Wind Energy in Kansas / Kansas Agricultural & Rural Leadership program / Norton, Kansas

Rural Property Trends Roadshow Wind Energy in Kansas

Norton, Kansas December 4, 2013

Discussion Goals

•  Context / Info – Wind Energy in Kansas

– Regional Electricity Marketplace – Development and Decision-‐making – Leadership and Policy

•  Key QuesOons / Discussion

Key ObjecOons to Wind

•  Wind costs too much relaOve to other fuel sources.

•  Wind is unreliable. •  There isn’t enough wind energy available. •  Wind development is ugly. •  Wind is uniquely dependent upon gov’t intrusion and market manipulaOon.

•  Wind is unproven. •  Wind represents ideas/people we don’t trust.

Wind Energy / Kansas

•  Wind InstallaOons –  Installed Wind Capacity: 2,713 megawaWs (MW). State Rank: 9th.

–  Number of Wind Turbines: 1,592 turbines. State Rank: 9th. – Wind Projects Online: 23 wind projects

– Wind Capacity Added in 2012: 1440.7 MW. State Rank: the 3rd most during 2012, and 9th fastest growing state.

– Wind Capacity Added in 2011: 199.8 MW


#

###

#

#

#

#

!

!!

#!

! #

!

! #!

!!

! !!

!!

!!

!

!

!

!!! !

!!

!

!#

" #

#

#

BuffaloDunes

FlatRidge

100MW

Greensburg12.5MW

Elk River150MW

Gray County112.2MW

Spearville1-3

249MW

CentralPlains99MW

SmokyHills249MW

MeridianWay201MW

FlatRidge 2470MW

ShootingStar

105MW

Ironwood168MW

CaneyRiver200MW

Ensign99MW

Cimarron1-2296MW

Post Rock201MW

Wind Farms and Wind Resource Potential in Kansas

Kansas Wind Farms (2013)# Existing (2,712 MW)" Under Construction! Proposed

Wind Power Density at 50m (W/sq. m; 2009)Poor (0 - 200)Marginal (200 - 300)Fair (300 - 400)Good (400 - 500)Excellent (500 - 600)Outstanding (600 - 800)

Source: Institu te for Policy & Social Research, The University of Kansas; data from the National Renewable Energy Laboratory with wind farm data from the Kansas Wind Resource Planner and the Kansas Corporation Commission.MW - megawatts


•  Wind Economy –  Total direct and indirect jobs 2012: 4001-‐5000. Rank: 5th. –  Capital investment: over $5 billion dollars –  Annual land lease payments: over $7,900,000 –  NaOonwide, the wind industry has over 550 manufacturing

faciliOes producing products for the wind industry that range from blade, tower and turbine nacelle assembly faciliOes to raw component suppliers including fiberglass and steel. Number of manufacturing faciliOes in Kansas: 7 faciliOes.

–  Major wind turbine manufacturer Siemens opened a $50 million nacelle assembly facility in Hutchinson, Kansas in November 2010, the effects of which will be felt throughout the Kansas supply chain.


•  Wind Resource –  Percentage of Kansas' electricity provided by wind in 2012: 11.4 percent. State Rank: 6th.

–  Equivalent number of homes Kansas wind farms now power: over 840,000 average American homes.

– Wind potenOal at 80 meters hub height is 952,371 MW. State Rank: 2nd best wind resource in the U.S.

–  Raw wind power is capable of meeOng more than 90 Omes the state's annual current electricity needs.


State Total (km2) Excluded (km2)

Available (km2)

Available (% of state)

% Windy Land Excluded

Installed Capacity (MW)

Annual GeneraDon (GWh)

Kansas 211,861.3 21,387.1 190,474.2 89.38 10.1 952,370.9 3,646,590

EsOmates of Windy Land Area & Wind Energy PotenOal by State for areas >=30% Capacity Factor at 80m

Na#onal Renewble Energy Laboratory, updated 4/13/11

“Excluded” (3 mi buffer) • Designated urban areas • NaOonal Parks, Monuments, Preserves • Waterways • Does not include FAA radar installaOons or areas like the Heart of the Flint Hills

Map of ISOs and RTOs

9

6 ISOs in North America: CAISO, NYISO, ERCOT, AEISO, IESO, NBSO 4 RTOs in North America: PJM, MISO, SPP, ISO-‐NE

Southwest Power Pool

10

•  Who is SPP?

