Who’s Paying for Wind Power? – 10/24/16

Wind power is getting bigger in the U.S.

According to data compiled by the AWEA, installed generation capacity for the renewable energy source nearly doubled in the last five years. In 2015, wind produced 4.67% of all generated electrical energy and it made up 41% of power capacity additions.


The demand for wind power is coming from various parties. Under the Obama administration’s bold environmental policies, federal agencies like the Department of Defense have become a large customer, but the private sector is driving much of the boom.


Tech companies have been particularly aggressive in buying clean power. Amazon.com Inc. recently agreed to buy 90% of the power generated by a 253MW wind farm being developed in west Texas. Apple Inc. Facebook Inc., and Google have made similar moves to directly purchase clean energy for their facilities. Centralized, power hungry data centers give tech companies an advantage in replacing large shares of their power with cleaner sources.

Still, more conventional companies are buying into wind power too. Johnson & Johnson is buying 100MW of capacity from a wind farm also located in Texas. In a 12-year contract, it will buy half the output from the farm. Other big buyers, according to the AWEA, include Wal-Mart, IKEA, and Dow Chemical.


Rural areas are also benefiting greatly from extra income brought in from leasing land for turbines as commodity prices have collapsed.

“One turbine has changed my life,” Ed Woolsey, a fifth-generation Iowa farmer who now leases his farm to others to cultivate, said to Bloomberg. Woolsey was referring to the lease agreements with wind companies which typically net farmers between $7,000 and $10,000 per turbine each year (the median household income was $51,939 in 2013).

Warren Buffett’s MidAmerican Energy is negotiating with landowners for leases to build a $3.58 billion series of wind farms across Iowa, the largest economic development in state history. Iowa got 31% of its power from wind in 2015.



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