Southern Goes West for wind power
Major utility Southern Power chose to go west for its first owned wind facility, a 299-MW project in Kay County, Oklahoma-the largest single-phase wind farm in Oklahoma-which was developed and is operated by Apex Clean Energy.
By Diane Mettler
It's always exciting to see a company enter the world of wind power, and Southern Power, a subsidiary of the Atlanta-based Southern Company, has done it in a big way. Its first wind project is one of the largest constructed in Oklahoma.
In March 2015, Southern Power announced its intent to acquire its first wind project-the 299-megawatt Kay Wind facility located in Kay County, Oklahoma, which is capable of producing enough energy to power the average energy needs of approximately 100,000 households. Although owning a wind project was new to the Southern Company, renewable energy production was not. Since 2012, Southern Company has added or announced more than 3,800 megawatts of renewable generation. Currently, Southern Power, a leading wholesale energy provider, and its subsidiaries own or have the right to own 34 facilities operating or under construction in nine states, with more than 10,400 MW of generating capacity in Alabama, California, Florida, Georgia, Nevada, New Mexico, North Carolina, Oklahoma, and Texas.
Subsidiaries may self-build renewable generation facilities, or in the case of the retail operating companies, enter into power purchase agreements for energy and environmental attributes from facilities fueled by renewable resources. They may retain the right to use the generated energy as renewable energy for customers and retire the environmental attributes. At their sole discretion, they may also choose to sell the energy and the associated environmental attributes-separately or bundled together-to third parties.
"Southern Company first earned a reputation as a national leader in renewables through Southern Power's investments in utility-scale solar," says Chris Kellar, director of acquisitions and renewables for Southern Company. "Through the acquisition of the Kay Wind project, Southern Company has further diversified its generation portfolio by expanding to a region with abundant wind resources. The Kay Wind project was a mature project with experienced developers, suppliers, and vendors and fits Southern Power's business strategy of growing its wholesale business through acquiring and building generating assets substantially covered by long-term contracts."
The site was ideal-agricultural and cattle-grazing land accessible to major highways, interstates, railroad facilities, and transmission facilities.
Like all successful projects, the skills and experience of great partners and the working relationships between the partners make the difference. For the Kay Wind project, Southern Power looked to the expertise of companies such as Apex Clean Energy, an independent renewable energy company based in Charlottesville, Virginia, which focuses on building utility-scale generation facilities. In fact, Apex brought three other wind projects online in 2015: Hoopeston Wind in Illinois, Balko Wind in Oklahoma, and Cameron Wind in Texas. Two more of its Oklahoma projects, Grant Wind and Kingfisher Wind, are expected to begin operations in 2016.
"As the developer, Apex Clean Energy had already secured all governmental approvals. And the construction team developed a plan to minimize schedule impact on the project due to weather-related events," says Kellar. "Blattner Energy Inc. served as the engineering, procurement, and construction contractor."
Blattner Energy came with lofty construction credentials, having built a wide variety of wind, solar, and energy storage projects. It has been active since then, but as of May 2015, Blattner Energy had more than 25,000 MW of wind power installed or under contract in North America.
Apex Clean Energy had already secured a $397 million construction loan for the project just prior to the Southern Power acquisition and was reporting Kay Wind was expected to create 150 local jobs during construction and more than a dozen high-quality long-term jobs throughout operations.
Construction got underway in August 2015, and although Southern Power wasn't involved in the day-to-day construction of the project, it did have a permanent presence to ensure the project was built to company specifications. "The selection of solid equipment and reputable vendors is an important part of our project assessment process," says Kellar.
The project utilized 130 SWT-2.3-108 wind turbines manufactured by Siemens Energy Inc. In addition, Siemens also signed a long-term service and maintenance agreement for the facility, which includes provision for remote monitoring and diagnostic services.
"We were proud to work with our customer Apex Clean Energy on this project, which gives us the chance to strengthen our position in the U.S. wind market," said Thomas Richterich, CEO of Siemens Wind Power and Renewables Division Onshore.
