Kansas Wind Power Looks Beyond Hurdles

Despite increased uncertainty in the wind power market due to an expiring federal tax credit, Kansas Wind Power has signed an agreement with Black & Veatch, a global engineering, consulting and construction company, to study the impact of new wind generation on the regional transmission system.

Overland Park, Kansas – December 4, 2003 [SolarAccess.com] Kansas Wind Power has a number of utility-scale wind energy projects under development to serve the needs of utilities in Kansas, Missouri and surrounding states. These include two large wind farms, each between 150 and 250 MW, both to be sited in Kansas and located in Ellsworth and Morris counties. While development of large projects such as these are likely to increase in the coming years, it’s doubtful any of them will be put in the ground next year. The wind industry has been dealt a significant blow from the upcoming expiration of the Federal Production Tax Credit (PTC) which was tied up in the recent energy bill that failed to gain enough support in Congress. While most projects destined for construction next year will likely be put on hold, Kansas Wind Power’s projects are planned for 2005 at which time the company anticipates the PTC will have been renewed. The PTC’s 1.8 cent per kWh tax credit has been essential to the wind industry which competes against an entrenched fossil fuel industry heavily subsidized by the government. “All plans are on hold until the PTC passes,” said Troy Helming, CEO of Kansas Wind Power. For us the PTC must be renewed.” Helming explained that despite the recent PTC expiration, the longer term prospects look better for the wind industry since many utilities are anticipating the passage of a national Renewable Portfolio Standard (RPS) such as was recently passed in the UK. An RPS was included in earlier versions of the energy bill but was scrapped in the final conference version. “Whether or not an RPS passes, the perception is that the utilities feel it will pass,” Helming said. “The utilities are planning ahead, they like to do things on their own, they don’t like being mandated. The utilities recognize that now is the time to plan for a 2005-2006 project.” In planning for these future Kansas Wind Power projects, Black & Veatch will evaluate the impact of the proposed wind projects within the Southwest Power Pool (SPP) and will conduct feasibility studies for various sized projects and transmission paths. While transmission, interconnection and other issues will be studied by Black & Veatch, the wind resources in Kansas are a given. “Kansas is ranked number one for potential including wind and biomass,” Helming said. “A new map came out that shows estimates were grossly underestimated. Kansas cold produce over 2000 terawatt hours, enough for half the country’s electric grid.” While many flat, remote areas of the Midwest have tremendous wind power potential they’re often limited by lack of adequate electrical transmission. Not only does Kansas have great wind resources, but the state fares better in terms of transmission than most other windy Midwest states. Helming said the state’s transmission is more robust than North Dakota, South Dakota, Texas and others. He foresees another 1000-2000 MW can be added without any major upgrades to the existing electrical grid. In addition, to the transmission studies, Black & Veatch will prepare and submit system impact studies, expedited generation interconnection requests, facilities studies to the SPP and manage follow-up activities related to the studies on behalf of Kansas Wind Power. The company is also a preferred contractor for any engineering, procurement and construction (EPC) work. The specific utilities to be involved have yet to be revealed and the wind turbine manufacturer will not be decided upon until Kansas Wind Power selects an equity partner who will assist in the decision. In the meantime, Helming looks forward to the PTC’s expected renewal sometime next year but does feel that in the end, it’s an RPS that will make all the difference for the market. “My desire would be to see the PTC renewed for five years, and then an RPS,” Helming said. “It (an RPS) creates a market for green tags and the market demand will force the wind farms. The price may be a little higher initially but economies of scale would kick in. Instead of seeing incremental growth, we’ll see geometric growth in efficiency and a drop in pricing all due to a sustained, secure market.”

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