Buffett-owned utility plans 2GW wind farm in Iowa

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Buffett-owned MidAmerican Energy Co plans to develop a 2GW, $3.6 billion wind farm in Iowa, marking the biggest economic development project in the state’s history and taking its total wind power share to more than 40%.

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The 735.5 MW Horse Hollow Wind Farm, Texas. Photo credit: The Danish Wind Industry Association / Vindmølleindustrien.
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An American utility owned by Warren Buffett’s Berkshire Hathaway has revealed plans to develop a 2GW, $3.6 billion wind farm in Iowa, marking the biggest economic development project in the state’s history, according to Bloomberg.

MidAmerican Energy Co’s proposed Wind XI project, which is currently awaiting approval from the Iowa Utilities Board, is expected to help the state generate more than 40 per cent of its electricity from wind energy.

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Already, 31 per cent of the electricity generated in Iowa comes from wind, more than any other state according to the American Wind Energy Association – although in absolute terms, Iowa is the nation’s No. 2 wind-power producer, with 6,200MW, behind Texas.

MidAmerican – America’s biggest wind-power producer among regulated utilities – said on Thursday that it the additional 2000MW of wind turbines planned would boost its goal of generating 85 per cent of its power from wind, and transitioning away from coal.

The company, based in Des Moines, will use renewable-energy tax credits that Congress extended last December to make the project economically feasible, said MidAmerican Chief Executive Bill Fehrman.

According to Sierra Club’s Beyond Coal campaign director, Bruce Nilles, Iowa’s position in the large Midwest grid means it can export excess wind supplies to other states or import supplies during lulls.

“Wind is always blowing somewhere and this project will benefit the entire region,” Nilles said in a phone interview with Bloomberg on Thursday.

“The beauty of what they’re doing is getting 85 percent of their needs with just wind, which will enable them to shut down remaining coal plants that do nothing for their economy.”

Coal plants, however, remain the leading source of electricity in Iowa, providing 53 per cent of power in 2015, while nuclear, natural gas and hydroelectric power generators produced roughly 16 per cent, according to the US energy department.

Iowa’s Republican Governer, Terry Branstad, has singled out the wind industry as important to the state’s economy, particularly in the creation of thousands of jobs.

Branstad has also noted that the wind farms provide farmers and other landowners in the state with lease payments, while  wind-farm operators pay property taxes, which local governments use for schools and other expenses.

And there are other benefits, he says.

“Many manufacturers would like to tell their stockholders they’re using green energy,” Branstad said in an interview. “It’s a great marketing tool for us.”

According to MarketWatch, Iowa consumers pay about 10c/kWh for power on average, compared with 12 cents nationwide. Large commercial and industrial customers pay about 5-8c/kWh, on average, compared with 6 cents to 10 cents nationwide.

Wind power fetched about $29 a megawatt-hour, or 2.9 cents a kilowatt-hour, on average, under long-term contracts signed last year between power producers and utilities, according to Bloomberg New Energy Finance.

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