EGEB: Kansas wind farm sold, Facebook will buy all the energy

  • Apex Clean Energy has sold its fourth clean power purchase agreement to Facebook.
  • The IMF has some advice for the US on how to implement climate mitigation goals.
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Kansas wind power for Facebook

Milwaukee-headquartered WEC Energy Group has purchased a 90% ownership interest in the Jayhawk Wind Farm, which will be built in Bourbon and Crawford counties, Kansas, from Apex Clean Energy for $302 million. Invenergy, which will operate Jayhawk, will acquire the other 10%.

Charlottesville, Virginia-headquartered Apex Clean Energy intends to bring the wind farm online by the end of 2021.

The Jayhawk site, which breaks ground this week, will consist of 70 GE wind turbines and generate more than 190MW of power. Facebook has signed a long-term contract to purchase all power generated by this wind farm. The tech giant stepped in after a previous power purchase agreement (PPA) was dissolved.

Apex notes on its website:

The deal marks Apex’s fourth renewable transaction with Facebook, following a 61.6 MW PPA with Altavista Solar [Campbell County, Virginia]; a 200 MW PPA with Aviator Wind East [Coke County, Texas], part of the largest single-phase, single-site wind project in the United States; and, most recently, a 175 MW PPA with Lincoln Land Wind in [Morgan County,] Illinois.

Jayhawk will generate over $20 million in landowner payments and $27.2 million in tax revenue. Apex Clean Energy made a video in late 2019 about the benefits of wind to rural communities in the US, as explained in the words of the residents:

In Kansas, 43.3% of electricity comes from wind, ranking the state second in the US in 2020, after Iowa, when it comes to sourcing electricity from wind. The Kansas City Star reported on February 16 that the state’s wind power outperformed fossil fuels during the recent brutal cold snap.

An IMF climate change guide for the US

The Washington DC-headquartered International Monetary Fund (IMF) released a report yesterday, “Implementing the United States’ Domestic and International Climate Mitigation Goals: A Supportive Fiscal Policy Approach.” Since the US has pledged to meet the Paris Agreement of net zero by 2050, the IMF has offered up suggestions, pointing out:

Fiscal policies at the national, sectoral, and international level could play a critical role in implementing these objectives, along with investment, regulatory, and technology policies. 

Their suggestions across sectors are comprehensive, and here’s an excerpt of what the IMF’s report had to say about road transport, which is currently responsible for 19% of US greenhouse gases:

Road transportation is especially difficult to decarbonize through carbon pricing (or higher
gasoline and diesel excises) alone due to the relatively modest impact it has on retail fuel
prices and political resistance to higher road fuel prices at the federal level.

There is a federal gas guzzler tax of $7,700 applying to passenger vehicles with fuel economy below 12.5 mpg, a tax credit of $7,500 for EVs, and tax credits of between $4,500 and $7,500 for plugin EVs.

Generalizing the gas guzzler tax and EV tax credits with a more comprehensive feebate [when environmentally friendly practices are rewarded while failure to adhere to such practices is penalized] would strengthen incentives for progressively and cost-effectively decarbonizing the vehicle fleet, while avoiding a fiscal cost to the government.

A feebate would provide a sliding scale of fees on vehicles with above-average emission rates and a sliding scale of rebates for vehicles with below-average emission rates. That is, each new vehicle would be subject to a fee given by:

CO2 price × {CO2/mile – CO2/mile of the new vehicle fleet} × {average lifetime vehicle mileage}

EPA-certified fuel economy by model type (currently used to administer the CAFE program) provides the data needed to assess the fees and rebates for each vehicle. The feebate:

Promotes the full range of behavioral responses for reducing emission rates, as there is always a continuous reward (lower taxes or higher subsidies) from switching from any vehicle with a higher emission rate to one with a lower emission rate;

Is cost effective as the reward is always proportional to the reduction in the emission rate — in
contrast under the CAFE program, the reward for additional emissions reductions declines
with higher emission vehicles given the focus on miles per gallon rather CO2 (or gallons) per
mile; and

Maintains (approximate) revenue neutrality — by definition, fees offset rebates as the average
emission rate in the formula is updated over time.

The IMF suggests that subsidies for EVs would decline over time as the average fleet emission rate declines. It says that is appropriate as the cost differential between clean vehicles and their gasoline
counterparts falls over time.

What do you think of the IMF’s suggestion for the Biden administration? Let us know in the comments below.

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