Barriers remain to realize state's full wind potential

By John Green Staff writer jgreen@hutchnews.com

There are a couple of potential barriers to wind energy becoming all it can be in Kansas, industry experts say.

Primary among them are limits to the transmission infrastructure that enables delivery of wind power outside the boundaries of the Southwest Power Pool, and regulatory issues on the direct purchase of wind and solar energy.

Lots of potential

Studies show Kansas, in the center of a national wind belt, has the second highest potential for wind power in the United States, behind only Texas.

That's based on how much of the state receives wind speeds averaging at least 16 mph at 50 meters high, in areas both technically and economically feasible for hosting wind turbines.

A 2010 estimate by the National Renewable Energy Laboratory put the state's potential at 952 GW of installed capacity, which could generate 3.64 million GWh of power – 90 times the state's current energy needs.

With growing turbine heights and continuing technological improvements enabling ever lower wind speeds, the state's potential is likely even greater today.

"There are a couple of stages to wind development," said John Hensley, deputy director for industry data and analysis at the American Wind Energy Association. "You have to have a good wind source and you have to have transmission."

Efforts over the past decade have improved and expanded the transmission system that Kansas belongs to, allowing delivery of more wind power within the Southwest Power Pool. The SPP grid serves parts of 14 states in the central U.S., but primarily five states from North Dakota south into the northern edge of Texas.

While there is still opportunity to add more wind to the SPP system, tapping the state's full potential will require exporting power outside of that grid.

The 'Grain Belt Express'

A Houston company has proposed building a series of high-voltage, direct-current transmission lines crossing the country, including one called the Grain Belt Express. Running from southwest Kansas to Indiana, it would carry up to 3,500 MW of Kansas-produced electricity east.

"By the end of this year, we'll have 5,000 MW (of wind)," said Dorothy Barnett, executive director of the Climate and Energy Project. "If that line gets approved, we're talking 3,500 MW more from western Kansas. That line is expected to create $2 billion in economic benefit to the state directly, and another 8 to 10 billion dollars in capital investment. I think it would substantially open the market."

Developing the 780-mile-long powerline requires regulatory approval in all of the states it crosses. Kansas, Illinois and Indiana officials have approved it, but the Missouri Public Service Commission rejected the request in July 2015. That agency conducted further hearings in March and April of this year after one developer, Clean Line Energy, filed a renewed application last August.

"We just completed the hearing and briefings last week," Marc Lawlor, vice president at Clean Line, said earlier this month. "Now it's in the hands of the commission to render a decision."

There is no set timeframe for the board to issue an order, but Lawlor expected one by June.

"Our case was notably different than the last application," Lawlor said. "We presented a lot more facts and evidence on how Missouri would benefit from the project. Specifically, we have a group of customers in Missouri that will take power off the line."

Those customers include a group of 36 municipal electrical utilities who'd buy 185 MW of the power from the proposed 400 MW Iron Star project being developed by Infinity Power in Ford County, and the city of Hannibal, which would buy 15 MW.

"This wind, plus the transmission, would save their ratepayers $10 million per year, every year, in operations," Lawlor said. "That's a function of just how cheap wind is in Kansas and how valuable it is to other parts of the country that don't have this in their backyard. You can't build wind in Missouri and generate power for this price."

Lawlor compared the need and ability to move Kansas "native wind power" through a pipeline to other parts of the county to the movement of gas from the Hugoton Field of western Kansas, or rail lines to move wheat and cattle.

"Certainly it's a market-driven project," he said. "We know there's demand there, which is why developers put money into developing this project. We do have one other deal for a retail provider in Illinois, but the bulk of the line is still to be subscribed."

The company conducted an "open solicitation process" a couple of years ago to show how much interest there was in the power.

"It's a FERC (Federal Energy Regulatory Commission) regulated process to identify interest," Lawlor said. "They want to know if there is interest from suppliers and off-takers. When we did that, we had eight times the amount of capacity notice of interest. That tells us there is strong demand."

Before they can negotiate agreements, however, Lawlor said, the company needs approval by regulators.

"It's hard to get a contract for a product when you don't have permission to provide it," he said.

If approved by Missouri, "the marketplace will decide how soon we get into construction," Lawlor said. "It will be a good 6 to 9 months of negotiation to get the capacity we need. There's a bunch of stuff going on simultaneously, such as environmental permitting, financing for the project, other development milestones that need to happen."

"The Missouri decision is a critical threshold, but after that we have oceans of work to get things in construction mode," he said. "It will be close to a year to see that kind of activity get underway."

Unlike other transmission that's recently been built or upgraded in Kansas, Clean Lines projects are not paid for directly by Kansas ratepayers and other customers in the SPP, but are "merchant lines" paid for by the buyers and sellers of the power, Barnett noted.

The Grain Belt Express isn't the only Clean Line Energy project that could impact southwest Kansas. A project starting in Oklahoma that will take wind energy to Memphis, called the Plains and Eastern, would also tap wind in Kansas near the border.

That project, which is being developed in partnership with the U.S. Department of Energy and has all the necessary regulatory approvals, was included as one of the potential infrastructure projects highlighted as a priority by the Trump administration.

"We're working on getting commercial contracts in place for that," Lawlor said. "There's still some uncertainty out there, but getting recognized as a national priority project is great. It's really helpful. Not just for the Great Plains project, but it proves the concept."

All of the wind that would go on either line is from projects yet to be built, Lawlor said.

"They have the land, they have local permits, but they don't have the market for it," he said.

The Grain Belt Express is a $1 billion project, Lawlor said, which will support $7 billion in new wind development.

"Transmission is the lynchpin for Kansas moving forward," Lawlor said.

Corporate access

The Renewable Energy Buyers Alliance recently reported that that commercial and industrial buyers – like Google, Amazon and Target – accounted for more than half of all signed wind energy purchase agreements around the U.S. in 2015, pushing that market above 5 GW for contracted wind and solar power.

There are significant barriers, however, to making it easy for companies to enter those agreements, with states varying widely on regulatory policies enabling such sales.

"I think that more and more we see businesses wanting to access clean energy, and I think Kansas is poised to take advantage of that new market growth," said Barnett, of Climate and Energy. "Certainly for cheap wind, but also solar power. Kansas is a top 5 solar resource if we can insure that solar has an opportunity to continue to grow."

One of the reasons Facebook selected Nebraska for a new data center, Barnett said, is that it could directly buy wind there.

"Nebraska Public Power created a new tariff so it could buy the wind," Barnett said. "If you are not a utility, we're a regulated state and there is a barrier to letting business buy wind power directly from the wind farms."

An organization called the Retail Industry Leaders Association ranked all 50 states on how easy it was for its members to access renewable energy to meet clean power goals. Iowa led the index rankings, which are based on 15 indicators in three categories. Oklahoma, Virginia and North Carolina joined Iowa as the only states with measurable renewable deployment through both direct utility purchases and offsite power purchase agreements.

Kansas was ranked 21st.

"Even though Kansas has a great wind resource, overall our rating was 21st because we don't have the kind of policy to make it easy to do," Barnett said. "In part it's to ensure power is sold by utilities, but other regulated states have figured out ways to compensate the utilities for selling the power."

She cited Utah as another example.

"There, they buy the electricity from the wind farm, but they pay the utility to use its transmission distribution system to get it there," she said. "The businesses are able to negotiate for price more."

"The availability of retail choice," the study noted, "is a critical factor for a state's attractiveness to corporate and other large institutional buyers of (renewable energy). … States that wish to gain the job creation and economic development benefits of corporate RE-powered facilities should encourage their policymakers and regulators to enable customer choice."