Clean energy is on the rise and now is the perfect time to invest in this cost-effective energy source. We here at Windergy are looking to start a new up and coming energy company that will be supported using wind turbines. We have created a strong corporate culture, with ethics at the foundation of every aspect of our business. We have compiled a strong compliance team and have created a detailed compliance plan for review. Our goal is to serve the community, shareholders, stakeholders, and investors by offering clean energy with the least amount of associated risk as possible.
The Wind Turbine Industry is a reliable cost-effective source of clean energy. The first known wind turbine used to produce electricity was built in Scotland in 1888. The wind turbine is created by Prof James Blyth of Anderson’s College, Glasgow (now known as Strathclyde University). “ (Clarion Energy, 2014) Records show that “Growth in clean energies is unstoppable, as reflected in statistics produced in 2015 by the International Energy Agency (IEA).
“Windergy”-Clean Energy is looking to purchase land and build wind turbines in the Appalachian Mountains to help reduce the overall energy costs for Virginia residences. We are looking for likeminded investors to assist to make these costs cutting efforts a reality for all who reside in the state. These efforts will also reduce the overall emissions percentages for the area. Wind power is a rapidly growing industry. “To underscore how quickly wind power is taking root in America, consider this: it took 25 years to reach 10 GW, which occurred in 2006. But it only took four years to grow from 20 GW (2008) to 60GW (2012). Of course, more wind energy also means less carbon pollution that contributes to climate change. With 60 GW installed, it’s like taking 17.5 million cars off the road.” (Department of Energy, 2013) With the increase of its popularity and the positive impact, it has on the environment the time is now to invest.
Clean energy is a heavily regulated entity. When looking into cost, location, and benefits of wind turbine energy we need to be aware of all federal, state and local regulations to ensure we stay compliant throughout the project. On the federal level, the National Wind Coordinating Committee along with the Department of Energy ensures that there is a balance of wind energy production and the protection of wildlife. For the state of Virginia, the wind energy regulation code is Va. Code §56-265.1 to .9; §67.103. It discusses in depth the locations, types, and authorized divisions allowed to build small and large wind turbines in the state of Virginia. Also, on the local level Sec. 32-300.01. – General regulations discuss the regulations on a much smaller scale. Being that the state of Virginia is our home location it is imperative that we create our strategies in accordance with these set regulations. We will abide by these regulations by following all zoning ordinances set by the state and county. Collect all necessary special permits as needed. Ensuring we meet all structural guidelines and abiding by the environmental protection regulations to minimize any disturbances to the surrounding areas and wildlife.
How Regulations Will Influence the Organization
As an organization, it is our responsibility to ensure we do our due diligence by working with the regulations regarding our social, financial, and economic responsibilities. Producing wind energy makes this an easy task on all levels. Socially wind energy has significate benefits on the environment. First and foremost, it is an “indispensable partner in the fight against climate change. Renewables do not emit greenhouse gases, making them the cleanest, most viable solution to prevent environmental degradation.” (Acciona, 2019) It is also inexhaustible being that it is natural and is not a conventional energy source like coal.
Financially, the return on investment can be high. There are several federal tax incentives for companies that utilize and produce clean energy. One example is “The Tax Cuts and Jobs Act of 2017 increased bonus depreciation to 100% for qualified property acquired and placed in service after September 27, 2017, and before January 1, 2023. Under the federal Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions.” (Lips, 2018) In addition to the tax cut, renewable energy is low cost to produce when compared to gas, coal, and nuclear sources. See Chart Below.
*The reason hydroelectric and wind power do so well on this measure is mainly due to the relatively small amounts of energy needed to build dams. (Paul, 2013)
Being able to get a high energy returns on our investment is important to our bottom line. Being able to provide more kWh allows us to create more energy production at a lower investment cost in comparison to other methods like coal, gas, and nuclear sources. These savings are passed down to our customers and provided a more economically alternative.
It is also our responsibility to be economically responsible while conducting business. With producing wind energy, we are also reducing energy dependence. “The indigenous nature of clean sources gives local economies an advantage, bringing meaning to the term “energy independence”. Dependence on fossil fuel imports results in subordination to the economic and political short-term goals of the supplier country, which can compromise the energy supply. Everywhere in the world, there is a renewable resource – whether that be the wind, sun, water or organic material – available for producing energy sustainably.” (Acciona, 2019) In the state of Virginia, the Appalachian Mountain Range along with outlying cites provides ample opportunities to provide more clean energy sources to the state. “Virginia has defined voluntary (but not mandatory) Renewable Portfolio Standards in the 2010 Virginia Energy Plan. The state’s Renewable Portfolio Standard is limited to investor-owned utilities, so it excludes electric cooperatives, municipal utilities, and industrial co-generation plants. The standard also excludes nuclear energy from the baseline. The optional target is to obtain 15% of the remaining sources of electricity from renewable sources by the year 2025.”1 (Grymes, 2019)We have the opportunity to assist in meeting the state’s 15% goal by 2025. See the chart below.
