Purchase photos

Wind development talks still whirling

10/23/2011

By DAWNE LEIKER

dleiker@dailynews.net

Wind development in Ellis County has been up in the air since 2005, when a proposal for a wind farm southeast of Hays was bypassed by Kansas City Power & Light.

Marked by neighbor disputes, county zoning regulations and economic recession, Ellis County remains a county without active wind energy development. Production tax credits are set to expire in 2012, and Kansas' largest wind farm now is taking shape in southern Kansas.

It begs the question: Will Ellis County's wind resources go untapped?

Ellis County commissioners signed a resolution in May that was greeted favorably by wind developers. The resolution changed required setbacks from 10 times the tip height to 1,000 feet, eliminated noise level restrictions and reduced the notification and protest petition area from 2,000 to 1,000 feet.

"Long term, I think there's going to be opportunity in Ellis County with our current zoning, but it's going to depend on the overall demand for electricity picking up and the wind energy industry stepping into a higher gear," said Mark Bannister of Butterfield Wind.

Slow progress is being made in the process of marketing the Butterfield Wind project to developers, he added.

The construction of the ITC Great Plains 345 KV transmission line through Ellis County is a great long-term asset for wind energy development in Ellis County, as well as the other counties it travels through, Bannister said.

Another cause for his optimism for the overall wind development industry is the continued technological improvements being made to wind generation turbines.

Prices for wind-generated electricity have fallen, according to Bannister, as technology advances make turbines more efficient and manufacturing advances and competition push equipment prices downward.

"The long-term picture is bright, but the short-term picture is uncertain," he said, summing up his view of Ellis County wind development.

Jason Du Terroil, project manager of Hays Wind, which is owned by Iberdrola Renewables, said his company is continuing to pursue a project in Ellis County and hopes to build sometime in the future, although he was unable to name a date. With a focus on finding a buyer for the energy produced, Hays Wind continues to maintain land leases southwest of Hays and collect wind data in Ellis County.

"The real thing is to find an off-take agreement out there," Du Terroil said. "And right now, those are few and far between. Until we find that, we're not going to build."

Low natural gas prices have driven electricity prices down, he said, making profit margins slimmer for wind development companies.

"Ultimately, over the long term, we want to know how much money we're going to make to see whether we're going to get the return we require on the project," he said. "Just plugging into a market with historically low electricity prices isn't necessarily a good way to run a business. There's a lot of risk involved."

In addition, wind development in northern Ellis County is "progressing as planned" for Chicago-based Invenergy, Will Furgeson, wind energy development manager, said in an email statement.

"Recent changes in the county siting regulations are very helpful, signaling that the county is interested in the substantial economic benefits that a wind project can bring," Furgeson said. "Invenergy looks forward to the chance to contribute to the economic development of the area, and to generating clean, renewable energy in Ellis County."

Invenergy's lease agreements with landowners in Ellis County are long-term, giving the company sufficient time to develop and market the wind project, Furgeson said.

Ellis County stands as one of many Kansas counties with a strong wind resource; therefore, a great deal of competition exists for power purchase agreements issued by utilities in the state, he said.

"In the past, uncertainty regarding siting made it difficult for Ellis County projects to compete with similar projects in other counties, but we've been working to update prospective buyers on changes to county siting guidelines, to let them know that Ellis County is open for business."

The potential for wind development remains strong in Ellis County. However, as economic challenges and competition lead to an increasingly more complicated picture, Harold Kraus, longtime Ellis County resident and former county commissioner, pointed out the importance of residents working together toward a common goal.

"The community has to decide to either stop talking about industry or get with the program and make industry work," he said. "That's the bottom line. There's got to be a change of focus of the community, otherwise nobody's going to come.

"We've got to put the welcome mat out."

Wind development projects have gone forward in other Kansas counties throughout the past 10 years and include the counties of Gray, Butler, Ford, Lincoln, Ellsworth, Cloud, Barber, Wichita and Kiowa. A project in Elk County is under construction. Counties with power purchase agreements include Ellsworth, Ford, Hodgeman, Gray, Barber, Kingman, Sumner and Harper.

At a recent energy summit in Wichita, Gov. Sam Brownback urged cooperation between energy industry leaders to create job growth and economic opportunities in wind and other energy development in Kansas.

The summit came a day after an announcement by BP it will build the largest wind farm in Kansas on a 666,000-acre site about 43 miles southwest of Wichita.

Energy industry leaders told Brownback they were willing to work together as long as the state was willing to provide the proper tax incentives.

Analysts at the American Wind Energy Association cautioned in an Aug. 4 press release that without stable government policy, such as an extension of the production tax credit, set to expire in 2012, the industry's recovery will stall.

Project activity and orders for 2013 and beyond are scant because of the lack of a predictable business environment, causing layoffs and even bankruptcies in American manufacturing plants and the supply chain. These struggles for U.S. wind manufacturers only will worsen if Congress allows the tax credit to expire, the AWEA said.

Some wind industry publications appear optimistic Congress will extend the production tax credits for wind energy, according to Bannister. However, projects must be operational before the end of 2012 to qualify for the credit.

Projects breaking ground to be completed by the end of 2012 were started two to three years ago, with data collection, environmental studies, transportation studies and engineering plans taking multiple years.

"The Butterfield Wind Project is not far enough along to complete these steps by the end of 2012," Bannister said. "It was stymied by past zoning regulations, which put Ellis County behind many other counties in development."

Tax credits for energy development appear to be on the budget-cutting table in Washington, Bannister pointed out.

"The wind energy industry does seem to expect that with advances in technology and budget pressures in Washington, that at some not-so-distant date, wind energy will be expected to operate competitively without a tax credit," Bannister said.

The production tax credit, according to Furgeson, is an important tool to encourage development of proven clean energy products. He said the wind energy industry has spurred economic growth and created jobs in states throughout the nation.

"Leaders like Gov. Brownback have taken notice and are advocating for an extension of the PTC," he said, adding the expiration of the credit would jeopardize one of the few manufacturing sectors actively creating jobs.

"We're hopeful that the production tax credit will be extended, and that wind energy can continue to flourish in Kansas," he said.