There’s energy blowing in the wind, and City Utilities officials are aiming to capitalize.
The city of Springfield has increased its wind energy use 21 percent over the last four years and officials are eyeing a target of a 40 percent renewable energy source by 2019 through wind farm contracts.
They’re banking on a partnership with regional transmission group Southwest Power Pool to realize that target, and they say it’s fueled by favorable pricing.
CU has committed to buying 1.1 gigawatt hours of wind energy over the next two decades at an annual cost of $24 million in fiscal 2019, said Cara Shaefer, CU’s director energy services and renewables. The Little Rock, Arkansas-based nonprofit SPP works with 97 customers, including municipalities like CU, vertically integrated utility companies and cooperatives in 14 states, mostly in the Midwest region.
SPP spokesman Derek Wingfield said the wind energy sector is booming from the more than 175 wind farms under its management. He said the farms have 9,000-10,000 turbines.
“It has grown significantly over the last decade,” Wingfield said. “That appetite for wind has not diminished yet.”
In January, CU signed a 20-year contract with SPP member Diamond Vista wind farm for 100 megawatts, or 197,000 megawatt hours.
“Those wind contracts are less than 2 cents per kilowatt hour,” Shaefer said. “That’s such a low cost for us. That’s lower than what we can generate with our own units here.”
The $400 million Diamond Vista farm under construction near Salina, Kansas, is projected to deliver 10-12 percent of the city’s renewable energy, according to CU data. Massachusetts-based Enel Green Power North America Inc. is slated to complete the project in early 2019, according to Enel’s website.
A decade of wind power
CU’s first wind energy contract signed with the SPP was in 2009. It’s a 20-year deal with member Smoky Hills wind farm, also near Salina, for 50 MWs that’s estimated to produce 186,000 MWhs in fiscal 2019. According to CU’s annual budget, which City Council approved Sept. 24, the utility is buying the wind power for 4 cents per MWh.
“At that time, it was attractive pricing, but it’s come down dramatically since even 2009,” Shaefer said, noting the rates CU pays Smoky Hills have reduced by half in the last decade.
The third CU wind energy contract is a 22-year deal with Frontier Windpower in Oklahoma signed in 2016 for 200 MWs. It’s estimated to bring in 740,600 MWhs in fiscal 2019, according to the CU budget.
As renewable energy purchases increase, CU officials say coal power is decreasing.
“We expect it to be about 45 percent of our total portfolio,” Shaefer said of CU’s shift to wind energy by 2023.
Coal use for 2018 is projected to come in at 39 percent of system sales with a projected decrease to 28 percent in 2019.
“Most of those renewables are intermittent,” Shaefer said. “The sun doesn’t always shine and the wind doesn’t always blow, so you have to have some base load capacity out there to make sure we have enough power when those instances happen.”
CU’s first venture into the renewable energy sector was the construction of a 100-foot, 10-kW wind turbine at its TecHouse on North Prince Lane in 2003.
“It was really research and development for us,” Shaefer said. “We just don’t have the wind resources here – it produced energy 4 percent of the time.”
Even after signing the Smoky Hills contract in 2008, CU still generated 77 percent of its energy through coal locally five years later in 2014. At the time, according to CU documents, only 8 percent came from renewables and 13 percent came from SPP market purchases, which is reserve energy bought through the SPP. The following year, the switchover to renewables boomed.
“This is when we started to take James River Power Station off of coal completely,” Shaefer said.
In 2015, market purchases in the SPP almost tripled from the previous year, going to 30 percent from 13 percent.
“They opened up what was called an integrated marketplace at that time,” Shaefer said. “Really, what that meant was that everyone who’s generating power within that line, you’re bidding in what your cost is to produce that energy on an hourly basis and they decide which units are going to run based on cost.”
When James River Power Station eliminated coal production in 2016, coal energy generation dropped below 50 percent usage for the first time ever in Springfield, Shaefer said.
“The next year was an aha for us,” Shaefer said.
The city’s renewable energy jumped to 29 percent in 2017 from 10 percent in 2016.
The energy stream kept climbing in 2018 with 32 percent of total system sales, according to CU data.
“I just know that with what we have today, we’re very well positioned for anything that happens in the future as far as environmental regulations,” Shaefer said.
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