•  Independent, non-‐profit, Regional Transmission OrganizaOon

•  ~500 employees

•  Membership in 9 states

•  Arkansas, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, Oklahoma, and Texas

•  Manages reliability from LiWle Rock, Arkansas

•  24 x 7 operaOons •  Full redundancy and backup site

•  FacilitaOon •  Reliability CoordinaOon •  Transmission Service/ Tariff AdministraOon

• Market OperaOon

•  Standards Sesng

•  Compliance Enforcement

•  Transmission Planning

•  Training

Our Major Services

Regional Independent Cost-‐effec3ve Focus on reliability

11

Regional Electricity Marketplace

•  The Southwest Power Pool –  Centralized, regional transmission, distribuOon, and balancing

authority –  Moving to an Integrated Marketplace with Day Ahead Market –

commodiDzing electricity –  Efficiencies and economies of scale at work

•  GeneraOon, UOliOes, Consumers •  Scale, Scope, Dispatch

–  Electricity producOon & distribuOon in (esp. rural) America has been balkanized and anachronisOc – exisOng boundaries increasingly cumbersome

–  Loads of unanswered quesOons, but change is coming

13

•  With the Integrated Marketplace, SPP will assume the role of the Balancing Authority (BA)

•  Balancing Authority is the responsible enOty that integrates resource plans ahead of Ome, maintains load-‐interchange-‐generaOon balance within a Balancing Authority Area, and supports InterconnecOon Frequency in Real-‐Time

Balancing Authority

14

15

13

11

16

Balancing AuthoriDes (as it exists today)

SPP – BA (as it exists tomorrow)

SPP

12

10

8

9

5 4 7

6

1

2

3

SPP Roles and ResponsibiliOes

•  Post implementaOon of the Integrated Marketplace, SPP is responsible for: •  Providing all market services for Energy, OperaOng Reserve, and Transmission Service in accordance with the Open Access Transmission Tariff (OATT) and Market Protocols

•  Managing and administering the Tariff •  AcOng as the centralized SPP Balancing Authority •  Providing reliable operaOon of the transmission system

•  Administering the Day-‐Ahead, Real-‐Time, OperaOng Reserve, and Transmission CongesOon Rights Markets

14

Integrated Marketplace Net Benefits

•  Projected savings around $45-‐$100 Million/Year

•  Reduce total energy costs through centralized unit commitment while maintaining reliable operaOons

•  Day-‐Ahead Market allows addiOonal price assurance capability prior to real-‐Ome

•  Includes new markets for OperaOng Reserve to support implementaOon of Consolidated Balancing Authority (CBA) and facilitate reserve sharing

15

Development & Decision-‐making •  Iowa

–  Wind generaOon potenOal at 80 meters = 570,714 MW. 7th best wind resource in the U.S

–  Wind Jobs = 6001-‐7000. State Rank = 3rd

–  Capital investment: over $9.8 billion –  Annual land lease payments:

over $16,000,000 –  Wind-‐RelaOng Manufacturing: 15

faciliOes. –  Installed Wind Capacity: 5,133

megawaWs (MW). State Rank: 3rd –  Wind Projects Online: 100 wind projects –  Percentage of Iowa's 2012 electricity

provided by wind: 24.5 %. Equivalent number of homes Iowa wind now powers: over 1.3 million average homes

–  Iowa wind power is capable of meeOng more than 44 Omes the state's current electricity needs

–  Republican governor, Republican House, Democrat Senate

•  Kansas –  Wind generaOon potenOal at 80 meters

= 952,371 MW. 2nd best wind resource in the US.

–  Wind Jobs = 4001-‐5000. State Rank = 5th

–  Capital investment: over $5 billion –  Annual land lease payments:

over $7,900,000 –  Wind-‐RelaOng Manufacturing: 7

faciliOes. –  Installed Wind Capacity: 2,713

megawaWs (MW). State Rank: 9th. –  Wind Projects Online: 23 wind projects –  Percentage of Kansas’ 2012 electricity

provided by wind: 11.4 %. Equivalent number of homes Kansas wind now powers: over 840,000 average homes

–  Kansas wind power is capable of meeOng more than 90 Omes the state's current electricity needs

–  Republican governor, Republican legislature

Development & Decision-‐making •  In Iowa

–  MidAmerican Energy in construcOon on 1050MW of new wind in IA by 2015

•  448 turbines, power for 317,000 addiOonal avg. households. •  Up to 1,000 new construcOon jobs over 2 years, 40 permanent jobs. •  $1.9 billion in new investment. Will be the largest single economic development investment in the history of the state.

•  $3 million annually in new landowner payments, $360 million in addiOonal property tax revenues over 30 years, across five counOes.

