American Electric Power to Invest $4.5 Billion in Wind Farm Project -- Update
July 26 2017 - 8:36PM
Dow Jones News
By Russell Gold
American Electric Power Co. said Wednesday that it will spend
$4.5 billion to develop one of the largest single wind farms in the
U.S. and a related 350-mile transmission line.
The investment is the latest sign that U.S. wind power projects
are beginning to attract serious money, even in the heart of oil
and gas country, as they become more competitive with other sources
of electricity.
When complete, the 2,000-megawatt project in the Oklahoma
Panhandle would also be one of the largest single purchases of
renewable energy by a utility company.
AEP said it had a deal with Invenergy, a privately held firm
based in Chicago that had been developing the wind farm, to
purchase the project.
AEP will also build a 350-mile dedicated transmission line to
take the power to Tulsa, from where it will be distributed
throughout the region, to serve homes and businesses in Texas,
Oklahoma, Arkansas and Louisiana.
The move continued what has been a swift transition to other
energy sources for the Ohio-based power company, which derived the
overwhelming majority of its electricity from coal a decade ago but
has since been investing in natural-gas and renewable-energy
projects.
"AEP is moving to a cleaner energy future, driven by new
technologies and the expectations of our customers and
shareholders," the company's chief executive, Nick Akins, said in a
statement.
AEP spokeswoman Melissa McHenry said the project made financial
sense because "it is cheaper for the customers in that area for us
to add this project as opposed to other generation."
The company estimated the project, called Wind Catcher Energy
Connection, would support 4,000 direct and 4,400 indirect jobs
annually during construction and 80 permanent jobs once
operational. It also estimated it would contribute roughly $300
million in property taxes over its life.
The announcement is the latest in a string of big investments in
wind. Earlier this month, Pacificorp, a Pacific Northwest utility
owned by Warren Buffett's Berkshire Hathaway Inc., said it would
spend $3.5 billion on wind and transmission projects.
In March, Minnesota based Xcel Energy said it would spend $4.2
billion to build 11 new wind farms that would total 3,380 megawatts
of generating capacity.
Last year, MidAmerican Energy Co., also a Berkshire Hathaway
unit, said it would spend $3.6 billion on wind energy in Iowa.
The investments in wind should come as no surprise, says Jason
Bordoff, director of the Center on Global Energy Policy at Columbia
University.
"Even when you look at wind without subsidies in the places with
the best resources, it competes very well," he said. "Over time
renewables are becoming cost competitive on their own."
The AEP project is expected to be completed by the end of 2020.
That would qualify it for full wind subsidies. In 2015, Congress
voted to begin stepping down wind subsidies, but projects that
begin construction soon will still qualify for the full
subsidy.
The wind farm will be one of the largest, if not the largest,
single wind farm in the U.S., but remains only about a quarter of
the size of the giant Gansu Wind Farm in China, near the Mongolia
border.
Write to Russell Gold at russell.gold@wsj.com
(END) Dow Jones Newswires
July 26, 2017 20:21 ET (00:21 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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