The prairies and rolling hills of South Dakota will soon become dotted with wind turbines after the approval of eight major wind-energy projects that will bring 700 more turbines and an investment of $2.6 billion to the state by the end of 2020.
Two other projects now in the regulatory approval process would bring 188 more turbines and another $640 million in investments, bringing the total of new turbines to 888 and the investment by energy companies to $3.26 billion.
The rapid expansion of wind energy will reach across the state, with the majority of new turbines targeted for the northeast corner, but with other projects planned in Hand and Hyde counties in the center of the state and one 45-turbine project now under construction near Newell in Butte County in the far northwest.
Just two years ago, despite being home to the third-most-active winds in the nation, South Dakota ranked No. 19 for wind-energy production among the 50 states, with 15 wind farms and a total of 584 turbines able to generate 1,014 megawatts of electricity.
New national ranking data is not yet available, but the approved and docketed projects would raise the total of wind farms to 25 and nearly triple the number of wind towers in the state. The electricity-production capacity would rise to more than 3,600 megawatts. Though it is variable, one megawatt of electricity can power about 1,000 homes; South Dakota ranks third in the nation for the number of homes, about 300,000, that are powered by wind energy.
Any new energy project is subject to extensive review and typically draws significant opposition. Most of the new wind farms approved for construction faced questions by neighbors about the impacts of 500-foot tall towers, noise and light flicker from rotors that operate in a 380-foot diameter, and the potential effects on property values and local birds and wildlife.
Those who support renewable energy and the economic benefits of new industry, however, are exuberant over the spate of new wind farms approved for construction. The eight project approvals all came between June 2018 and July 2019.
“For rural South Dakota, this is an awesome boom,” said Steven Wegman of the South Dakota Renewable Energy Association. “No one ever spent $300 million in Codington County in a construction season.”
One wind farm approved in Clark County, the Crocker Wind Farm, will pay leaseholders $46 million over the next 20 years, according to documents filed by developer Geronimo Energy. That project, which includes up to 120 turbines and an expected investment of $600 million, will also create 10-20 full-time jobs, support a “community fund” of $1.6 million, and generate $36 million in tax revenues for the state, county, township and local schools in its first two decades of operation.
Many people who travel on Interstate 90 across South Dakota have likely seen the expansion of wind energy in the state after a pair of small wind farms came online last year.
The Aurora Wind Farm, with nine turbines, began generating electricity in Aurora County south of the interstate in October 2018. That same month, the Brule Wind Farm began generating electricity with nine turbines that are clearly visible south of the interstate near Kimball. Those projects were the only significant wind farms to begin operation in South Dakota from January 2016 to October 2018.
Several factors have led to the rapid expansion of wind-energy projects since then.
Wind-energy developers are rushing to bring projects online as quickly as possible to obtain the financial benefits of the Renewable Electricity Production Tax Credit for new wind projects. Congress has voted to begin phasing out those credits starting in 2020 and ending in 2025.
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The rush to obtain the full value of those tax credits has dovetailed with the recent completion of two 345-kilovolt power lines that created new capacity to move electricity produced in South Dakota and North Dakota to markets in neighboring states. The two new lines now extend from Ellendale, N.D., to Brookings and can then carry energy on a separate line to the Twin Cities.
In advance of those projects, South Dakota lawmakers in 2015 approved a measure to reduce the state tax on production of each kilowatt of wind energy by roughly a third.
The other factors driving the wind-energy expansion are an increased push by many states to encourage or require further usage of energy from renewable resources and a dramatic decrease in the cost of harnessing wind energy. In the early 2010s, it cost energy companies about $3,500 to build turbines and machinery to harness a kilowatt of electricity. That cost has fallen below $2,000 per kilowatt of capacity, Wegman said.
In recent years, South Dakota lawmakers and officials have tried to lure wind-energy companies to the state, where the wind blows at full capacity about 40% of the time, the third-highest rate in the nation. Suddenly, the state has the full attention of energy companies.
“It’s about time; we’ve been in the wading pool for a long time, and now the tide has come in,” said Wegman. “A lot of small towns and counties and townships are going to get an economic boost that they’ve never, ever had since South Dakota became a state.”
The approval process for new wind farms can take years and cost energy companies several million dollars in up-front costs.
Eight major wind projects were approved in a 13-month period by the South Dakota Public Utilities Commission, an incredible pace for the three-member elected board that reviews and rules on energy-construction projects and also regulates utility rates.
Hanson said the PUC, the developers and local officials and residents have worked hard to reduce the impacts of the wind farms and turbines.
Several of the approved projects have dozens of conditions placed upon developers in response to concerns or complaints levied by local officials and neighbors of the projects. Counties where wind farms will be built have control over some siting issues, including the critical matter of setbacks that determine how close towers can be to roads, neighboring homes or municipal boundaries.
“It’s not always the way we want it,” Hanson said. “We may love something or we may hate something, but in the end we have to vote based on what the law tells us to do.”
The rapid growth in wind-energy production is welcome news for the eight South Dakota companies that provide equipment, support and maintenance services to wind-energy developers and operators, said Mike Sherman, president of Renew Energy Maintenance in Sioux Falls.
“It definitely benefits our company and creates opportunities for us to add employees,” Sherman said.