Wind Energy and Missouri Steve Gaw

Missouri Wind Projects in Missouri Installed Wind Capacity: 459 megawatts (MW). State Rank: Missouri ranks 24th for total MW installed Number of Wind Turbines: 252 turbines Wind Projects Online: 6 wind projects

Missouri Current Wind Generation Percentage of Missouri's electricity provided by wind in 2013: 1.3 percent Equivalent number of homes- Missouri wind farms now power: over 100,000 average American homes

Missouri Wind Generation Potential According to data from the National Renewable Energy Laboratory, Missouri's onshore wind potential at 80 meters hub height is 810,619 GWh and 1,267,920 GWh at 100 meters. State Rank: Missouri has the 14th best wind resource in the U.S with greater potential than Illinois. This means that wind power is capable of meeting more than 9 times the state's current electricity needs.

Missouri Jobs & Economic Benefits An investment in wind power is an investment in jobs, including jobs in operations and maintenance, construction, manufacturing, and many support sectors. In addition, wind power projects produce lease payments for landowners and increase the tax base of communities. Total direct and indirect jobs supported in 2013: 501-1000. State Rank: Missouri ranks 20th for number of wind-related jobs Capital investment: over $960 million dollars   Annual land lease payments: over $1,200,000

Manufacturing Wind-Related Manufacturing The wind industry has over 550 manufacturing facilities producing products for the wind industry that range from blade, tower and turbine nacelle assembly facilities to raw component suppliers including fiberglass and steel. Number of manufacturing facilities in Missouri: 12 facilities

Wind-Related Manufacturing Number of manufacturing facilities in Missouri: 12 facilities

AECI: Currently 600 MWs with 150 MWs under development Bluegrass Wind Farm Gentry County, Missouri

U.S. Annual and Cumulative Wind Power Capacity Growth (Utility-Scale Wind) 61,110 MW, with 1,087 MW installed during 2013 19.5% Annual Growth Rate Nearly 20% of all global wind capacity Source: AWEA U.S. Wind Industry Annual Market Report 2013 For more information on state level installations, see pp. 24-25

Rebound in Wind Installations in 2014 and 2015: Uncertainty Returns in 2016 2014-15 expected to be strong as developers commission projects that began construction in 2013 to receive PTC AWEA: 12 GW of wind under construction BNEF expects 15 GW in 2014-2015 EIA expects 16.7 GW in 2014-2015 Navigant expects 12.3 GW in 2014-2015 2016 and beyond are uncertain: aggressive wind pricing may support higher growth, but multiple headwinds Lack of clarity about federal tax incentives Low natural gas & wholesale electric prices Modest electricity demand growth Limited near-term demand from RPS policies 11 11

Wind Capacity Installations, by State The 61,110 MW installed in the U.S. is spread across 39 states and Puerto Rico. 16 states now have more than 1,000 MW installed. TX #1 with 12,354 MW CA #2 with 5,829 MW IA #3 with 5,177 MW IL #4 with 3,568 MW OR #5 with 3,153 MW OK #6 with 3,134 MW Source: AWEA U.S. Wind Industry Annual Market Report 2013 For more information on state level installations, see pp. 24-25

Wind Energy Share of Electricity Generation, by State A record-breaking 4.1% of U.S. electricity came from wind power during 2013. Wind energy generated more than 25% of the electricity in IA and SD. In total, the generation in nine states was more than 10% ERCOT: 9.9% Source: AWEA U.S. Wind Industry Annual Market Report 2013, Energy Information Administration For more information on wind energy generation, see pp. 18-19 and 26-28

Wind as Leading New Energy Source Wind energy was the primary choice for new power in wind-rich regions between 2011 and 2013, delivering approx. 60% or more of all new electric generating capacity in the Pacific Northwest, Plains states and the Midwest. In the upper Midwest, wind delivered over 80% of all new capacity. In regions where wind or renewable energy were not the primary new source of generating capacity, natural gas combined cycle units were the main alternative choice. In the regions of Mid-Atlantic, New York, and Southeast, natural gas was the largest source of new electric generating capacity, delivering 67% of all new capacity between 2011 and 2013, with natural gas combined cycle units serving as the primary technology. Source: AWEA U.S. Wind Industry Annual Market Report 2013 For more information on generating capacity additions, see pp. 15-17

Electric Utilities Pursue Wind Energy A record number of PPAs were signed during 2013. Utilities from Maine to California signed over 60 PPAs for more than 8,000 MW of new wind capacity. Much of the wind PPA activity centered around the upper Midwest down through the Plains states and Texas. Utilities signed PPAs in excess of their RFPs, citing historically low contract prices and a strong hedge value. Source: AWEA U.S. Wind Industry Annual Market Report 2013 For more information on utilities and PPAs, see pp. 38-43, 103-105

Investment into the U.S. Economy Source: AWEA U.S. Wind Industry Annual Market Report 2013 For more information on wind investments, see pp. 48-49 and 70-71

Estimated Land Lease Payments Source: AWEA U.S. Wind Industry Annual Market Report 2013 For more information, see pp. 46 and 67-73

U.S. Manufacturing Sector Growth 560 wind-related manufacturing facilities - spread across 43 states. Annual U.S. production capacity of wind turbine nacelles stands at more than 12 GW. The domestic content of wind turbines has grown from less than 25% prior to 2005 to approximately 72% at the end of 2012. Source: AWEA U.S. Wind Industry Annual Market Report 2013 For more information on wind-related manufacturing, see pp. 62-65 and 106-125

Why Wind? Public Policy Hedge: Wind energy contracts can be used as a long-term hedge against volatility in fossil fuel prices and environmental regulations. Environment: Wind is a zero polluting and non-carbon emitting energy resource that uses no water to produce power. Diversity-Security: Enhancing energy security and diversifying the electric generation portfolio. Price: Wind energy is providing prices that are competitive with other new generation options, and has been shown to reduce prices to consumers. Economic Development: Billions have been invested as a result of wind development producing jobs, increased tax base for schools and local communities.

