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Long reliant on oil and gas, Oklahoma is emerging as a leader in renewable energy

Source: 
Daily Oklahoman

Apr. 2—A number of sweeping wind farms are being erected on the rolling plains of northwest Oklahoma as part of a $2 billion project by Invenergy.

Another wind project owned by Duke Energy Renewables in the northern part of the state just went online this month.

And earlier this year, ALLETE Clean Energy announced it made power purchase agreements with two Fortune 500 companies for energy it will produce from a project it is developing in southwestern Oklahoma's Caddo County.

The projects represent continued growth involving renewable energy investments in Oklahoma and other states, even as clashes between backers of traditional fossil fuels and clean energy enthusiasts are spotlighted after severe winter storms in Oklahoma and Texas earlier this year.

Oil and gas proponents argue the push for renewables could put large numbers of workers out of jobs and increase energy costs for everyone.

But companies remain interested in making those types of investments. And President Joe Biden's announcement this week of an aggressive infrastructure plan that includes proposed federal dollars for additional wind and solar energy development suggests that trend will continue.

Mark Yates, vice president of the Advanced Power Alliance, said this week still more projects could come to fruition in Oklahoma.

About 11 gigawatts (GW) of solar and storage projects being developed inside of Oklahoma have applied for approval from the Southwest Power Pool (SPP) to feed power onto the grid, Yates said. SPP is the regional transmission operator that oversees grid operations across the Great Plains.

"It gives you an idea of how attractive Oklahoma has become as a home for renewables because of the resources we have available," Yates said.

Duke Energy Renewables added another 350 MW to the energy generated by wind projects operating in Oklahoma earlier this month when it took its Frontier II Windpower project operational.

Frontier II is the second phase of a project the Duke Energy unit started years ago. Its original Frontier Windpower project, which has a 200 MW nameplate capacity, went operational in 2016.

Together, the projects (when running at total capacity) generate enough energy to power about 193,000 average-sized homes.

Duke relied in part on virtual power purchase agreements it executed with AT&T and Ball Corp. to help finance Frontier II's construction.

A typical virtual power purchase agreement is a type of renewable energy contract that provides the buyer with a financial hedge against future energy cost fluctuations.

The buyer gets renewable energy certificates up front it can use either to meet energy cap requirements or to sell on a market where the certificates are traded.

Additionally, the buyer gets to count the renewable energy it agreed to buy toward achieving its sustainability goals.

The seller, in turn, gets up-front money to help build the project and a guarantee it will make specified amounts of money from the project's energy output (that amount can fluctuate based upon actual market prices at the time the energy is produced). Still, that guarantee helps it underwrite other needed financing.

Ultimately, the projects bring renewable energy onto the grid, which benefits customers of utilities, cooperatives and other entities that use the power through its typically affordable costs.

Chris Fallon, Duke Energy Renewables' president, said the company appreciates the agreements it reached with its corporate partners, noting they "further demonstrate how we can address the community's need for clean energy resources while providing unique sustainability solutions for our customers."

Wind energy in Oklahoma

— Oklahoma continues to be among the leading states in the nation when it comes to generating renewable energy.

— Of the electricity generated inside the state in 2020, wind generated nearly 42% — up 2% from the year before — saving Oklahoma energy customers $1.2 billion, according to the Oklahoma Power Alliance.

— Oklahoma produced the third-most wind-generated electricity nationally in the same year, the alliance reports, and it estimates the state's solar energy potential is ranked sixth best in the nation.

— Also of note from the report is that wind projects were the top taxpayer in 65 of the 73 state school districts where they operated during the year.

— Renewable projects also support communities through leasing payments to land owners and even through charitable contributions made by renewables owners/operators toward worthwhile causes.

— Renewable energy generation and its ability to meet load on SPP's grid continues to set records.

— On March 29, SPP reported that renewables (mostly wind) set a peak generation record of nearly 22.7 GW early in the day, plus set a record the same morning by supporting more than 84% of the grid's load (wind's share of that was more than 80%, also setting a record).

One of AT&T's executives said the communications firm is an enthusiastic backer of the technology.

"At AT&T, we believe renewable energy is good for the planet, for our business, and for the communities we serve," said Scott Mair, its engineering and operations president. AT&T, he continued, has contracted with developers to obtain more than 1.5 GW of renewable energy to support its operations.

Ball Corp. officials, which makes aluminum packaging products for the beverage, aerosol and aerospace industries, said the company entered into its contract with Duke Energy Renewables as part of its commitment to reduce its greenhouse gas emissions by 55% between now and 2030.

