While new wind development this year won't come close to matching 2012, a study by the American Wind Energy Association found at least 22 electric utilities around the country issued requests for proposals for new wind farms during the first six months of the year and many others entered into long-term agreements to buy a combined 3,950 megawatts (MW) of new wind energy from projects across 11 states.Westar Energy in Kansas is among utilities seeking proposals. AWEA didn't include Westar in its count, however, because the utility didn't issue its RFP until late August. Westar is expected to announce selection of a partner for the new project in a week or two, said Westar spokesperson Gina Penzig."We just finished a review of the wind industry's five-year impact on state economies, including Kansas, and the results are pretty compelling," said Elizabeth Salerno, AWEA's Director of Industry Data and Analysis. "They show that the wind energy boom has benefitted the states where (the wind) is strong."Nationally, total wind energy capacity jumped nearly 140 percent between 2008 and 2012, reaching 60,009 MW. Another 1,280 MW were under construction in June.In Kansas, wind generation grew by some 233 percent over the period, going from 813 MW of power to more than 2,700 MW of current capacity.Today, wind powers the equivalent of more than 840,000 homes, the AWEA study notes, with some 11 percent of all U.S. electricity now generated from wind.Farmers turn to wind turbines
While Siemens Wind in Hutchinson experienced a mass layoff at the end of 2012 due to anticipated expiration of the federal Production Tax Credit - which gives a per kilowatt rebate to utilities buying wind from qualifying farms, thus reducing the cost of the energy - the manufacturing company has since come back nearly to full staff, thanks in large part to several new international contracts for nacelles, noted Kimberly Svaty, Kansas public policy director for the five-state Wind Coalition."We're still seeing growth and positive movement in the Kansas economy in relation to the wind industry, in both manufacturing and development," Svaty said.Siemens communications specialist Myca Welch said Siemens is "actively bidding on projects in the U.S. and abroad, and that the Hutchinson facility is currently exporting nacelles to Canada, Chili and Peru" and that the company will continue to look for additional export opportunities.Welch explained that, on average, it takes 18 to 24 months to establish a wind farm and added that the wind energy sector would benefit from an extension of the Production Tax Credit."Like other domestic energy sources, American wind power needs a predictable, stable, pro-growth tax policy," Welch said. "Extending the PTC for the longest practical term will help nurture the growth of this clean energy source and thereby grow our economy, save ratepayers money and continue to create jobs."
"I think there are two factors, particularly for Kansas, that are driving not only development of wind projects, but wind-related manufacturing in the state," Salerno said, referring to both the Hutchinson plant and other component part makers supplying Siemens.The first, she said, are graduated minimum Renewable Portfolio Standards imposed by lawmakers in numerous states. In Kansas, for example, utilities must supply at least 15 percent of their electricity from renewable sources by the fourth quarter of 2016, and 20 percent by 2020 - one reason Westar is seeking new resources."Rates are coming in at 3 or 4 cents per kilowatt hour (kWh)," Salerno said. "So companies are not just building projects to serve local load needs, but for outside contracts, particularly in the southeast."Those contracts for Kansas wind include agreements with: Southwestern Electric Power Company (SWEPCO), which serves customers in Arkansas, Louisiana and eastern Texas; Tennessee Valley Authority (TVA), a corporation owned by the U.S. government that provides electricity for customers in parts of seven southeastern states; and Alabama Power, which will buy the 249 MW of energy from TradeWind Energy's Buffalo Dunes project now under construction in western Kansas.
AWEA attributes the current price primarily to two factors, Salerno said. The first is the 2.2 cents per kilowatt Production Tax Credit (PTC) rebate. Congress extended the PTC in January for one year. Because of the late action on the extension (the tax expired in December 2012), rather than requiring projects be completed by the end of the year to qualify, Congress said they only must be started by then.Under an interpretation of the extension language by the Internal Revenue Service, a project may qualify for the credit if "a certain level of investment is made by year's end," Westar's Penzig said. "That will count in lieu of breaking ground." Westar's intent is for any project coming out of the RFP to qualify.After the PTC rebate, that brings a utility's actual cost for the power down to about 2 cents per kilowatt, Salerno said. And utilities are locking in that rate for 20 to 30 years under long-term contracts."That's an incredible price for any form of energy, especially for a contract that's for 20 years or more," Svaty said. "Those are very compelling numbers."Also contributing to lower power costs, Salerno said, are strides in technology related to wind turbines, blades and towers, as well as a significant portion of turbine production moving to the U.S.The lowest prices go back more than a decade, when developers built farms in only the best wind locations, Salerno explained. As the number of wind farms expanded into less than prime wind areas, costs to produce the same amount of wind rose.Improving technology, however, is now allowing as much energy to be produced at slower wind speeds as was produced in the best wind areas.