The energy giant BP Plc (BP) has unveiled its plan to build the biggest onshore wind farm in south-central Kansas. This initiative marks the company’s attempt to make most of the present physical and public policies in the U.S., as prospects for wind power industry will likely weaken with the expiry of the federal tax credits in near future.
The $800 million project includes a 419-megawatt (MW) capacity wind farm, Flat Ridge II, spread across 66,000 acres. Flat Ridge II will utilize 262 General Electric Company’s (GE) wind turbines, each with a rated capacity of 1.6 MW, about 43 miles southwest of Wichita. The project will be 100% owned and operated by BP Wind Energy, a division of the U.K. oil major.
The construction is projected to start by the end of 2011, subject to necessary permits. The commissioning is anticipated by the last quarter of 2012. The project is economically feasible as it is expected to employ as many as 500 people at its peak of construction and likely generate over $1 million yearly for local communities without impacting traditional farming.
The company has signed a long-term purchase agreement with wholesale power provider Associated Electric Cooperative Inc for 314 MW of the energy capacity from Flat Ridge II. With three fourth of the capacity being exported to Missouri, Oklahoma and Iowa, BP is aggressively marketing the remaining capacity to other customers in the Midwest.
BP had a planned investment of around $8 billion in alternative energy sources by 2015 but it is estimated to have already invested nearly $7 billion by 2011, $4 billion of which is in the U.S.
For the long term, we remain Neutral on the stock. The company faces tough competition from Total S.A. (TOT) and ConocoPhillips (COP).
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