receives from this stock sale.

Ongoing development pipeline

In addition to the above-mentioned projects, Boreal Energy has a pipeline of development projects representing around 1,200 MW of additional capacity. These projects are at various stages of development, have validated wind speeds, and existing or planned transmission potential. The geographic breakdown of the pipeline projects is: 300 MW in North Dakota; 200 MW in South Dakota; 200 MW in Ontario, Canada; 200 MW in Wisconsin; and 300 MW in western Minnesota.

US Looks to Wind Energy - Environmental Research Web

Wind power could provide 20% of all US  electricity by 2030, according to a new report by the US  Department of Energy (DOE). The document, released this month, identifies the requirements needed to reach this goal, which include reducing the cost of wind technologies. The report also highlights that 7.6 cumulative gigatons of carbon dioxide emissions could be avoided by 2030 if wind energy was used as part of the nation's electricity grid.

"DOE's wind report is a thorough look at America's wind resource, its industrial capabilities, and future energy prices, and confirms the viability and commercial maturity of wind as a major contributor to America's energy needs, now and in the future," said DOE assistant secretary of energy efficiency and renewable energy Andy Karsner. "To dramatically reduce greenhouse gas emissions and enhance our energy security, clean power generation at the gigawatt-scale will be necessary, and will require us to take a comprehensive approach to scaling renewable wind power, streamlining siting and permitting processes, and expanding the domestic wind manufacturing base."

Back in 2006, the Bush administration's Advanced Energy Initiative announced clean, secure and sustainable wind energy as having the potential to play a crucial role in long-term energy strategies. However, investment is needed today to fundamentally change the US electricity infrastructure so that greenhouse gas emissions can be reduced by 2025.

The report outlines a possible development scenario for boosting wind electricity generation from 16.8 GW today to 304 GW by 2030. The analysis concludes that achieving 20% wind energy will require enhanced transmission infrastructure, streamlined siting, improving reliability and operability for wind systems, and increased US wind production capacity.

The report also highlights that annual wind installations need to increase from around 2000 in 2006 to almost 7000 in 2017. It states that the cost of integrating intermittent wind power into the grid must not exceed 0.5 cents/kWh. Transmission challenges need to be addressed too, including issues like siting and the cost of new transmission lines, to access the country's best wind resources.

The report comes at an opportune time in wind energy development. Last year, cumulative wind energy capacity in the US reached 16,818 MW. Wind also contributed to more than 30% of new US generation capacity in 2007, making it the second largest source of new power generation – exceeded only by natural gas. What’s more, the US wind energy industry invested about $9 billion in new generating capacity in 2007 while experiencing a 30%  annual growth rate over the last five years.

The report was prepared by the DOE and stakeholders from industry and national labs, including the National Renewable Energy Laboratory in Colorado, the Lawrence Berkeley Lab in California and Sandia National Labs in New Mexico.

---

Recent WNEA News:

June 23 - Wind Energy America Inc. Rated 'Speculative Buy,' Target Price $2.98 by Beacon Equity Research

Wind Energy America Inc. (OTCBB: WNEA) has been rated Speculative Buy with a price target of $2.98 by Beacon Equity Research Analyst, Victor Sula, Ph.D.

The full report is available at http://www.BeaconEquity.com/m.

Anyone interested in receiving alerts regarding WNEA research should e-mail This email address is being protected from spam bots, you need Javascript enabled to view it with “WNEA” in the subject line.

In the report, the analyst writes, “Over the next four years, WNEA plans to complete approximately 280 MW of wind energy projects in the upper Great Plains and Midwest. The Company estimates approximately $69 million of external funding will be required to complete these projects, including $40 million from equity financing. Assuming funding is secured and the various projects are completed, WNEA would expand installed capacity to 400 MW over the next four years. At this generating capacity level, the Company could be producing annual revenues exceeding $80 million from electricity sales and annual income ranging around $40 million to $45 million.”

Other companies in the alternative energy industry include First Solar Inc. (Nasdaq:FSLR), Suntech Power Holdings Co. Ltd. (NYSE:STP), Evergreen Solar Inc. (Nasdaq:ESLR).