Historically Dependent Upon Oil and Gas, Oklahoma is Embracing Renewable Energy

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The Power of Abandoned Oil Wells

It used to be that while driving across Oklahoma, one would find drilling rigs flourishing with work. With changing times comes changing scenery. That includes windmill farms populating the northwestern sector of the state due to Invenergy’s $2 billion investment. They, however, are not alone.

While Duke Energy Renewables wind assets went live earlier this month in the northern quadrant of the state, ALLETE Clean Energy made an announcement during the first quarter of the year that it has partnered with two Fortune 500 companies for energy produced from its own project in Caddo County.

Although oil and gas supporters have vocalized opposition, renewable energy in Oklahoma remains steadfast and shows significant growth. Still, disagreements exist along with the fear of increased energy costs and the loss of jobs.

Jumping on the Renewables Bandwagon

Despite fears and concerns regarding the transition of energy production in the future, companies see opportunity in investment. The Biden administration’s announcement has solidified interest with its infrastructure plan that allocates federal funds for the development of wind and solar energy projects.

Serving as the Vice President of the Advanced Power Alliance, Mark Yates proposed additional projects could find traction in the state. The Southwest Power Pool has seen applications for the development of 11 gigawatts of storage and solar projects.

“It gives you an idea of how attractive Oklahoma has become as a home for renewables because of the resources we have available,” said Yates.

Duke’s Frontier Phases

Duke Energy Renewables contributed an additional 350 MW to Oklahoma’s wind operation by initiating its Frontier II Wind Power project and bringing it online. While the original Frontier project was born in 2016, it offered a 200 MW capacity. Frontier II is the second phase of an already successful project.

When operating at total capacity, the combination of the two phases can source power for approximately 193,000 moderately sized homes. Duke sought assistance to see these projects come to life and depended upon virtual power contracts enacted with AT&T as well as Ball Corporation.

Virtual Power Purchase

Virtual power purchases encompass the provision where the buyer receives a financial hedge against the fluctuation in future energy costs. It is a renewable energy contract that stipulates the buyer receives renewable energy certificates upon irritation of the contract, and it can be utilized to fulfill energy-cap requirements. These certificates, which are traded, can also be sold on the market. Assisting in achieving its sustainability goals, the buyer can count that renewable energy it originally agreed to purchase.

The seller benefits by receiving upfront money that can be used to fund the project. Additionally, the seller experiences a guarantee that it will make a stated profit energy output of the project. The guarantee, in turn, assists in underwriting additional financing.

The end result is that renewable energy finds its way onto the power grid, and the affordable costs experienced greatly benefit utility and cooperative customers, as well as any other businesses that harness this power.

Noting that appreciation has been felt by Duke Energy Renewables for its corporate business associates, the company’s president, Chris Fallon, indicated clean energy resources can be met while simultaneously providing their customers sustainability continuity.

Oklahoma Wind Energy Stats

  • The state finds itself in the nation’s leading group of those who generate wind energy.
  • Wind was responsible for approximately 42% of the electricity generated within Oklahoma and saved customers nearly $1.2 billion.
  • The Oklahoma Power Alliance reported that the state was ranked the third-most-wind-generated electricity on a national level and estimated the potential for solar energy is ranked at sixth place within the nation.
  • Wind projects were found to be the top taxpayer in 65 state school districts.
  • Renewable energy projects assist communities through leasing payments made to landowners and also by charitable donations offered by renewable owners and operators.
  • Renewable energy has not lost momentum in setting records to meet the power grid’s needs.
  • March 29th of this year experienced intriguing data results indicating that renewables, with wind in particular, generated almost 22.7 GW on that day. That same morning also saw an astonishing 84% of power generation to the grid made by renewables.

Future Balance with Fossil Fuels

While the benefit of renewable energy is growing more evident as the energy industry diversifies, peaceful coexistence must be achieved with oil and gas. To fully meet the needs of an energy-dependent world, a combination of sources will be necessary to fully accommodate the globe.

While economic stimulus can be found in scenarios like ALLETE Clean Energy’s estimated $50 million in tax revenue and $54 million in landowner payments, renewable energy continues to prove its worth. Capacity generation is speculated to fulfill the needs of 110,000 homes.

While jobs have remained a continued concern for many, Oklahoma wind energy projects are expected to contribute in a positive way with the creation of approximately 200 construction positions. Once the plant is fully operational, between 12 and 15 permanent jobs will need to be staffed.

“ALLETE’s strategy of sustainability in action is powered by clean energy projects such as Caddo,” said Bethany Owen, ALLETE’s President and CEO.

Time will tell how renewable energy will deliver results. While planning and initially phased projects promise significant success, Oklahoma will continue to display loyalty for oil and gas. With the state not forgetting where it came from regarding oil and gas and then partnering with its renewable energy capabilities, it shows the proper balance needed to fully meet the needs of the public and give credence to all areas of contribution.

 

 

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