Missouri State Policy  A 2008 ballot initiative replaced the existing state targets with a mandatory renewable electricity standard (RES) requiring 15 percent of 2021 generation of the state’s investor-owned utilities to come from renewable resources.

Insuring the Risk “There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know.” Donald Rumsfeld

Wind Energy and Diversification: Insuring against the known unknowns Fuel Price Volatility Fuel Transportation Risk Water Shortages Environmental Policies

Wind Power Price Trends Lost Creek Wind Farm

Historical Cost of Wind Energy Wind cost per kwhr has declined 90% since the early 1980’s With or without PTC? Source: NREL Cost Curve, in Black & Veatch Report, October 2007

Why have costs decreased? Capital Costs Improved energy production Technological advancements Better understanding of siting Transmission access

Advances in Turbine Technology Industry continues to advance technology in several areas, from improved siting techniques to larger rotor diameters and taller towers that are increasing energy production across the country. Taller wind turbine towers and hub heights as well as larger rotor diameters capture more energy, allowing better wind energy resources to be tapped. With new technology, new regions for development have rapidly emerged in recent years, with states including Indiana, Ohio, Michigan, and New England states such as Maine seeing wind project installations as a result of both new state policies that foster such development as well as improved industry technology. Source: AWEA U.S. Wind Industry Annual Market Report 2013 For more information on turbine trends, see pp. 57-60

Lower Costs and Better Capacity Factors Enable Aggressive Recent PPA Pricing Lowest prices we have ever seen in the U.S. market, despite the trend towards lower-quality wind resource sites in general 27

Wind Prices: Below the Current & Expected Future Cost of Burning Fuel in Natural Gas Plants 28

Consumers Price Benefits Flat Ridge 2 wind power could lower SWEPCO customer bills in 2013 by roughly $.05 per monthly bill for customers using 1,000 kilowatt hours and $.11 per monthly bill in 2014.” – SWEPCO Alabama Power, a subsidiary of Southern Company, is “absolutely looking for more wind power” to import from Midwestern states. Noting that Alabama does not have good wind resource. “Wind energy is cost-effective for the utility’s customers and helps diversify its fuel mix.” - Michael Sznajderman of Alabama Power. Don Ford, director of renewable business solutions for Westar, said the utility has an agreement to own 200 megawatts of the farm’s generation for 20 years. Westar’s share of the farm won’t produce 200 megawatt hours of power every day because of wind conditions, he said, and the utility will pay by the kilowatt hour at a set rate. The cost per kilowatt hour from the new wind farm will be lower than the cost from previous wind projects, Ford said, though he declined to specify the cost. It is higher than the cost from Westar’s coal-fired plants, but less expensive than its natural gas plants, he said. “That dollar amount is lower than any of the wind power we’ve purchased before,” he said. Westar already has a transmission line in the area of the planned wind farm, according to the news release. Construction is scheduled to start in 2015, with electricity coming online in 2016.

Utilities on Wind Midwest “We’ve found a way to meet the state of Minnesota’s renewable energy standard early and reduce costs at the same time ... Expanding Bison will add to our renewable energy supply, resulting in the lowest cost resource over time by capturing the benefits of the extended production tax credit and a competitive turbine market” Al Hodnik, chairman and CEO of ALLETE after announcing the expansion of their Bison Wind Energy Center Interior West "It works out to a very good levelized cost for our customers,…These prices are so compelling, the energy [cost] associated with it is less than you can do locking in a 20-year gas strip.“ - Xcel Energy, Ben Fowke, Xcel President and CEO. The Colorado and Minnesota public utility commissions approved wind PPAs totaling 850 MW. Xcel Energy expects to pay about $25/MWh to $35/MWh over 20 years for the recently approved wind power purchase agreements Source: AWEA U.S. Wind Industry Third Quarter 2013 Market Report

Water Consumption Savings from Wind Energy Water is used for cooling at thermal (i.e., natural gas, coal, and nuclear) power plants. By directly reducing the use of fossil-fuel generation, wind energy can dramatically reduce electric-industry water consumption. In 2013, wind energy generation led to water consumption savings of 36.5 billion gallons - equivalent of roughly 116 gallons per person in the U.S. or conserving the equivalent of 276 billion bottles of water. Source: Forthcoming AWEA U.S. Wind Industry Annual Market Report Year Ending 2013

Avoided CO2 Emissions from Wind Energy In 2013, wind generation avoided an estimated 95.6 million metric tons of carbon dioxide (CO2)— the equivalent of reducing power-sector CO2 emissions by 4.4%, or taking over 16.9 million cars off the road. The 12,000 MW of wind power capacity under construction at the end of 2013 would reduce another 20 million metric tons of carbon dioxide (CO2) when it is operational — the equivalent of reducing power sector CO2 emissions by another 1%. Source: Forthcoming AWEA U.S. Wind Industry Annual Market Report Year Ending 2013

Thank You! Steve Gaw Lost Creek Wind Farm