During peak construction, Frontier II created about 250 jobs and increased local spending in the service and construction industries that boosted local tax revenues.

The 999 MW Traverse Wind Energy Center is one of three projects that makes up the North Central Wind Energy Facilities unit that will cover parts of six counties in northwest Oklahoma.

Public Service Co. of Oklahoma and Southwestern Electric Power Co., both subsidiaries of American Electric Power, are buying the completed projects and will use the energy they produce to help supply affordable electricity to their customers in Oklahoma, Arkansas and part of Louisiana.

But Invenergy had to obtain $2 billion of needed financing to build the three projects, first.

Financing deals to build the companion 287-MW Maverick Wind Energy Center and the 199-MW Sundance Wind Energy Center were inked at the end of last year.

All three projects, covering parts of Blaine, Custer, Garfield, Kingfisher, Major and Woods counties, currently are being built and will become operational between now and the end of 2022. When operating at full capacity, they will generate enough electricity to power 440,000 average-size American homes.

"The close of construction financing for the Traverse Wind project, Invenergy's largest wind development to date, is a significant milestone," said Meghan Schultz, Invenergy's senior vice president of finance and capital markets. "This transaction, in addition to the recent Maverick and Sundance financial closings, is a testament to Invenergy's strong lender relationships and financing capabilities as well as the compelling value of wind investments."

ALLETE Clean Energy, developer of a 303 MW project in Caddo County, announced earlier this year it obtained virtual energy sale agreements with Oshkosh Corp. and Hormel Foods to help build that project.

The company now has virtual power purchase agreements from three companies to help it get the project up and running.

ALLETE said the windfarm will double its capacity to serve an accelerating demand for clean energy from the corporate world, and officials thanked landowners, communities and state lawmakers for their support of the industry.

"We're proud to work with two leading upper Midwest corporations to help them achieve their sustainability goals with Caddo's renewable energy," said Allan S. Rudeck Jr., ALLETE Clean Energy's president. "Projects like Caddo help diversify and decarbonize the nation's energy supply while strengthening local economies."

Officials at Oshkosh Corp., which builds specialty vehicles and access equipment, said they focus their sustainability efforts in four core areas that include empowering people, building communities, innovation, and creating a sustainable future. It seeks to reduce its facilities' greenhouse gas emissions by 25% between 2014 and 2024.

"Involvement in projects such as the Caddo wind site is one of many ways that we continue to further our sustainability goals," said Kevin Tubbs, Oshkosh's chief ethics, compliance and sustainability officer.

Hormel Foods, meanwhile, recently announced it seeks to match 100% of the energy it uses with renewable sourcing by 2030. Hormel officials said the Caddo wind site will help the company achieve around 50% of its goal when the project is completed.

"Using renewable sources like wind not only helps the environment, but it makes long-term financial sense, supports local communities and demonstrates that we are committed to being good stewards to the planet," said Tom Raymond, Hormel's director of environmental sustainability.

Meanwhile, ALLETE Clean Energy and five other partners earlier this year made $105,000 in grants to three southern-Oklahoma school systems to help them out with COVID-19 expenses. Partners included Crowe and Dunlevy, Sheppard Mullin, an international law firm based in Los Angeles, Burns and McDonnell, a construction engineering firm based in Kansas City, Missouri, Apex Clean Energy, a renewable energy developer, and Red Hot Construction, a subcontractor it works with to build wind farms.

ALLETE Clean Energy acquired the Caddo project and another one called Diamond Spring from Apex recently.

Wind project owners, builders and operators across the state make similar charitable contributions often. Just this month, Duke Energy Foundation made $35,000 in grants to extracurricular programs at various Kay County school districts, officials said.

As for the Caddo county plant, ALLETE Clean Energy estimates its project will provide more than $50 million in tax revenue and $54 million in payments to landowners during its operational life (the industry average is 25 years).

Caddo's approximately 110 turbines will produce enough energy at full capacity to power the equivalent of about 110,000 homes and increases ALLETE Clean Energy's total operating, under construction and build-transfer wind energy projects to more than 1,450 MW of nameplate capacity.

It created about 200 construction-related jobs and will provide between 12 and 15 permanent jobs once the plant is up and running at the end of this year.

"ALLETE's strategy of sustainability in action is powered by clean energy projects such as Caddo," said ALLETE President and Chief Executive Officer Bethany Owen.

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(c)2021 The Oklahoman

Visit The Oklahoman at www.newsok.com

Distributed by Tribune Content Agency, LLC.

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