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Ameren Missouri to spend $1 billion on wind generation projects

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Ameren Missouri on Monday outlined a more than $1 billion commitment to added renewable energy generation, helping reshape the long-term outlook of its power supply and taking what some praised as a critical, if not overdue, first step toward adopting increasingly cost-effective clean energy.

The St. Louis-based electrical utility, a subsidiary of Ameren Corp., plans to spend $1 billion on wind turbines in Missouri or neighboring states that will add at least 700 megawatts of wind generation by 2020.

The investment will push wind to account for approximately 10 percent of Ameren Missouri’s power generation and marks the company’s largest commitment to renewable energy to date, Ameren Missouri President and Chairman Michael Moehn told the Post-Dispatch.

“This commitment is about cost-effective renewable resources,” said Moehn, adding that customers stand to save money from the infusion of wind, which he says is cheaper than other forms of new generation thanks to advancements in technology.

“There really has been a step change on the price side of these things,” he added. “It’s the right time to really make a significant transition here.”

While Ameren expressed a strong preference for owning its own wind generation based in Missouri, the source, location and cost of the new wind production is still under negotiation with several developers, including some in other states, according to the company.

The company also said Monday it plans to add 100 megawatts of solar generation over the next 10 years in multiple phases. One of the solar generation facilities, at St. Louis Lambert International Airport, is slated to be completed next year.

Combined, the wind and solar projects are part of the company’s goal of reducing its carbon emissions 80 percent by 2050 from 2005 levels, Ameren said. The increased commitment to renewable energy was laid out in the company’s Integrated Resource Plan, a 20-year outlook submitted every three years to utility regulators at the Public Service Commission. It indicated that retirement of the coal-fired Meramec and Sioux power plants will continue as planned in 2022 and 2034, respectively, while announcing that two units at its Labadie facility — the largest coal plant in the state — will be phased out in 2037.

While applauded, the announced transition has been long-awaited by renewable energy advocates in the state. On Friday, Renew Missouri, a Columbia-based organization that supports increased adoption of renewables, issued a report titled “Opportunity Blowing By,” that encouraged Ameren Missouri to take advantage of cheap wind energy.

The report suggested that pressure was mounting from investors for the coal-heavy utility to look to wind. It stated that on Ameren’s most recent quarterly earnings call, company executives were asked by three separate analysts, including one from Goldman Sachs, about the relative lack of wind in its portfolio.

Prior to Monday’s announcement, the utility only used wind energy purchased from out-of-state to power about 26,000 homes. Meanwhile, Renew Missouri states that “of the nation’s 20 largest power producers, Ameren ranks as the second most coal dependent,” with about 70 percent of its power generation from coal.

“The marketplace has sent a very clear signal to Ameren that they need to incorporate wind into their portfolio,” said Ashok Gupta, a Kansas City-based energy economist for the Natural Resources Defense Council. “A diverse portfolio is clearly in the shareholder interest and the consumer interest.”

It’s especially attractive to corporate customers. Access to wind power largely guided Apple’s recent decision to build a $1.3 billion data center in Iowa, and many speculate that it will similarly help Amazon winnow the list of suitors for its new headquarters, given the company’s own commitment to renewable energy.

This month, Anheuser-Busch InBev signed a wind farm power deal as part of the brewer’s global renewable energy goal. A-B InBev, which has its North American headquarters in St. Louis, announced plans to buy power produced by an Oklahoma wind farm as part of a global goal to have 100 percent of its purchased electricity come from renewable sources by 2025.

“That’s such a missed opportunity,” said James Owen, executive director of Renew Missouri, lamenting that a company so strongly associated with St. Louis had to look beyond Missouri to meet its goals. “We’re leaving a lot on the table.”

While maintaining that Ameren’s announcement was motivated mainly by more affordable wind technology, Moehn said the utility is mindful that access to renewable energy is “becoming an increasingly important factor for a lot of these corporate customers,” including companies that consider relocating to Missouri.

“We’re only as strong as the communities we serve,” Moehn said. “If this helps facilitate or accelerate economic development, all the better.”

Moving forward, the PSC will still need to grant approval for Ameren to pursue its new renewable energy goals — a process in which “there will certainly be some skepticism” from regulators, according to Gupta.

But he says the dramatic shift of electricity prices toward renewables and away from coal raises a thornier question that state regulators may eventually need to broach.

“We need to figure out how to retire old generation that isn’t competitive with new wind,” said Gupta, noting that that transition is complicated by the fact that utilities are still recovering their initial investments in coal plants. “That’s the conversation that needs to happen.”

Ameren says it will remain open to the possibility of adding still more renewable energy in the years to come, emphasizing that the 700-megawatt commitment to wind energy is a minimum threshold.

“Clearly, we could be adding more of this over this time period,” Moehn said. “As you sit here today, the trend line certainly favors these new technologies.”

Lisa Brown of the Post-Dispatch contributed to this report.


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