•  All of the blades will be manufactured at Siemens’ Fort Madison, IA facility, while the nacelles will be manufactured at Siemens’ Hutchinson, KS facility.

•  The expansion will not add customer costs and will help stabilize electrical rates. Aver the first 350 megawaWs of new generaOon capacity are installed, a $3.3 million rate reducOon will take effect. By 2017, the rate reducOon will increase to $10 million per year.

•  Once new turbines are operaOng the company expects to produce 39% of its retail generaOon from wind power (coal = 33%).

Development & Decision-‐making •  In Iowa

–  “Facebook has selected a Des Moines suburb as the site for its next data center. The social media giant plans to break ground this summer in Altoona, Iowa, on a $300 million data center that could be the first of three faciliOes there. Much of the news coverage has focused on the $18 million in tax credits awarded by the state, but Facebook had another reason to ‘like’ Iowa: wind power.” Midwest Energy News

–  “A $1 billion data center reportedly has picked Iowa over Nebraska, despite an effort by the state to sweeten its economic incenOves for such large projects. And Iowa appears poised to get another high-‐tech plum: an addiOonal $400 million investment at an exisOng data center for Google just south of Council Bluffs.” Omaha World Herald

Development & Decision-‐making

•  Oklahoma –  AEP-‐PSO adding 600MW wind

•  “American Electric Power-‐Public Service Co. of Oklahoma said it originally planned to purchase up to 200 megawaWs of wind energy but contracted for an addiOonal 400 megawaWs aver seeing extraordinary pricing opportuniOes that will lower uOlity costs by an esOmated $53 million in the first year and even more thereaver.”

•  Nebraska –  OPPD adding 400MW wind

•  "It had to do with the prices," OPPD spokesman Mike Jones said, when asked why the Omaha-‐based uOlity made such a large power purchase.

–  LES adding 100MW wind (from Oklahoma) –  NPPD turned down lowest cost offers on 200MW (1700MW submiWed on RFP) –  LB104 extended sales tax abatements to RE

•  Colorado –  “Xcel Energy earlier this year set a new record, generaOng 60.5% of its electricity using the wind, up

from its previous 56.7% record.” –  Xcel buying an addiOonal 550MW of wind in Colorado “based on low price alone.” –  State RPS expanded and now includes largest RECs, with consumer protecOons and in-‐state

producOon incenOves •  Minnesota

–  Xcel Energy adding 750MW wind •  “The company said the projects are such a good deal that ratepayers will save $225 million over

the projects’ lives.”

Development & Decision-‐making •  Kansas

–  Westar buying addiOonal 200MW wind from KS wind farm, but also raising rates and shiving rate burden to residenOal for coal plant retrofit. Enviro rider allows cost/rate recovery w/o rate case.

–  KCPL not proacOve on wind and fighOng solar RPS in MO, commiWed to coal capacity.

–  Despite approx. 19,000MW of wind cued in the service territory, Sunflower declined very low-‐priced bids for wind capacity, reportedly in order to protect Holcomb 2.

–  In general, KS uOliOes seem to be dragging their feet on wind energy (esp. relaOve to cost, benefits, available resource, and local economic impacts) while invesOng in coal capacity (passing costs, risks & liabiliOes on to KS ratepayers, and providing benefits to coal producing states and transport enOOes).

–  Lack of comprehensive, coordinated, transparent, accountable resource planning?

Leadership & Policy •  Resource Planning

–  Complicated and closed process, liWle public involvement or oversight –  KCC recently received maximum fine for violaOon of KOMA –  KS has no meaningful IRP process

•  RES / RPS –  OpposiOon fueled by parOsan rhetoric and ideological misinformaOon and

influence, funded by market and poliOcal opponents •  Economic Development

–  Historic status quo, poliOcal influence, and outdated energy market analysis too oven drives energy-‐related economic development decisions and opportuniOes. Do we want jobs and investment only for/from one sector?

•  Public Health, Environment, Water –  Shared social benefits are combining with basic market forces and fuel cost

realiOes to encourage regulated investor-‐owned uOliOes to reduce coal dependence for other fuel sources, esp. natural gas and wind

–  Blaming EPA isn’t going to cut it – wind is already lowest cost resource in much of our region, pre-‐regs affecOng coal plants

Key QuesOons / Discussion •  Wind

–  Costs too much? –  Unreliable? –  Not enough available and accessible? –  Ugly? –  The result of gov’t intrusion and market manipulaOon? –  Unproven technology and source? –  Represents ideas/people we don’t trust? –  What’s up with Community Wind? –  Lesser Prairie Chickens and the ESA? –  Tax abatements, incenOves, and PILOTs? –  De-‐commissioning (or replacing) infrastructure at end of life?

