October 3, 2011 / 7:21 PM / 6 years ago

BP to build $800 million Kansas wind farm in 2012

(Reuters) - BP Plc announced plans on Monday to build an $800 million wind farm in Kansas next year, providing a lift for the U.S. wind power industry as its outlook dims with the looming expiry of federal tax credits.

<p>A BP petrol station is reflected in a car, in London April 28, 2009. REUTERS/Luke MacGregor</p>

The 419-megawatt Flat Ridge 2 wind farm will include 262 General Electric turbines spinning about 43 miles southwest of Wichita, BP said, in what will be the largest installation for both the state and BP Wind Energy.

Subject to permits, BP will start work on the 66,000-acre (26,700-hectare) project within the next three months, employing as many as 500 people at the peak of construction with a target of commercial start-up by the end of 2012.

Most of the electricity will be sent out of state, with Associated Electric Cooperative Inc signing a power purchase agreement for 314 MW that will help power its 875,000 members in Missouri, northeast Oklahoma and southeast Iowa.

BP Wind Energy said it was actively marketing the remaining capacity to other customers in the Midwest.

But the U.S. wind industry faces a tough road ahead. Wind energy specialist MAKE Consulting has just trimmed estimates for turbine demand, citing lower expectations for China and the United States -- the latter due to uncertainty about production tax credits due to expire next year.

The politics of renewable energy have also been greatly complicated by the troubles surrounding federal loan-backed solar company Solyndra.

Flat Ridge 2 is a new benchmark for BP Wind Energy, which now has 13 smaller wind farms in seven states producing a total of 1,600 MW of capacity -- enough for 500,000 U.S. homes.

One of them, Flat Ridge 1, is located several miles away from its larger namesake and started up in February 2009, with its 50 MW going to Westar Energy Inc.

Reporting by Braden Reddall in San Francisco; Editing by Gary Hill

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