Iowa Okays the Nation's Largest Wind Build
A thousand new turbines will be standing in Iowa by the end of 2019. MidAmerican Energy, a subsidiary of Berkshire Hathaway Energy, has demonstrated its commitment to wind energy development time and again, most recently by proposing a 2,000 MW wind project in Iowa, called Wind XI. The unanimous approval of Wind XI by the Iowa Utilities Board on August 29 further illustrates the state’s full embrace of clean energy.
This is not the first wind build in the state, but it is a special one.
As indicated by the project’s name, Wind XI is the eleventh wind project to be developed by MidAmerican. What sets this project apart is the timing and its scale – according to MidAmerican Energy, at over $3 billion this will be the largest single investment in Iowa’s history. And according to the American Wind Energy Association (AWEA), this will be the largest single wind project in the nation to date.
MidAmerican Energy requested the Board’s decision on the project by September 2016. The existing federal Production Tax Credit (PTC) - a 2.3 cents-per-kilowatt incentive - will begin to sunset in 2017, dropping by 20 percent each year through 2020. The credit thus becomes less valuable to those utilities with large-scale wind ambitions. MidAmerican aims to break ground on Wind XI before the end of 2016 to qualify to take full advantage of the full PTC, ambitious with a project of this scale even with a September decision. The August decision by the Iowa Utilities Board will aid MidAmerican's tight timeline.
Why it's important:
Wind XI will add 2,000 MW of wind to a region with a portfolio that relies heavily on coal. While MidAmerican does not plan any new retirements among their massive coal plants, this will help offset and replace some planned retirements in other parts of the region. The project will also move the nation closer to the Department of Energy's mid-term goals: within the Midwest, the DOE's Wind Vision looks to Iowa, with Illinois and Indiana, to lead the nation to a cleaner and more sustainable future. In the shorter term, the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan will limit carbon pollution from existing power plants, and this additional wind will get the state closer to those targets.
An unexpected intervention threatened to derail the project in June.
The Iowa Utilities Board's stamp of approval came after a summer of discussions and a settlement between MidAmerican Energy and several of its major customers that had questions: Google, Microsoft, Facebook, and a group of industrial customers called the Iowa Business Energy Coalition (IBEC).
First, it is important to acknowledge that all three tech companies have demonstrated commitment to clean energy in recent years. Facebook has been openly tracking its carbon footprint for years and has ambitious renewable energy goals. Facebook, Google, and Microsoft have all dropped their memberships in the polluter-funded, climate-denying American Legislative Exchange Council (ALEC). Google has long been committed to cleaning up the energy powering its data centers, from North Carolina to Iowa. Microsoft’s historic leadership in environmental sustainability may lead to transformative, user-friendly, energy-saving options in the gaming world and has led them to invest in wind energy themselves.
These actions would seem to ally the companies with MidAmerican Energy’s clean energy-centric vision.
Traditional parties including state environmental groups, industrial customers, and Iowa’s Office of Consumer Advocate all intervened in the proceedings at the Iowa Utilities Board, as they had done for the preceding ones. However, for the first time in the eleven wind projects, MidAmerican and the Iowa Utilities Board saw a joint intervention by thee three big tech companies with data centers in the state.
Because the viability of MidAmerican’s project – at least, the promise of a net-neutral cost to customers – hinges on the timing of the project, even a small delay associated with these proceedings could have resulted in a scaled-back or canceled project. Thankfully, overcoming concerns about modeling, return on equity, and how the utility would use environmental credits, the large customers and MidAmerican Energy reached an agreement on July 27th with only minor changes from MidAmerican's original proposal.
What does this project mean?
My colleagues Noah Long and Kevin Steinberger refer to Iowa as an example in practice of the achievability of high renewable penetration into our electric grid. They argue that Iowa is proof that we can adopt renewable energy at an aggressive level in order to improve communities' health, protect against unexpected outages at huge, centralized plants, provide more stability in our energy costs, and reduce the dangerous carbon emissions contributing to climate change.
Wind XI may also pave the way for other large wind projects, precisely by demonstrating the feasibility of the technology and its integration into the electric grid at high levels. The project’s approval may also bode well for Alliant Energy’s proposed 500 MW project - an important step for that utility.
MidAmerican Energy's project will get the state 2,000 MW closer to energy independence. Iowa will reach the 40% renewable mark before any other state in the nation, and will provide a model for other states in the region that may have vast, underused resources. Looking at the $3.6 billion investment, the $1.2 billion in landowner easement and property tax payments, the thousands of jobs in construction and maintenance, you would be hard-pressed not to wonder at the delay in fixing the Illinois RPS or the consistent attacks on clean energy goals in Michigan, Ohio, and Kansas. The region should look inward and follow Iowa's lead - else, the state will leave them in its non-coal dust.