•  How do rural communiOes and stakeholders (esp. landowners and ratepayers) get a seat at the table re: electricity resource planning and related economic development?

•  What are the opportuniOes/challenges for KS (esp. rural KS) in a regional electricity marketplace?

•  What role for wind (or other generaOon sources) in a regional electricity marketplace? •  Distributed vs. centralized energy producOon? •  How do we best manage change at this scale and rate? •  How do we (as community, state, interest group) make best long-‐term decisions here? •  How do we remain open to the best available answers/informaOon, rather than pre-‐

determined outcomes?

Wind is uniquely dependent upon gov’t intrusion and market manipulaOon?

FOSSIL FUELS RENEWABLE ENERGY

$72.5 billion $29.0 billion

Federal Subsidies (2002-08)

Notes: *Carbon capture and storage is a developing technology that would allow coal-burning utilities to capture and store their carbon dioxide emissions. Although this technology does not make coal a renewable fuel, if successful it would reduce greenhouse gas emissions compared to coal plants that do not use this technology. **Recognizing that the production and use of corn-based ethanol may generate significant greenhouse gas emissions, the data depict renewable subsidies both with and without ethanol subsidies.Sources: Internal Revenue Service, U.S. Department of Energy (Energy Information Administration), Congressional Joint Committee on Taxation, Office of Management and Budget, & U.S. Department of Agriculture, via Environmental Law Institute.

Infographic by Tommy McCall

$12.2 billion$2.3 billion TRADITIONAL

RENEWABLES

CORN ETHANOL**

CARBON CAPTUREAND STORAGE*

TRADITIONALFOSSIL FUELS

$16.8 billion

$70.2 billion

$5.0

$16.3$53.9

$11.8

$0.3

$2.0$6.2$6.0

(outer ring) (inner circle)

Climate protecting

Damaging

Energy Subsidies Black, Not GreenA study released by the Environmental Law Institute, a nonpartisan research and policy organization, shows that the federal government has provided substantially larger subsidies to fossil fuels than to renewables. Subsidies to fossil fuels totaled approxi-mately $72 billion over the seven-year study period, while subsidies for renewable fuels totaled $29 billion over the same period. !e vast majority of subsidies support energy sources that emit high levels of greenhouse gases when used as fuel. Moreover, just a handful of tax breaks make up the largest portion of subsidies for fossil fuels, with the most significant of these, the Foreign Tax Credit, supporting the overseas production of oil. More than half of the subsidies for renewables are attributable to corn-based ethanol, the use of which, while decreasing American reliance on foreign oil, has generated concern about climate e"ects.!ese figures raise the question of whether scarce government funds might be better allocated to move the United States towards a low-carbon economy.

For press inquiries contact Brett Kitchen at 202-939-3833. Full report text and pdf of this graphic may be found online at: http://www.eli.org/pressdetail.cfm?ID=205©Environmental Law Institute.

Environmental Law InsOtute and the Woodrow Wilson InternaOonal Center for Scholars; Es#ma#ng U.S. Government Subsidies to Energy Sources: 2002-‐2008

What’s up with Community Wind?

•  Economies & efficiencies of scale –  Available capital –  Demand & distribuOon of electricity

•  Regional marketplace & integraOon •  Infrastructure

•  Investment vs. return –  Net metering –  PPA terms

•  Leadership & policy –  Self-‐determinaOon & engagement –  Fuel source compeOOon –  Resource planning – interesOng quesOons re: SPP integrated market

•  AWEA community wind resources –  Community Wind Basics

•  hWp://awea.rd.net/Issues/Content.aspx?ItemNumber=4593

Lesser Prairie Chickens and the ESA?

•  December 2012 -‐ FWS recommendaOon to list the lesser-‐prairie chicken as a threatened species.

•  June 2013-‐ FWS announced it would delay finalizing the decision to list the lesser prairie-‐chicken under the Endangered Species Act unOl the end of March 2014.

•  Concerns over the accuracy of data, so agency soliciOng addiOonal informaOon.

•  According to the results of a seven-‐year KSU study, wind power development does not cause significant impacts to, and may in fact benefit, greater prairie chicken populaOons.

•  AWEA resources –  Issues: Prairie Chickens and Wind Energy

•  hWp://www.awea.org/Issues/Content.aspx?ItemNumber=834

Business

Wind Energy in Kansas / Kansas Agricultural & Rural Leadership program / Norton, Kansas