Mega-wind farm moves forward; will others follow?

Source: Daniel Cusick, E&E reporter • Posted: Wednesday, September 7, 2016

The largest planned wind energy project in U.S. history cleared a key hurdle late last month as Iowa regulators ruled that MidAmerican Energy Co. could proceed with a $3.6 billion mega-wind farm to be built over the next three years.

The 2,000-megawatt Wind XI project, to be built at a half-dozen sites across Iowa, would become the largest operating wind farm in the United States if completed on schedule by 2019. It is one of a small number of proposals currently in the development pipeline that call for generating wind energy at the scale of a baseload coal or nuclear plant.

In a statement, MidAmerican executives said the Aug. 26 order from the Iowa Utilities Board approving the project’s construction “is a positive step toward the company’s 100 percent renewable vision,” which was also rolled out earlier this year as part of a commitment to curb greenhouse gas emissions across the utility’s Iowa service territory.

“This is an exciting day for our customers, the state of Iowa and MidAmerican Energy,” said Bill Fehrman, the Des Moines-based utility’s president and chief executive officer, in a statement announcing the approval. “Wind energy helps us keep prices stable and more affordable for customers, provides jobs and economic benefits for communities and the state, and contributes to a cleaner environment for everyone.”

Officials say the project will generate more than $1.2 billion in landowner lease revenues and property tax payments over 40 years, while also adding hundreds of permanent new jobs to Iowa’s wind energy sector, which ranks No. 2 nationally behind Texas in terms of installed wind power capacity.

But officials with Mid-American, as well as an expert at the American Wind Energy Association, stopped short of predicting that such “mega-wind farms” will become a dominant future trend.

Rather, they said, the emergence of gigawatt-plus wind projects is a natural progression for an industry that has deeply tapped windy sweet spots in places like Iowa, Texas and Wyoming, but has also leveraged technology and policy advantages that make wind more attractive than other electricity fuels in many places.

“I think it highlights the value that utilities and other power-sector participants are finding in wind,” said John Hensley, AWEA’s manager of industry data and analysis. “It’s also happening at a time when the [production tax credit] is still at full value, so we’re seeing more and more utilities come to the table quickly and make strong commitments to wind energy to maximize the value of their investment.”

Cost of wind down two-thirds

The PTC is not the only driver behind wind energy’s dramatic upward scaling, officials said. Costs for wind energy have dropped nearly two-thirds since 2009, making wind power competitive with other traditional electricity fuels, including natural gas.

At the same time, advances in turbine technology, more precise wind forecasting, digital automation of wind farms and improved operational efficiencies have allowed companies like MidAmerican to capture more energy from the same wind resource across new and existing production areas.

Michael Fehr, MidAmerican’s vice president for resource development, said Iowa is particularly well-suited for mega-wind projects like Wind XI due to its large wind resource, state policies that encourage developers and utilities to deploy wind energy, and landowners’ experience and comfort level with wind farms.

“Part of the reason we have broad support [in Iowa] is that people are familiar with it now,” Fehr said. “We have a lot of counties that have been able to take advantage of the tax revenue these projects generate, and we have landowners who appreciate having gone through some cycles in the agricultural economy. They see wind as a source of income that doesn’t go up and down with the value of their crop.”

Utilities in wind-rich areas have also benefited from regional transmission organizations, such as the Midcontinent Independent System Operator, which has worked aggressively over the last decade to improve grid reliability and incorporate more intermittent resources such as wind and solar.

Perhaps no utility in the country has done more to leverage those advantages than MidAmerican, a subsidiary of Berkshire Hathaway Energy, a holding company controlled by billionaire Warren Buffett.

Wind is ‘mainstream’ everywhere, not just Iowa

Since 2004, the company has installed more than 4 gigawatts of wind energy at 19 sites across Iowa, with an estimated total investment of $6.7 billion. An additional 550 MW is projected to come online at two sites this year, while Wind XI will be built in three phases at six sites, with in-service target dates for each phase set for 2017, 2018 and 2019, Fehr said.

MidAmerican would not identify its proposed Wind XI sites, citing ongoing lease negotiations between the utility and landowners. But Fehr described them as being generally within the established wind belt of central Iowa, but with the “center of gravity moving east,” reflecting the expansion of transmission corridors.

Hensley, the AWEA analyst, stressed the growing role that projects like Wind XI will have in providing electricity beyond state and regional boundaries to feed load centers at greater distances from the rural regions where wind energy is produced.

“What this reflects is that wind energy is now becoming a mainstream energy source for the entire country, not just for places like Texas or Iowa,” he said.

That trend is reflected not only in the completion of transmission lines that carry wind power from production sites to load centers, but in the recent siting of utility-scale wind projects in non-traditional states like North Carolina and Connecticut. As for mega-wind farms, Hensley said projects the size of Wind XI could be ripe in a handful of other Midwestern and Plains states — including Texas, Oklahoma and Kansas — as well as in parts of the Intermountain West.

Only one other gigawatt-plus scale wind farm operates in the United States, the Alta Wind Energy Center in Kern County, Calif. That project, with a nameplate capacity of 1,547 MW, is the nation’s largest wind farm and sells all of its generation to Southern California Edison Co. under a 25-year power purchase agreement.

Another mega-scale wind project designed to serve Western electricity markets is the Chokecherry and Sierra Madre Wind Energy Project in southern Wyoming. There, developers hope to produce up to 3 GW of wind energy at a site near Interstate 80 in Carbon County. That project, projected to host 1,000 turbines, remains under review by federal regulators.