$400 MILLION WIND FARM PROJECT BEGINS
Construction is moving forward on a more-than $400 million wind farm project, despite the scheduled sunset of state wind tax credits.
Enel Green Power North America (EGPNA) announced this week it had started construction of the Thunder Ranch wind farm. The 298 megawatt facility is scheduled to be built on 60,000 acres near Billings that covers portions of Garfield, Kay and Noble counties, according to EGPNA.
Work is moving ahead on the project even though it won't benefit from tax credits originally planned for when it was designed.
Under legislation signed by Gov. Mary Fallin on April 17, tax credits for wind energy construction will sunset on July 1, three-and-a-half years ahead of the previous sunset date of Jan. 1, 2021.
In a provided statement from EGPNA the company said it was moving ahead with Thunder Ranch without the tax credits.
"The development of the Thunder Ranch wind farm has been a multi-year process and Enel Green Power North America put in place and secured agreements with certain assumptions," the statement read. "Additionally, the company has already invested a great deal of resources and planning in the development of this wind facility. EGPNA is honoring its business and financial commitments, and therefore we are proceeding with construction."
The project, with a projected price tag of $435 million, is scheduled to be complete and enter service by the end of 2017.
According to an EGPNA press release, the wind farm will be capable of generating more than 1,100 gigawatt-hours of power annually — equivalent to the energy consumption needs of more than 89,400 U.S. households — while avoiding the emission of about 790,000 tons of carbon dioxide each year.
Thunder Ranch is EGPNA's 10th wind farm project in Oklahoma including Chisholm View I and II, which operates in northern Garfield County and southern Grant County. According to EGPNA figures, the company has a wind power capacity of more than 1.1 gigawatts in the state, with an overall investment of almost $2 billion.
EGPNA has not yet announced end customers for the Thunder Ranch power production, but according to a company statement the wind farm will connect to an OG&E substation near Red Rock, in Noble County.
Thunder Ranch is expected to create approximately 400 construction jobs at peak construction, and around 20 full-time ongoing jobs, according to the EGPNA statement.
Outlook for future wind investment
In its statement provided to the News & Eagle, EGPNA noted it was moving ahead with Thunder Ranch despite changes to "certain assumptions."
NextEra Energy Resources, another major player in wind energy construction in the state, also stated this week it is moving ahead with planned projects despite the early loss of tax credits.
"As for our company … our business model hasn't changed," said NextEra manager of communications Bryan Garner in a statement provided to the News & Eagle. "We continue to develop low-cost and efficient renewable energy projects and the market for wind energy is strong.
"NextEra Energy Resources has been doing business in Oklahoma since 2003," Garner wrote. "We have 13 operational wind farms in Oklahoma and we have invested nearly $4 billion in the state. We are continuing to develop and build wind farms in Oklahoma."
While companies are pressing ahead with projects in which they've already invested considerable sums of money, wind power advocacy group The Wind Coalition president Jeffrey Clark said future investment may suffer without the tax credits.
"I think certainly the change has made Oklahoma less competitive for investment," Clark said.
He said cutting tax credits will affect not only state and national investors, but also large international conglomerates like Enel Green Power that can take their projects to other states, or other countries.
"By phasing out the incentives we're going to see projects that would have been economically feasible in Oklahoma — and we're talking hundreds of millions of dollars — flow to other states," Clark said. "That's just reality."
Clark said the end of wind tax credits isn't a surprise to wind power developers, since the credits were scheduled to end in 2021.
"People have been making preliminary investments for years in Oklahoma knowing the incentives would end," Clark said.
But, he said, moving the deadline up after projects already are planned and started could have lasting implications for future investment in the state.
"Investors — and not just in wind energy — are going to be looking at Oklahoma and asking, 'Is the state of Oklahoma a reliable partner in my investment?'" Clark said.
Clark said he sees three paths being taken by wind producers in the state.
"You are seeing some projects that are near completion trying to get completed (before the July 1 deadline), you are seeing projects that won't be completed in time that will be hurt by the end of the incentives," Clark said, "and, you are seeing some projects that made sense a year ago that will now be going to other places."
Story provided by: Enid News & Eagle
Written by: James Neal
2020 Willow Run Suite 100
Enid, Oklahoma 73703