In the US, the American Clean Energy and Security Act of 2009 has passed the House of Representatives Energy and Commerce Committee, and will be presented for a vote by the entire House
Two key provisions in the bill require electric utilities to meet 20% of electricity demand through renewable energy sources and energy efficiency by 2020, and reduce carbon emissions by more than 80% by 2050, compared with 2005 levels. If passed, it would mark a dramatic change in US policy and stimulate growth in alternative energy markets, especially wind. BP is well-positioned to take a leadership role in this growth market.
Wind richMany of BP’s large US wind projects, such as Flat Ridge, Kansas, are located in the central plains, where the wind conditions are ideal.
Driving on state route 52 in Benton County, Indiana, on a sunny day, I gaze out of the passenger window and can see for dozens of miles in every direction. Here, in the fertile plains of America’s heartland, the landscape is made up of vast fields of corn, wheat, and soy; the only break in the flat horizon is an occasional white farmhouse.
Suddenly, a wind turbine appears. Then another. And another. It is as if I am riding through a forest of towers. We drive on for another mile, then five, then eight, and still I am surrounded by giant white ‘trees’, their steel trunks soaring to the sky, and their fibreglass branches moving gracefully with the wind.
Covering 20,000 hectares (50,000 acres), the $800-million Fowler Ridge I wind farm is one of the largest wind power facilities operating in the US Midwest today. Phase I, which came online in March 2009, generates 400 megawatts (MW) of carbon-free electricity – enough energy to power some 120,000 average American homes. “The Fowler I wind farm will deliver approximately 1.25 billion kilowatt hours of clean, renewable electricity every year, and brings new revenue streams to rural communities without impact to traditional farming and grazing practices,” says John Graham, president, BP Wind Energy.
The wind business is surprisingly similar to oil exploration and production. BP meterologists search for the wind resources, land managers secure the rights to use the resource. BP developers work to obtain permits to build the facility, purchase equipment from manufacturers, work with contractors to construct the site, and connect it to a transmission line to transport the power to customers – similar to pipelines in natural gas. One difference between the two businesses is that it only takes six to nine months to complete the build-out of a wind farm, at which point you are generating a long-term cash return for your shareholders. And, says Graham, “20 years from now, we will still be generating cash as we utilise an energy source that is a renewable resource.”