Wind blown: MidAmerican zeroes in on 100% renewable energy

MidAmerican's already enormous appetite for wind power is only going to grow.

The state's largest utility is in the midst of a $3.6 billion investment that over the next couple of years will erect 1,000 more turbines on top of the 2,020 it already has around the state.

When it is done, the Des Moines utility's share of its energy that comes from renewable sources will catapult from 55 percent to nearly 90 percent.

But already, the utility craves more — looking to get 100 percent of its energy from renewable sources such as wind.

It would take about $2 billion and 550 turbines more to bring MidAmerican close to 100 percent, said CEO Bill Fehrman, who has led the Berkshire Hathaway subsidiary's march into renewable energy.

"It would set a new precedent for the U.S.," said Daniel Shurey, an analyst at Bloomberg New Energy Finance. "It will require a company that really knows what it's doing.

"It will be challenging for them to provide security of supply, and that's not something MidAmerican will take lightly."

MidAmerican isn't alone in wanting more wind energy. Cedar Rapids-based Alliant Energy, the state's other big power producer, expects its wind energy share will grow to about 30 percent within seven years.

Wind energy helps keep electricity costs down, Fehrman said, noting that MidAmerican has agreed to freeze rates until at least 2029.

"There's not another utility in the country — gas, water, cable, electric — that's held rates steady for 12, 13 years," said Fehrman, adding that MidAmerican's rates have increased only once since 1998. They're the ninth-lowest nationally.

"A lot of that is because of the wind investment," Fehrman said. "The beauty of wind is there's no fuel costs.

"We will be able to virtually serve 89 percent of our customers' needs with an energy resource that requires no fuel."

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Bloomberg's Shurey said utilities are investing big now in wind because of the federal production tax credits, subsidies that are expected to phase out by 2020.

But the drivers of wind development will shift over time from policy to "pure economics."

Ferhman admits federal and state tax credits help make wind energy viable. But he said it soon won't need them to be competitive with fossil fuels.

MidAmerican, owned by Warren Buffet's Berkshire Hathaway, received $249 million in federal tax credits last year. The company said the credits are poured back into wind developments.

Power plants still needed

Of course, the wind doesn't always blow in Iowa; nor does the sun always shine.

Until scientists develop a way to store renewable energy, MidAmerican will rely on coal, natural gas and other forms of energy during those production valleys, Fehrman said.

"You can't cover minute to minute, hour by hour," he said. "In between, energy is supplied by the system" — the generation and transmission network that moves electricity to MidAmerican and other regional utilities.

"As our loads go up and down, there are other plants" that fill in the gaps when wind isn't producing energy, he said.

And taller turbines and longer blades produce energy more consistently, so fewer gaps need to be filled, said Michael Fehr, MidAmerican's vice president of resource development.

Wind gives customers a "significant competitive advantage," Ferhman said. The green energy is helping companies such as Deere & Co., Google and Facebook meet environmental sustainability goals.

MidAmerican has asked the Iowa Utilities Board to approve a program that certifies for customers the amount of energy originating from renewable sources. Last year, it was 47 percent.

"Really, our own customers are pushing our drive into renewables," he said, adding that its wind energy goes to the state's customers first.

"If they need more than that, we go to coal, then to gas," he said. "That's in order of cost."

Alliant's wind goals

Alliant Energy, Iowa's second-largest utility, has less aggressive plans for transitioning to wind energy. By 2020, the company wants half its energy to derive from emission-free sources. By 2030, Alliant wants to reduce carbon dioxide emissions by 30 percent compared to 2005 levels.

By 2024, the utility plans for wind to make up 31 percent of its energy portfolio in Iowa. In 2016, it made up 14 percent.

Ben Lipari, Alliant's director of wind development, said tax credits have played a "key role" in making wind viable. With tax incentives, it's the cheapest energy source.

But Lipari says wind will remain an important energy source even after the tax credits expire. Costs for turbines are declining, and technology has improved efficiency.

Turbines installed eight years ago generate 1.65 megawatts. Those installed today on a similar footprint produce 2.5 megawatts each, Lipari said.

"Those factors and others will allow wind, I believe, to continue to be competitive, regardless of what may happen with production tax credits," Lipari said.

Iowa's vast wind capacity

The capacity for new wind development in Iowa remains vast.

Planned transmission capacity will help both MidAmerican and Alliant transport the energy it produces from new wind farms that open in 2019 and 2020.

"But beyond 2020, there will need to be additional transmission upgrades," Lipari said, "or new transmission lines to allow for a lot of additional wind capacity after that point."

Jonathan Naughton, a professor of mechanical engineering and director of the Wind Energy Research Center at the University of Wyoming, said wind is already standing on its own. Coal plants are closing because of consumer demand, he said.

Coal is still the largest source of fuel used to generate electricity in Iowa, followed by wind. But coal's share fell to 47 percent last year from 76 percent in 2008.

"The market has taken over," Naughton said. "It’s the market that wants wind."

Of course, not everyone is a fan. Growing pockets of Iowans have come out against the huge turbines.

And President Donald Trump has rallied for reviving coal production, calling the wind turbines near his Scottish golf course a blight.

Still, Naughton doesn't foresee any substantial policy shifts that would hamper market demand for wind energy.

"I think his hands are tied," he said of the president. "As much as you might want to legislate against wind, what are you going to do? Legislate that the wind doesn't blow?"

And despite growing opposition, Fehrman said wind is helping rural Iowa.

By 2046, the utility will pay $1.5 billion in local county property taxes. Through 2016, it's paid $65 million.

"There's nobody else that can do this," said Fehrman, whose company will have poured $10 billion into wind since 2004. "There's not another company out there that's providing this kind of economic support for local schools, local governments and the people who live there through property taxes."