AEP Sustainability - Renewables


According to the U.S. Energy Information Administration (EIA), roughly 36 percent of new generation sources brought online in the U.S. in 2018 were renewables. This marks the first time since 2013 that renewables accounted for a minority of new generation capacity in the U.S. Despite this recent slowdown, renewable energy sources are becoming further integrated into the national energy mix as technology advances and customer demand for clean power increases.

Transmission is important to connecting renewables to the grid. Electric Transmission Texas (ETT), a joint venture between AEP and Berkshire Hathaway Energy, is interconnecting renewable generation in Texas at an impressive rate. For example, the Public Utility Commission of Texas (PUCT) issued a final order in September 2018 approving the Foard City Wind Project in less than four months. The new 345 kV transmission line in Foard County, Texas, will interconnect the 350 MW Foard City Wind Farm facilities to the grid. The project is expected to be placed in-service in May 2019.

As renewable energy becomes a larger part of AEP’s clean energy future, we asked a sampling of our customers about their preferences. Prior to announcing two new solar projects totaling 400 MW in Ohio, AEP Ohio commissioned a study to better understand customers’ attitudes and expectations for renewable energy. Navigant Consulting found a strong majority of customers believe it is important we make greater use of renewable energy, supporting our IRPs and energy strategy. Our new sustainability goal is to increase regulated renewable energy on our system by approximately 8,000 MW (per our integrated resource plans and pending regulatory approval) by 2030 and continue to expand competitive, contracted renewables. However, AEP needs support from state regulators to be able to invest in clean energy resources within our regulated utilities.

In September 2018, AEP Ohio filed a plan with the Public Utilities Commission of Ohio (PUCO) to support the development of 400 MW of solar power in the state’s Highland County as part of a 2016 commitment to develop 900 MW of renewable resources in the state. This filing represents the single largest clean energy commitment in Ohio history and would more than double the state’s renewable generation capacity. If approved, the projects would add 4,000 construction jobs and 150 permanent jobs, add approximately $24 million in new state tax revenue, and save customers an estimated $200 million over the 20-year life of the project compared with other sources for electricity.

AEP Ohio currently receives renewable generation service from the Wyandot Solar Farm near Upper Sandusky, Ohio; Fowler Ridge in Benton County, Indiana, and Timber Road in Paulding County, Ohio. Wyandot produces 10 MW of energy, and Fowler Ridge and Timber Road each produce about 100 MW.

As technology advances, we envision universal solar or wind projects that incorporate low-cost energy storage to minimize or smooth intermittency on the grid and increase reliability. We are working with some of our large customers on this type of approach because it can provide a dual benefit of clean energy and resilience for the customer and the grid. As we do this, we are protecting the universal access to the grid that we believe all customers deserve.

We continued efforts to expand our regulated renewable portfolio across our service territory. Based on current resource plans, up to 3,766 MW of solar energy and 5,050 MW of wind energy additions are projected to come online between 2020 and 2030.

Southwestern Electric Power Company (SWEPCO) and Public Service Company of Oklahoma (PSO) are currently evaluating proposals for new wind energy projects expected to be operational by the end of 2021. SWEPCO is seeking to add up to 1,200 MW of wind energy, and PSO is seeking up to 1,000 MW of added wind capacity. These new projects will comprise multiple smaller-scale installations, each with at least 100 MW in capacity.

Projects must qualify for at least 80 percent of the federal Production Tax Credit, and those that are selected will be reviewed by the appropriate state and federal regulatory commissions. SWEPCO and PSO anticipate filing for regulatory approval in the third quarter of 2019. The new projects will add to SWEPCO’s 469 MW of existing wind energy through power purchase agreements with facilities in Texas, Oklahoma and Kansas, and PSO’s 1,137 MW of existing wind energy in Oklahoma.

In November 2018, Appalachian Power (APCo) began seeking proposals to acquire up to 200 MW of new solar energy projects in Virginia. This is in response to the Virginia Senate’s passage of Bill 966, requiring APCo to build or acquire new solar generation before 2028.

In early 2019, the Virginia State Corporation Commission (SCC) approved APCo’s proposal to provide its customers with the opportunity to purchase 100 percent renewable energy at a modest premium. The renewable energy will come from APCo’s existing or planned renewable resources. Participants who use 1,000 kWh of energy per month will pay an additional $4.25 per month.

Meanwhile, Kentucky Power issued a request for proposals (RFP) in 2018 to add up to 20 MW of solar energy to meet growing customer interest in renewables. The project will be located within Kentucky Power’s service territory and is expected to be operational by the end of 2021.

In 2018, AEP Renewables formed a joint partnership to re-power roughly 350 MW at two previously wholly-owned Texas wind farms, Desert Sky and Trent Mesa.

As we balance our resource portfolio mix with renewables, we are looking beyond our traditional service territory for investments. We offer low cost of capital and energy project expertise to potential partners, creating attractive solutions to energy customers. This is especially appealing to companies, universities and municipalities that often have their own renewable energy goals.

Between 2019 and 2023, we plan to invest $2.2 billion in contracted renewables to provide the energy solutions our customers desire. In April 2019, we acquired Sempra Renewables LLC and its 724 MW of operating wind generation and battery storage assets. This accelerates our contracted renewable strategy and expands our total renewable portfolio to 16 percent of our 2019 generating capacity mix, making AEP the seventh largest utility owner of competitive wind projects in the U.S.

The deal includes seven operating wind farms in Colorado, Hawaii, Indiana, Kansas, Michigan, Minnesota and Pennsylvania, and all have long-term power purchase agreements in place for 100 percent of the energy produced. In addition, AEP Renewables signed a separate agreement to purchase a 75 percent stake (227 MW) in the Santa Rita East Wind Project currently under construction near San Angelo, Texas.

In 2018, AEP Renewables formed a joint partnership to re-power roughly 350 MW at two previously wholly-owned Texas wind farms, Desert Sky and Trent Mesa. The project re-powered and/or replaced 207 aging wind turbines with new equipment, resulting in a 20 percent increase in annual energy production. AEP Renewables owns 79.9 percent of the project, or 261 MW.

Today, AEP Renewables portfolio includes 351 MW of wind and solar. With the acquisition of Sempra Renewables and the mid-2019 completion of the Santa Rita wind farm, the portfolio will grow to 1,302 MW of renewable generation.

OnSite Partners

OnSite Partners is another AEP competitive business offering energy solutions for customers to reduce emissions or lower their cost and energy profile. OnSite Partners’ portfolio of distributed energy solutions currently includes 56 projects across 15 states, with a total investment of $335 million. The projects use a variety of technologies, such as behind-the-meter solar, community solar, substations, batteries and a fuel cell. OnSite Partners currently has approximately 85 MW of installed direct current solar capacity and approximately 57 MW under construction.

OnSite Partners also has an active joint venture in New Mexico with PNM Resources to invest in renewable generation for customers and other public power entities. The project has a total of 21 MW of direct current solar sites in operation and another 67 MW of solar under construction.