A Sempra Energy (NYSE: SRE) subsidiary and BP Wind Energy on April 4 announced that the Flat Ridge 2 wind farm has moved into full construction. Upon completion, the 419-MW project will be the largest wind project in Kansas.
The facility is located on 66,000 acres about 40 miles southwest of Wichita and represents a combined investment of more than $800 million.
As previously announced, BP and Sempra U.S. Gas & Power are equal partners for 419 MW of the wind farm, and are finalizing joint venture agreements for the additional capacity.
BP will be the operator of the Flat Ridge 2 Wind Farm and expansion project when they become commercially operational. Completion of Flat Ridge 2 is expected by the end of the year.
The companies also announced that the power from a 51 MW expansion project to be completed in 2012 has been sold under a separate long-term agreement with Arkansas Electric Cooperative Corporation (AECC), a Little Rock-based generation and transmission cooperative.
Electricity produced at Flat Ridge 2 has been sold under long-term power purchase agreements with Associated Electric Cooperative and Southwestern Electric Power Company, a unit of American Electric Power.
The announcement marks just the latest venture in parent Sempra Energy’s (NYSE: SRE) strategy to develop renewable energy assets nationally, with emphasis on Midwestern wind and Southwestern solar. The plan is well-developed, with Sempra, either on its own or in partnerships, having about 2,000 MW of wind and solar projects operating, under construction or in development.
The strategy was laid out during a March 29 conference with investment analysts.
“We believe that Sempra is well positioned in this because if the PTC (production tax credit) doesn’t get renewed, as looks like may be the case now, then solar is going to be the future for the next several years,” said Sempra Energy CEO Debra Reed. “And you couldn’t have a much better position than we have in terms of solar development.”
Sempra has planned 1,000 MW of solar projects in California, Arizona and Nevada.
Sempra sees renewable portfolio standards in more than 30 states also playing a key role in its portfolio expansion.
But as Reed pointed out, Sempra is looking to spread the risk. The company will stay with the project finance model and look to have 50% partnerships with a diverse project portfolio. The model has been employed with BP Wind, she noted.
Jessie Knight CEO of SDG&E, said the utility is meeting the California RPS. It signed 17 new renewable contracts totaling approximately 1,500 MW. That puts it ahead of the 20% state requirement and the utility is o track to exceed the 25% requirement in 2016.
Its Sunrise Powerlink transmission project is a key part of the renewable energy strategy, with approximately 35% of total renewable deliveries or 15% of retail sales dependent on Sunrise by 2016.
“Upon completion of Sunrise, we will have access to a region that has great potential for incremental wind and solar renewable projects. We look to invest in projects where SDG&E’s financial involvement can lower the overall cost of renewable energy for our customers,’ he said. “Of our $600 million planned investment in renewables, approximately 60% applies to projects that are already approved by regulators.”
Jeffrey W. Martin CEO Sempra U.S. Gas & Power, said previous decisions to avoid solar thermal power have paid off, as PV has dropped dramatically in recent years. And running counter to much of California’s and the federal Department of Energy policy, the company opted to avoid public lands.
BP and Sempra were also collaborators second phase of the Fowler Ridge Wind Farm in Benton County, Indiana. The 200-MW project went online in early 2010.
Its 48-MW Copper Mountain Solar facility, located in Boulder City, Nev., is the largest photovoltaic solar power plant in the U.S. It was completed in late 2010.
The power from Copper Mountain Solar and Sempra Generation’s adjacent 10-MW El Dorado Solar plant has been sold to Pacific Gas & Electric (PG&E) under separate 20-year contracts.
Sempra is expanding its renewable energy portfolio throughout the Western U.S. The company expects to begin construction on the first phase of a 600-MW solar project in Arizona next year, and recently received approval to build a 200-MW solar farm in Kern County, Calif.