A little more than a year ago, criticism and some economic pressure were building around Ameren’s reliance on coal, which accounts for about two-thirds of the St. Louis utility’s power supply.
Renew Missouri, an organization that advocates for increased adoption of renewable energy, released a report titled “Opportunity Blowing By” that emphasized the growing economic advantages of wind energy, and stated that, on the latest earnings call, Goldman Sachs representatives were among multiple investors to ask Ameren officials about the lack of wind in its energy mix.
In September 2017, Ameren filed plans to invest $1 billion in 700 megawatts of new wind power by 2020 – an influx that would equate to about 10 percent of its energy production.
Now, key pieces of that plan are falling into place.
Ameren said Monday that, when completed, it will acquire power from a new 157-megawatt wind farm in Atchison County, in northwest Missouri.
“Our transition to cleaner forms of generation is building momentum,” said Michael Moehn, Ameren Missouri’s president, in a release announcing the move.
Monday’s announcement comes just five months after the company etched plans to build an even bigger Missouri wind farm. In May, Ameren took “its first major step” toward its new renewable energy goals when it announced that it would get power from a 400-megawatt wind farm in northeast Missouri – billed at the time as the largest in the state, once completed.
Ameren said the Atchison County facility would be operational in 2020 – in time for production tax credits to be applied to the project, before they begin to get ratcheted down, the following year.
Financial details for the 157-megawatt project were not disclosed. Based on the company’s initial estimation that 700 megawatts of wind would represent a $1 billion outlay, Monday’s announcement could equal a price tag around $200 million or more.
The project, which will provide power for an estimated 47,000 homes, will be developed by EDF Renewables North America. Ameren said the “planned additions will create approximately 280 jobs at the peak of construction, as well as several permanent jobs when the turbines are in service.”
Even as it has begun to commit to build wind farms, the company’s earlier announcements were met by some pointing out that it is still “one of the most coal-dominant utilities of its size in the country.” Missouri, overall, got 81 percent of its electricity from coal in 2017, and burns more of the material than any state except Texas, according to the latest government data.
Ameren’s long-term plans filed in late 2017 aim for the utility to reduce carbon emissions 80 percent by 2050, compared to 2005 levels.
Both of the company’s planned wind projects still require regulatory approval from the Missouri Public Service Commission and “acceptable” agreements about transmission access – a factor that, at times, can be a key stumbling block.
The company said that the gradual sunset of wind production tax credits starting after 2020 is “certainly a key consideration” that adds some urgency to its push to build up its wind resources.
“I think it really helps for customer value,” Ajay Arora, Ameren’s vice president of power operations and energy management, said of the tax credits. “Projects completed in 2020 get the most and they start to get less and less every year after.”
But he said technological improvements and declining costs mean that wind investment makes sense now, and could carry over even as tax credits are phased out. The company, he said, will evaluate project economics as they go.
“2021 projects may also be viable,” he said. “I don’t think it’s a complete make or break.”
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