December 28, 2012
The largest wind farm to be built in Kansas is set to begin operating within the next few days, but future expansion is up in the air because of the pending expiration of a tax credit companies say is critical to making wind energy competitive.
Flint Ridge 2, jointly owned by BP Wind Energy and Sempra U.S. Gas & Power, will have 294 wind turbines on 66,000 acres in parts of Harper, Barber, Kingman and Sumner counties when it fires up before Tuesday. A BP spokesman declined to be more specific about the start date than "the end of the year."
The Kansas City Star reports each of the turbines will have the capacity to generate 1.6 megawatts of electricity, or enough to supply 160,000 homes.
Its owners said the $800 million project was built in Kansas partly because of the business environment, but mostly because of the state's wind resources, ranked second best in the U.S.
"Kansas is blessed by very strong winds," said John Graham, the CEO of BP Wind Energy, which is a unit of the BP oil and natural-gas conglomerate.
Despite its abundant wind, Kansas is ranked only ninth in the amount of wind-energy installations. According to the Kansas Energy Information Network, the state has 2,192 megawatts of wind energy capacity, not counting Flint Ridge 2. By comparison, Iowa has 4,536 megawatts of installed capacity, the third highest in the U.S.
The Kansas City, Mo., law firm Polsinelli Shughart conducted a study financed by the wind industry that found wind energy had created 3,484 construction jobs in Kansas, 262 operation and maintenance jobs, and 8,569 indirect and introduced jobs as the investment rippled through the state's economy.
Landowners have received about $273 million from leasing land for the wind turbines, while community organizations and local and state governments have taken in $208 million.
Despite those economic numbers, wind energy's future is unclear because of the low price of natural gas -- an economical option to generate electricity -- and the end of the Production Tax Credit at the end of the month.
Many states, including Kansas and Missouri, have requirements that electric utilities use renewable energy to meet part of their electricity demand. The tax credit, which is used to reduce the price of renewable energy to help make it more competitive, also has provided a boost for the industry.
Graham said it will probably take another six years for the cost of wind turbines to decline enough, and their efficiency to increase enough, to allow wind energy to be competitive without the tax credit.
Kansas Gov. Sam Brownback and the state's two U.S. senators support renewing the tax credit.
The American Wind Energy Association, a trade group, has proposed a six-year phase-out, but one of the tax credit's toughest opponents, Rep. Mike Pompeo, said that plan doesn't pass the laugh test.
The wind industry is comprised of multi-billion dollar companies that can stand on their own two feet, he said, adding that he would consider a phase-out only if it quickly moved the industry off the taxpayer dole.
"Without a real phase-out on the table, the only remaining solution is for the wind PTC (tax credit) to expire as scheduled at the end of the year," he said in a statement.