Virginia annual average wind power (note the Class 5 potential in Highland County)
When surveys were conducted on how communities felt about local wind project overall there was a neutral to positive response. One survey conducted polled a local community with two control-groups one that resided within five miles of the turbine locations and the other within a half a mile. As shown in the chart below, only 8% of the people polled within five miles from the site had a negative outlook and 25% within a half a mile radius. Overall these are favorable results. (Firestone, Hoen, & Rand, 2019)
To ensure we meet all our responsibilities in a timely and ethical manner we have created a compliance team that will work diligently to keep the organization on track. Our compliance officers will assist in creating and updating all our corporate policies and procedures according to federal, state, and local regulations. This team will also create a training program to assist in ensuring all employees are informed and trained in all aspects of the corporate policies. It is important that all parties regardless of their job title are familiar with these policies. Our compliance team will be responsible for investigating incidents and “evaluating the level of compliance across the entire organization.” (Groot, 2018) In addition to monitoring our compliance practices, the compliance team will also be reporting to the board of directors on everything related to compliance (from policy development and monitoring to enforcement and implementation). (Groot, 2018) One of the most important aspects of our compliance team is the open communication concept on all levels within the organization. With this concept, we plan to be able to catch any issues that may arise in a timely fashion and resolve the issues immediately.
Corporate Governance Structure
Our corporate structure consists of a Chief Executive Officer (CEO), Chief Financial Officer (CFO), our Board of Directors which consists of 9 members, and our Audit Committee. Each of these positions and groups all makes compliance a top priority.
Our CEO’s responsibility when it comes to compliance is to communicate effectively to all parties including shareholders. Our compliance team will ensure the organization is meeting all regulations by staying up to date on any regulatory changes. They will be training all employees on our policies and monitor activity to discover, investigate, and prevent any wrongdoings by employees from an organizational standpoint. The CFO will ensure all financial documents are accurate and available in a timely manner to our audit committee as scheduled. Our audit committee will conduct thorough audits of all aspects of the organization and report back any findings to the CEO, CFO an Board of Directors as needed. Lastly, the board of directors will meet and stay up to date on activities of the organization to ensure that our regulatory, financial, and ethical obligations are met. It is important to have strong checks and balances in place to prevent issues from falling through the cracks.
When assessing risks, we may encounter throughout this project there are a few setbacks that could take place. One, land availability in designated areas due to conservation. Two, unforeseen delays in delivery and building of the turbines. Three, not being able to meet deadline due to inclement weather or staffing issues. With these risks and any others, we may encounter throughout the project we will ensure we run a detailed risk assessment to quantify these risks. These assessments will be headed by our risk management team that is compiled of subject matter experts covering all phases of this project. They will then priorities the risk and monitor the status throughout the duration of that particular phase of the project. Making and changes as needed to ensure the success of the project.
Establishing a Culture of Ethics
To establish a culture of ethic it must come from the top down. Starting the CEO, CFO, and Board of Directors. We will ensure all employees are trained on our core values and our mission. This will create a “one team” atmosphere and it will start with a solid onboarding process developed by human resources and our compliance team. All levels of management will have an open-door policy and we will ensure all management leads by example. Creating a positive and ethical environment is one of our core values. We have established a zero-tolerance policy that is written in our employee handbook and emphasized during our onboarding process. We are also committed to conducting an annual company-wide meeting to address any regulation or policy changes that may arise.
Wind Turbines create a cost-efficient “green energy” that has the potential to be profitable for the organization as well and benefit the local community socially, finically, and economically. With investing in our organization there is a promising return on investment while lowering long term emissions production. We have created a strong corporate structure build on compliance and ethics and look forward to working with a likeminded organization long term.
- Acciona. (2019). Renewable energy. Retrieved from Acciona: https://www.acciona.com/renewable-energy/
- Clarion Energy. (2014, November 21). History of Wind Turbines. Retrieved from Renewable Energy World: https://www.renewableenergyworld.com/2014/11/21/history-of-wind-turbines/
- Department of Energy. (2013, January 21). A Record Year for the American Wind Industry. Retrieved from Department of Energy: https://www.energy.gov/articles/record-year-american-wind-industry
- Groot, J. D. (2018, September 18). Chief Compliance Officer: What CCOs Do (and Why Your Company Should Have One). Retrieved from Digital Guardian: https://digitalguardian.com/blog/chief-compliance-officer-what-ccos-do-and-why-your-company-should-have-one
- Grymes, C. A. (2019). Wind Energy in Virginia. Retrieved from Virginia Places: http://www.virginiaplaces.org/energy/windenergy.html
- Lips, B. (2018, August 21). Modified Accelerated Cost-Recovery System (MACRS). Retrieved from Dsireusa: https://programs.dsireusa.org/system/program/detail/676
- Paul, A. (2013, March 20). Energy return on investment – which fuels win? Retrieved from Carbon Brief: https://www.carbonbrief.org/energy-return-on-investment-which-fuels-win
- Prince William County, VA. (2019). Sec. 32-300.01. – General regulations. Retrieved from Prince William County, VA: https://library.municode.com/va/prince_william_county/codes/code_of_ordinances?nodeId=CH32ZO_ARTIIIAGREDI_PT300GERE_S32-300.01GERE
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