 | 2/27/2014 | Austin City Council approves new wind contract to reach renewable energy goal |
The Austin City Council approved a new wind energy contract today that positions Austin Energy to achieve its goal of delivering 35% of all of its electricity from renewable sources four years ahead of its goal and making it the leader for all large public power utilities in the country.
The contract with Lincoln Renewable Energy calls for Austin Energy purchasing up to 300 megawatts of wind power for 18 years for $31 million a year. The price for the wind power is in the $26 per megawatt-hour to $36 per megawatt-hour price range, making it the least expensive wind purchase Austin Energy has ever entered into since it began contracting for wind power in the late 1990s. The price is lower than the $32/MWh average cost for all power in the Electric Reliability Council of Texas in 2013 and will not increase customer bills.
The new wind project consisting of 160 wind turbines will be built in Castro County, Texas and is projected to come online in the fourth quarter of 2015. The new project is in addition to two other new projects that Austin Energy entered into contracts with last year to purchase wind power. Those two projects by Duke Energy are 200 MW each and are scheduled to come online in 2015 and 2016, respectively. The 300 MW Castro County project replaces a 170 MW project that was approved last year but did not materialize.
When the three new projects are all online, Austin Energy will have about 1,350 MW of wind power in its portfolio – helping Austin Energy achieve its 35% renewable energy goal in 2016 – four years ahead of schedule. Austin Energy also currently has about 50 MW of solar power and 112 MW of biomass.
“The new wind contract has come at a good time and at a good price to meet our renewable energy goal early,” said Larry Weis, Austin Energy General Manager. “Both persistence and patience have paid off.”
The new wind contracts are the last Austin Energy expects to enter into before 2020 since it has reached its renewable energy goal and will now concentrate its efforts at achieving it solar energy goals – which includes installing 200 MW of solar by 2020 with half of that installed locally.
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| 2/20/2014 | Austin Energy pursues $558M wind energy deal |
Austin Energy is moving forward with a new, larger contract to replace a wind power agreement that fell through last year.
The deal, if approved by City Council and by Chicago-based Lincoln Renewable Energy LLC, would have Austin pay $31 million each year for 18 years in exchange for 300 megawatts of wind-generated electricity. The total contract is worth a maximum of $558 million.
If the deal is finalized, the city would purchase the full output of Lincoln Renewable's new 160-turbine wind farm located in Castro County in northwest Texas. The farm is expected to be completed in the fourth quarter of 2015.
Austin Energy had originally attempted to sign this contract with the North American branch of E.ON Climate and Renewables, but the Chicago-based company pulled out of the deal citing finance and tax issues after Council approved the contract last June.
In addition to switching providers, Austin Energy has upped the size of the contract from 170 megawatts to 300 megawatts. While the total price tag is higher, the terms are more favorable – about an improvement of $2 per megawatt-hour over the original deal's range of $28 per megawatt-hour to $38 per megawatt-hour, according to city staff.
The larger purchase is intended to take advantage of the federal production tax credit, which provides wind projects a tax credit of 2.3 cents per kilowatt hour. The credit expired at the end of last year and may not be replaced, potentially raising the cost of production for future wind projects. City staff has recommended taking the larger deal to take advantage of the lower prices while they're still around.
The deal would also push Austin Energy further toward its long-term goal of 35 percent of its energy from renewable sources by Dec. 2020. In June 2013, Council also signed two 200 megawatt wind-power deals with Charlotte, N.C.-based Duke Energy Corp. (NYSE: DUK).
Lincoln Renewable's contract was evaluated through the city's request for proposal process. The company's proposal was selected from 70 competing offers from 44 new or existing wind projects. Council will vote on the deal at its Feb. 27 meeting.
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| 12/26/2013 | Another wind farm digs in before tax credit expires |
Higher Power Energy LLC, based in Flower Mound, spent years securing leases and an interconnection agreement for a 300 megawatt wind farm in Castro County, southwest of Amarillo.
Now, Chicago-based Lincoln Renewable Energy will actually build the wind farm, which will have more than 100 General Electric turbines spread out over 35,000 acres.
The Hereford 2 project started construction before the end of the year so it will be eligible for the federal production tax credit.
"The start of construction of the Hereford 2 project marks the continuations of a very successful year for Lincoln Renewable Energy," said Philip Moore, Lincoln's vice president of development.
It will feed into the Sharyland Utilities Windmill substation where it will connect to new transmission lines that will carry it to major cities like Dallas-Fort Worth. These special utility lines are called Competitive Renewable Energy Zones (CREZ).
