Wind and ale
Enel brews up Oklahoma wind power agreement with Anheuser-Busch
Budweiser, this wind is for you.
Anheuser-Busch and Enel Green Power said Wednesday they have signed a power agreement for electricity from an under-construction wind farm in northern Oklahoma.
The deal will give Anheuser-Busch 152.5 megawatts of capacity from the 298-megawatt Thunder Ranch wind farm in Garfield, Kay and Noble counties. The $435 million Enel project, which is being constructed in two phases, is expected to be in operation by the end of the year.
The project is the brewer’s first large-scale renewable energy deal in the United States and will help its parent company, AB InBev, meet a global pledge to secure all of its electricity from renewable resources by 2025. That goal would be equivalent to taking 500,000 cars off the road each year.
“As we strive to bring people together to build a better world, we at Anheuser-Busch are dedicated to reducing our carbon emissions,” said Joao Castro Neves, the company’s president and CEO. “Helping to grow the renewable energy market is not only good for the environment, it is a strategic business move as we strive for long-term sustainability.”
Enel started construction
It’s a win for us, it’s a win for nature, it’s a win for Enel.” Joao Castro Neves
of the Thunder Ranch wind farm in May. The company already has eight wind farms in operation in Oklahoma and is also building the 300-megawatt Red Dirt wind farm in Kingfisher and Logan counties. Enel will have about 1,700 megawatts of wind capacity in Oklahoma by the end of the year.
More than 400 workers are involved in the construction phase of Thunder Ranch, and the wind farm will have 18 permanent jobs. Enel has not disclosed other customers for the second phase of the project.
Rafael Gonzalez, CEO of Enel Green Power North America, said partnering with global brands like Budweiser and AB InBev shows other customers that Enel is at the forefront of offering customized energy solutions.
“Enel and A-B are setting an industrywide example of how companies can invest in climate solutions at the same time as improving their business’ bottom line,” Gonzalez said in a conference call with reporters.
Enel earlier this year signed an agreement with T-Mobile to take 160 megawatts of power from Enel’s Red Dirt project. The company also has a powerpurchase agreement with Google at a Kansas wind farm.
Corporate power customers
Corporate customers are a fast-growing segment of the wind industry, which traditionally sold electricity to utilities or as merchant generators into a competitive energy market. Last year, corporate and other non-utility customers signed agreements for more than 1,950 megawatts of U.S. wind capacity, according to the American Wind Energy Association.
Low wind prices and the certainty of long-term energy delivery at a fixed cost has attracted corporate customers across the Fortune 500, as well as universities, cities and military installations. Tech companies led the way and continue to be the biggest buyers of renewable energy, but recent deals have included manufacturers and retailers.
“This is something consumers care about,” Castro Neves said. “We are doing this because shareholders are asking, stakeholders are asking, because we as a management team believe this is the right thing to do.”
Neither Enel nor Anheuser-Busch revealed the price of the wind procured under the power agreement.
Castro Neves called the Enel Thunder Ranch deal a “win-win-win” for Anheuser-Busch. In the past decade, the brewer has cut its water use by 50 percent and lowered its glass, aluminum and paper packaging costs. Since 2008, the company has cut its energy use by 30 percent.
“I think it’s great to partner with a company that is investing heavily in the U.S.,” Castro Neves said. “It’s a win for us, it’s a win for nature, it’s a win for Enel.”
Anheuser-Busch projects it will take 610 gigawatt-hours of electricity each year from the Thunder Ranch wind farm, or as much energy is used to brew 20 billion, 12-ounce beers.
“This announcement shows the trust that these companies show in Oklahoma as an energy leader,” Rep. John Pfeiffer, R-Mulhall, said in a statement. “The returns to my district will be felt in the local schools and all the sectors of our local economies.”
Enel said it spent more than $2.7 billion on its eight current Oklahoma wind farms, with more than $300 million in local property taxes paid to local communities over their useful lives.
The announcement comes amid uncertainty over the future of state policy on wind projects. Oklahoma lawmakers have ended two major tax incentives for wind.
Gov. Mary Fallin proposed a 0.5 cent per kilowatt-hour tax on wind energy in her budget proposal earlier this year, although the idea didn’t get much traction in the regular session. Rep. Mark McBride, R-Moore, has said he plans to introduce legislation for a wind tax that would go toward a pay increase for teachers.
Gonzalez said Enel understands the budget pressures in Oklahoma and the company remains committed to the state and the communities where it has wind farms. But he said any talk of a new tax on wind creates uncertainty for investors.
“There is a good resource in terms of wind,” Gonzalez said. “We continue to monitor how the situation is going to go in the coming sessions. There are changes in legislation that could impact business decisions we have to take in terms of investment.”
Updates to Oklahoma’s alcohol laws are expected to benefit breweries like Anheuser-Busch when they go into effect next year. The company already has about 700 employees in the state.
“From the A-B side, we’re very happy with our business in Oklahoma,” Castro Neves said. “Everything we’ve had to do with the state has been very open and we’ve had very good discussions.”