The Green Energy Boom
A leader in oil and gas, Oklahoma is poised for supremacy in wind energy.
Already the sixth largest producer of wind energy in the country, up two spots from 2011, Oklahoma’s moving forward again. With success in the wind power sector showing up faster than originally anticipated, the state’s in a position to take a lucrative step toward growing it again. In July, two wind power interests, Renewable Energy Systems America and Energy Renewable North America, announced plans to build two large wind farms in Oklahoma, both pursuing a singular mission: contributing not just to Oklahoma’s energy supply, but also exporting power out of state.
Wind energy accounts for a bit over seven percent of the state’s power. No doubt it would be more, but hiccups with the math and technology stalled earlier wind energy efforts. Those have been, and continue to be, overcome. One tough obstacle to the use of wind energy is the ability to distribute it effectively. Getting that energy on the state’s grid is not easy. It’s a widely recognized tenet of doing business in the wind energy sector that putting together transmission abilities takes much longer than the construction of the wind farms themselves.
On track to be the second largest producer of wind power by 2030, the powers that be, business and governmental, are looking to open new markets that will keep Oklahoma on the path to reaching that 2030 goal. The first steps toward that goal came in July, when Renewable Energy Systems Americas (RES Americas), a British company, announced plans to use its Origin Wind Energy Project to sell 150 megawatts to the Arkansas Electric Cooperative Corporation (AECC).
The Origin Wind Energy Project, located in Murray and Carter counties in southeast Oklahoma, is a 75-turbine project scheduled to begin commercial operation by the end of next year. The AECC, for now, will be the sole recipient of its output.
Spanish company EDP Renewables North America (EDP) plans to use its Arbuckle Mountain wind project to export 100 megawatts to Nebraska’s Lincoln Electric System. This wind farm is expected to be online by the end of 2015.
“We are delighted to work with the AECC,” said Tom Hiester, senior vice president of development with RES Americas. “This purchase demonstrates the AECC’s forward-looking approach to diversifying their portfolio, as well as their understanding of the economic benefits that long-term, low-priced wind energy contracts offer to their members.”
The AECC is a consortium of 17 distribution cooperatives providing electricity to more than 50,000 customers in Arkansas and surrounding states. The AECC’s groundbreaking agreement was also made possible with the efforts of the National Renewables Cooperative Organization (NRCO), an organization enabling cooperatives nationwide to pool the ownership and benefits of renewable resources. The group’s primary mission is the facilitation of the development and acquisition of cost-effect renewable energy assets that assist its members with the diversification of their energy resource portfolios.
“The NRCO is pleased that Arkansas Electric Cooperative Corporation has contracted for additional wind resources,” said Amadou Fall, CEO of NRCO. “NRCO members continue to diversify by including renewable generating capacity. They are doing so economically.”
“The latest addition of 150 megawatts of low-cost wind energy provides AECC with a hedge against fluctuating natural gas energy prices,” said Duane Highley, president and chief executive officer of AECC, a Little Rock-based wholesale electricity supplier. “AECC will have 201 megawatts of wind energy in its generation assets with this addition. We will continue to pursue energy options that allow AECC’s member cooperatives to provide reliable electricity at the lowest possible cost.”
Lincoln Electric’s CEO Kevin Wailes points to an important economic consideration working to the advantage of wind energy producers. At least a portion of the incentive behind his 20-year contract with EDP is a function of the federal production tax credit extension. The same extensions benefit RES-America’s bottom line, and will boost, over the lifetime of the credits, the profitability of native Oklahoma energy companies exploring or implementing wind energy production, as well. Figuring in tax credits and depreciation, a majority of wind power generators will recover the costs of their initial investments in about eight years.
The Federal Energy Commission’s recent announcement that 2012 saw more wind energy development in America than in any other nation comes as no surprise. It was anticipated. Oklahoma’s wind energy producers are probably less surprised than the general public. Larger Oklahoman producers added just over 1,100 megawatts during 2012.
That kicks the state’s production up by more than half with a grand total of 3,100 megawatts – enough to power 780,000 homes. Kylah McNabb, renewable energy specialist at the Oklahoma Department of Commerce, notes that while the state added no new wind generation this year, there are roughly 500 megawatts in projects under construction and she hopes for them to be generating power by the end of 2014.
The western half of Oklahoma sits squarely near the end of America’s “wind tunnel,” a stretch of land with endpoints in North Dakota and the Texas panhandle. A significant portion of America’s best wind resources are located in western Oklahoma. By most estimates, the state, with an aggressive pursuit of wind power, could eventually provide enough energy to power one third of the country.
With this many wind farms under construction, Oklahoma Commerce Department officials are positioning the state as a center for the manufacturing of the turbines and towers necessary for their productions. In response, many state technical education facilities are ramping up programs to train and certify workers with specialties benefiting the industry. Tribes are getting in on the action, as well. The Cherokee, Kaw, Otoe-Missouria, Pawnee and Ponca nations have plans to develop a medium-sized wind farm on Cherokee lands.
America’s dependence on fossil fuels won’t come to an end anytime soon, but with an explosion in wind development, Oklahoma is set to remain a leader in the energy industry well into the future.