Westar Energy Inc. (WR - Free Report) announced its intention to expand its renewable portfolio by offering request for proposals to potential renewable energy developers. The company hopes to add at least 80 megawatts (MW) of clean energy resources by securing one or more long-term contracts with the developers by 2016.
Westar Energy is keen on adding renewable generation assets in the next few years. The company stated that its first preference will be for projects located in Kansas. The company will provide a part of its Ironwood development rights in Ford and Hodgeman counties as part of the proposal. The developers can work on their own sites as well.
The proposals are due Sep 13, 2013. The company is mostly interested in projects that will bode well for the Kansas economy. The state has been known for its large wind resource base but Westar Energy is eager to welcome other alternative energy proposals.
As of now, the company has about 700 MW of renewable capacity under its belt and the current proposal will aid Westar Energy to achieve the 2016 Kansas renewable energy standard.
However, the final decision will depend on several factors like overall cost, availability of adequate transmission infrastructure to supply energy to the consumers, service reliability, state’s renewables policies and regulatory laws.
The latest move comes on the heels of the greenhouse gas legislations adopted by the federal authorities and positive market dynamics for renewables. Given the increasing awareness of the pitfalls of coal, electricity generation from renewables is projected to rise to 16% by 2040 from 13% in 2011 as per Energy Information Administration’s prediction, Westar Energy’s decision looks well timed in terms of its future growth objectives.
The proposed green energy additions will also provide an impetus to the company’s RENEW program, allowing customers to receive electricity at cost-effective rates. Nevertheless, renewables will likely confront stiff competition from abundant coal and natural gas sources in the energy race.
Currently, Westar Energy holds a Zacks Rank #3 (Hold). Other utility operators well positioned in the industry at the moment are Zacks Ranked #2 (Buy) IdaCorp, Inc. (IDA - Free Report) , UNS Energy Corp. and NV Energy Inc. .