According to the Chinese animal zodiac cycle, 2016 is the year of the Red Monkey. According to legend, the "Monkey contains Metal (relation to gold) and Water (wisdom, danger)...Metal is related to Wind (change). Therefore events in 2016 will change very quickly."
The Year of the Red Monkey couldn't be more fitting for the opportunity wind energy will play this year. 2016 is the year to act on wind power in a big way, but the clock is ticking. At the end of 2015, Congress passed a long-term extension of the federal Production Tax Credit (PTC). Starting next year, this key federal incentive will reduce in value by 20%, and over the next three year, phase out completely. That's why utilities like MidAmerican, which serves power in the midwest, have asked the Iowa Utility Board to approve its request by mid-September to secure 2,000 megawatts of wind energy so that it can take full advantage of the extended PTC before the reduction begins. MidAmerican plans to receive 85% of its electricity from wind energy.
Many utilities across the south also recognize the opportunity to secure wind power as a part of their portfolio. In fact, 3,000 megawatts of wind energy power purchase agreements are already in place with utilities in the south and many of these companies are planning to secure more renewables like wind energy.
Here is a preview of some of the upcoming request for proposals (RFPs) for renewable energy projects in our region:
- South Mississippi Power Association (SMEPA) recently announced 400 megawatt renewable energy request for proposals.
- In January, Georgia Power released a long-term plan that includes purchasing of 425 megawatts of utility-scale renewable energy; however, the utility provided an additional analysis showing that 2,000 megawatts of wind energy would provide substantial benefits to its ratepayers.
- In August, the Tennessee Valley Authority published a long-term plan that identified a need for "between 500 and 1,750 MW by 2033, depending on pricing, performance, and integration costs. Given the variability of wind selections in the scenarios, evaluate accelerating wind deliveries into the first 10 years of the plan if operational characteristics and pricing result in lower-cost options." On Monday, TVA announced a request for information for renewable energy.
- Entergy Louisiana will soon be releasing a 200 megawatt request for proposals as part of its long-term planning strategy. Its sister company, Entergy Arkansas, has already released a 100 megawatt RFP for renewable energy.
- Southwestern Electric Power Company (SWEPCO) will be releasing a 200 megawatt RFP for wind energy resources, specifically because of the low cost of wind energy resources.
- Associated Electric Cooperative Inc. just released an RFP days ago to secure up to 300 megawatt of wind energy.
- Alabama Power has issued an RFP for up to 500 MW of renewable energy.
- At the beginning of 2016, Appalachian Power "issued pre-qualification documents for parties interested in bidding on an up-coming Request for Proposal (RFP) for up to 150 megawatts (MW) of wind power."
We applaud these utilities for taking action on wind power, but some of the timelines for selecting and securing these power purchase agreements are beyond 2016. Utilities in the south that remain on the sideline this year aren't just missing out on a great opportunity for their ratepayers, they risk losing billions of dollars in wind energy savings as the PTC phase out begins in 2017.
It's clear that 2016 is the Year of the Wind. These winds of change are blowing quickly, so the time is now for the south to get on board before it's too late.