Each turbine was mounted on top of an 80-meter-tall tower and has a 108-meter, three-blade rotor connected to a generator. The AC power from the generator is modulated at 60 hz by a converter. Multiple wind turbines are connected in parallel to the main power transformer where the energy is converted to the prescribed interconnection voltage.
|Southern Power's 299-megawatt Kay Wind facility in Kay County, Oklahoma, is capable of producing enough power to meet the average energy needs of approximately 100,000 households.|
The large facility went up fast.
Kay Wind became operational in December 2015. Kellar says the project came in on time, and Apex Clean Energy currently operates and maintains the facility.
The electricity and associated renewable energy credits (RECs) generated by the facility are being sold under 20-year power purchase agreements with Westar Energy Inc. in Kansas, which serves nearly 700,000 customers and is the state's largest electric utility, and Grand River Dam Authority (GRDA), Oklahoma's state-owned electric utility, producing electricity that touches 75 of the 77 counties in the state.
Westar Energy contracted for approximately 199 MW, while GRDA contracted for approximately 100 MW. Both companies will have the option to either keep or sell the RECs.
When the facility began producing power in December 2015, the Kay Wind megawatts changed Oklahoma's standing, moving it to number two in the country, in wind power capacity additions for 2015, according to the American Wind Energy Association (AWEA). In fact, as of the end of 2015, Oklahoma was the #4 wind power producer in the U.S., with 5,184 MW of wind power.
|State||4Q 2015||2015 Total|
Those who have driven through the blustery state know that Oklahoma has a huge resource for wind, especially in western regions. As a resource, AWEA reports that Oklahoma's wind ranks No. 9 in the U.S.
The association also noted that in 2013, 14.8 percent of the electricity generated in Oklahoma came from wind power, which means the state ranked No. 7 nationally and ranked No. 4 for total wind-energy generated-10.8 million megawatt hours.
|Southern Power and its subsidiaries own or have the right to own 34 renewable energy facilities operating or under construction in nine states, with more than 10,400 MW of generating capacity in Alabama, California, Florida, Georgia, Nevada, New Mexico, North Carolina, Oklahoma, and Texas.|
In fact, it was estimated that enough wind energy was produced in Oklahoma in 2014 to power 1.1 million homes, and it's expected that number will rise to 1.9 million homes by 2030.
Specific to Kay Power, the project is expected to boost the Kay County economy and support local schools, while helping to reduce rates for energy consumers in the Southwest Power Pool (SPP) system.
According to the economic impact analysis conducted by the Economic Impact Group (EIG), an independent consulting firm associated with the Meinders School of Business at Oklahoma City University, Kay Wind is expected to contribute a total of $480 million to the local economy over the next 25 years. This figure includes both direct and multiplier economic effects.
In fact, it was reported that due to the potential jobs to be created by the wind industry, several state technical schools are looking into programs to train and certify workers in repairing and servicing wind turbines.
The schools would like to train students for many of the maintenance jobs, both in the state and with companies that own wind farms in other states, but it's unclear how many wind technicians are actually needed. Some industry officials say one technician is needed for every 10 wind towers. Education officials say it's more like one for every four.
Currently, Oklahoma State University offers an associate in applied science degree in wind turbine technology that is geared toward entry-level supervisory positions.
Southern Power is stepping into wind in the state at a great time. By 2030, Oklahoma could be the second-largest wind power generator in the U.S., say officials at the Department of Energy and state Department of Commerce.
Southern Power has already announced the acquisition of its second wind facility-the 151-megawatt Grant Wind facility in Oklahoma, upon its successful completion in 2016.
"It is through projects such as these that Southern Power supports Southern Company's efforts to strategically develop clean, safe, reliable, and affordable energy for customers," says Kellar. "Southern Power seeks appropriate business opportunities that meet the company's conservative business model.
"Southern Power's Oklahoma projects fit the company's business strategy of growing its wholesale business through acquiring and building generating assets substantially covered by long-term contracts, not just in Oklahoma, but across the United States."
The projects all fit well with the company's commitment to community. "The community involvement at each of Southern Power's plants, as evidenced by their service to the greater community, is consistent with our corporate culture," says Kellar. "As projects move toward commercial operations, Southern Power will work with the plant manager and operations staff to share in the community involvement and engagement. We are committed to our customers and communities. This approach is integral to how the Southern Company system conducts business," said Kellar.