World's largest wind farm planned for Iowa. (Environmental Intelligence).

Iowa will soon have the world's largest wind farm, if MidAmerican Energy Company, part of Warren Buffet's MidAmerican Energy Holding Company, goes ahead with plans to build a 310 megawatt (MW) wind farm across 200 acres of the state's farmland. With 180 to 200 turbines and a startup cost of $323 million, the project would have the capacity to supply electricity to 85,000 homes when completed in 2006. MidAmerican Energy Holding Company is an active player in the green energy business, generating 15 percent of its electricity with green energy.

The project makes sound business sense to MidAmerican in several respects. Wind isn't subject to drastic price fluctuations of the kind that have haunted natural gas and oil, so its stable generation costs could provide a hedge against fuel-price increases and help MidAmerican to meet its commitment of no rate increase in Iowa until 2010. The cost of electricity generation from wind is expected to be 4.2 cents a kilowatt hour (kWh), including a 1.8 cents-per kWh federal tax credit. The project would also provide the company with a state tax credit for building and owning wind facilities, thanks to a bill signed into law by governor Tom Vilsack two weeks after MidAmerican's announcement of the wind project.

It's not yet clear to what degree the plan reflects a new commitment to clean energy on the part of MidAmerican, and to what extent it simply provides public-relations cover for a company that remains a major fossil-fuel user with close to 85 percent of its generation coming from coal. The coinciding of the new state wind subsidy with the prospective new wind farm may be a political marriage of convenience, since it will give MidAmerican a PR windfall while helping the governor by deflecting public attention from plans to build more fossil fuel-based power plants in Iowa-including a 790MW coal-fired plant and a 540MW natural gas plant, both of which are substantially larger than the wind farm. Environmentalists worry that once MidAmerican has its own wind farm it will not renew its purchase agreements with local producers-in effect simply shifting the source of some of its wind energy rather than making the whole farm a net addition to the state's wind energy capacity.

Either way, however, the project would bring significant benefits to Iowans. Farmers leasing land for the wind project would receive annual royalty payments of as much as $4,000 for each turbine installed.