Iberdrola, World's Largest Wind Energy Producer, to Invest More Than $10 Billion in U.S. Market

Spanish utility giant Iberdrola plans to spend more than $10 billion in the U.S. wind energy market in the next three years.

During the same period the company plans to spend about $6 billion in Spain and the United Kingdom and $3 billion in South America and other locations.

The money spent in the United States represents about 40 percent of the firm's total investment across its entire energy business, the Financial Times has reported ("Iberdrola to Focus on U.S. Growth," Feb. 24, 2010).

Currently Iberdrola has 3,500 MW of installed capacity in the U.S. and is aiming at growing to 23,500 MW of installed capacity.

"Animal, Vegetable, Mineral -- Wind? The Severed Wind Power Rights Conundrum:" New Law Journal Article by Prof. K.K. DuVivier

K.K. DuVivier, professor of energy and environmental law at the University of Denver Sturm College of Law, has written a ground-breaking article about wind power and how wind rights are categorized. An abstract of the article, "Animal, Vegetable Mineral -- Wind? The Severed Wind Power Rights Conundrum" that appears in Volume 49, Number 1 of the Washburn Law Journal (fall 2009), follows:

U.S. wind power capacity increased 50 percent in 2008, making wind one of the fastest growing energy sources. Wind has several advantages over conventional energy fuels: it is renewable, does not emit pollutants, and does not require scarce water resources to process the raw product or to generate electricity.

Yet wind power’s rapid growth is creating its own crisis. Thousands of landowners across the country have severed their “wind rights,” splitting wind ownership apart from surface ownership. However, wind power development requires extensive, and perpetual, surface disturbance. As surface owners are the parties most impacted, taking them out of the equation seriously complicates surface access and damage negotiations.

Furthermore, when landowners retain control over both the mineral and wind rights, those landowners can serve important roles as mediators in disputes between competing developer interests. Landowners who receive royalties from both mineral and wind development have an incentive to see both enterprises coexist. This incentive is eliminated when mineral and wind rights are severed and the owners of these separate estates seek only to maximize their own distinct interests.

Commentators have applied the mineral severance concept to the wind context to recognize the practice severing wind. But are these commentators asking the right question? Yes, wind probably can be severed. The more important issue is whether policy makers seeking to promote mineral development and to protect farmers and ranchers should allow it to be severed.

Only a handful of states have examined wind ownership issues, and few have chosen to prohibit wind severance completely. The only two courts that have yet addressed the issue of wind severance have done so obliquely. A 1997 California court allowed wind severance in a condemnation context by likening wind to oil; in a 2009 partition case, the federal district court in New Mexico likened wind to a different mineral— water.

How a wind right is categorized will have significant impacts on relationships between wind-rights owners and surface owners for centuries to come.

Prof. DuVivier’s article, the full text of which can be accessed by clicking here, explores the two cases on record relating to wind severance and the evolution of severed mineral rights. Her analysis illustrates that we should be exploring alternative models because the historical and policy rationales concomitant for mineral severance do not apply in the wind context. All those interested in the state of the art when it comes to wind power issues should carefully read Prof. DuVivier's piece.

In addition, those who attend the graduate program will have the opportunity to learn firsthand from Prof. DuVivier, one of the foremost experts on U.S. wind power issues.

More Energy News From China: Plans for 4th Generation Nuclear Power Plant and Investing in the U.S.

Last week brought two major energy-related announcements from China. The country announced plans to build the first "fourth generation" nuclear power plant in two to three years time. Second, a Chinese-based wind turbine manufacturer has gained exclusive rights to supply a huge wind farm in west Texas. No one should pretend that China does not face enormous energy-related challenges, but it is also worth bearing in mind that China is hardly standing still when it comes to these challenges.

The potentially more interesting of the two announcements involved the wind farm in west Texas. The U.S. Renewable Energy Group and Cieclo Wind Power LP have signed a joint venture framework agreement with China's Shenyang Power Group, which will supply 240 2.5 megawatt wind turbines that will be manufactured in China. The 600 megawatt wind farm will spread over 36,000 acres in west Texas. The wind farm is expected to generate enough electricity for 180,000 homes. Shenyang Power is expected to begin shipping turbines in the first quarter of 2010.

It is expected that the $1.5 billion project cost will be financed through commercial banks in China.

The historic agreement marks the first time that Chinese and U.S. firms have agreed to jointly develop a utility-scale wind power project. The agreement, as reported in The Wall Street Journal, is "a sign of how Chinese firms are aggressively capitalizing on America's clean-energy push ("Chinese-Made Turbines to Fill U.S. Wind Farm," Oct. 30, 2009)."

While this is the first announcement of its kind, it seems likely that it will not be the last. The need for clean energy knows no political boundaries. And, it is worth noting, clean energy will be at the top of the agenda when President Obama visits China later this month.

The Wall Street Journal Identifies Five Energy-Related Technologies "That Could Change Everything"

The Oct. 19, 2009, issue of The Wall Street Journal included a special report titled, "Five Technologies That Could Change Everything." Editor Lawrence Rout described these as "five areas where scientists and engineers are looking for breakthroughs that may--just possibly--help get us out of the [energy] bind we're in."

According to the Journal, the five technologies are:

• Space-based solar energy
• Advanced car batteries
• Renewable-energy storage
• Carbon capture and storage
• Next-generation biofuels

Each technology is described and a short assessment provided.

The special report also included an interesting story about windpower. Of particular interest to me was the fact that the state of Iowa has the second highest amount of installed wind capacity in the U.S. Future expansion in Iowa, however, will require more transmission capacity. The state of Colorado ranks 8th in the nation in installed capacity. Texas ranks first in installed capacity.