Oncor, an electric delivery company based in Dallas, built 1,000 miles of CREZ lines that carry electricity from far flung pastures in West Texas to metropolitan areas where it’s needed. Statewide, the project included 3,500 miles of new transmission lines.
"We are particularly pleased to see another CREZ-enabled project commence construction and congratulate the (Texas Public Utility Commission) and transmission providers on the continued success of CREZ in bringing low cost, clean energy to Texas customers and providing economic development in the wind-rich Texas panhandle," Moore said.
Higher Power Energy worked since 2007 to secure leases from 48 landowners and conducted wind studies, which help determine the best placement for the turbines.
The wind industry is supported by the production tax credit, which offers 2.3 cents per kilowatt hour for qualifying projects built during a certain time frame. Congress last renewed it on Jan. 1, 2013 after weeks of uncertainty.
"Our industry still faces uncertainty in the medium and long term and needs Congress to address that next year," Rob Gramlich, senior vice president of public policy for the American Wind Energy Association."The legislative vehicle could be tax reform, an extenders package or something else, but ultimately our industry will begin to feel the impacts of uncertainty in 2014."
Mark Patkunas, CEO of Higher Power Energy, said the wind industry expands and contracts based on whether the production tax credit is in place.
"It's tough to operate in this market in the U.S. with the tax credit unfortunately coming and going all the time,"Patkunas said.
The billionaire Koch brothers are leading an industry-wide fight urging Congress not to renew the production tax credit for 2014.
"The wind industry has very little to show after 20 years of preferential tax treatment: it remains woefully dependent on this federal support. Yet despite this consistent underperformance, Congress has repeatedly voted to extend the PTC, usually in 1- or 2-year increments," the group wrote in a letter to federal lawmakers. "This year, Congress should break from the past and allow the wind PTC to expire as scheduled, once and for all. Americans deserve energy solutions that can make it on their own in the marketplace—not ones that need to be propped up by government indefinitely."
Governors from 11 states wrote a letter in support of the credit, including Kansas. But Texas Gov. Rick Perry was not on the list, though Texas produces by far the most wind of any state.
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| 11/26/2013 | EDF Renewable Energy Acquires Hereford 1 Wind Project |
EDF Renewable Energy today announced it has acquired the 200 megawatt (MW) Hereford 1 Wind Project in the Texas Panhandle from Lincoln Renewable Energy and construction has commenced.
Encompassing approximately 15,000 acres in Deaf Smith County, southeast of the town of Hereford, the project will take advantage of the CREZ (Competitive Renewable Energy Zone) transmission lines connecting the wind generating capacity of the Texas Panhandle to high electricity demand areas in the state. EDF Renewable Energy has also secured a long-term, fixed-price hedge agreement for the expected energy production.
EDF Renewable Energy presently has 561 MW of wind capacity either in construction or ready-to-build in the State of Texas.
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| 11/25/2013 | Lincoln Renewable Energy commences construction of 300 megawatt Texas wind project |
Lincoln Renewable Energy (LRE), a developer of U.S. solar and wind projects, today announced the commencement of construction of its 300 megawatt (MW) Hereford 2 wind power project located in Castro County, Texas. Located 50 miles southwest of Amarillo, the project will connect into the Sharyland Utilities Windmill substation.
“The start of construction of Hereford 2 project marks the continuation of a very successful year for Lincoln Renewable Energy,” said Philip Moore, VP of Development at Lincoln Renewable Energy. “To date we have commenced construction on 30 MW of solar and 500 MW of wind power projects in California and Texas.”
The project will be located in a Competitive Renewable Energy Zone, or CREZ, geographic areas identified by the Public Utilities Commission of Texas to encourage wind power development and connect them to large cities with high electricity demands via new transmission lines.
Moore added, “We are particularly pleased to see another CREZ-enabled project commence construction and congratulate the PUCT and transmission providers on the continued success of CREZ in bringing low cost, clean energy to Texas customers and providing economic development in the wind-rich Texas panhandle.”
”Hereford 2 is a huge boost to Castro County, bringing jobs and investment that will grow the local economy,” said Commissioner Tim Elliot of Castro County. “We are delighted to have Lincoln Renewable Energy build this project that will benefit our community and provide power to Texas homes and businesses.”
Lincoln Renewable Energy partnered with Higher Power Energy LLC, a Dallas-based project developer, on both phases of the Hereford projects.
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