Horizon Wind Energy has pulled the plug on its proposed wind farm north of Cheney Reservoir, saying it can't compete with likely future development.
The Houston-based wind energy giant had been looking at the area for 18 months to build a 100-megawatt capacity wind farm, even setting up a tower to test wind speeds.
But the company has sent a letter to landowners in the area saying that it was ending its efforts to negotiate leases.
Landowners controlling about 1,000 acres signed up, but the company sought commitments for about 10,000 acres, said Vanessa Kellogg, Horizon's director of project development for the southwest region.
Not all of those acres would be built upon, but they would be included in the planning area for the wind farm and landowners would receive payments.
Several landowners in the area said most farmers in Horizon's target area felt their land had a higher value as 5-acre rural housing lots or even suburban housing lots.
Landowners would have had to commit to leases for at least 30 years and agree to seek company approval for some changes on the property.
Kevin Schmidt, who owns a small parcel in the area, said he figured the value at about $4,000 per year per tower, although the formula was complex. Few landowners would get more than one, and some landowners would get none. Those who didn't get towers would get lesser payments.
Most of the landowners, Schmidt said, just thought the commitment was too long. Development would come to their area before that, he said.
The payoff for waiting might be sizable. Real estate broker Jeff Lange estimated the area's exceptionally rich agriculture land at about $4,000 an acre. But converted to 5-acre lots, land would be worth perhaps $10,000 an acre, he said.
Advocates say that wind turbines have been shown not to hurt land values, but the landowners simply weren't willing to take the risk, Schmidt said.
Schmidt said he was one of those who liked the idea, but since he owns only a small parcel, he probably wouldn't have gotten one.
"I thought it would look kind of neat," Schmidt said.
That's the opposite of what happens in more rural areas, Kellogg said, where wind turbines are welcomed by area farmers.
Wind turbines work well with agriculture. Just as with oil leases, a wind turbine provides landowners with a few thousand extra dollars a year in rent on top of their farming income. Having a turbine actually raises the value of the land by increasing the amount of income it produces.
Horizon Wind Energy looked at the site because of its proximity to energy consumers and to high-capacity power lines. Kellogg said the site actually has relatively good wind for being in the eastern half of the state.
But Horizon and other wind farm developers want to go to western Kansas where the wind is stronger and more constant, but they are hobbled for now. A consortium of utilities is nearing approval for high capacity power lines through western Kansas that could be operating by 2014 or 2015.
Once those are up, wind farms will be looking west.
"It's a matter of time," Kellogg said.
She said what happened in the land between Haven and Cheney Reservoir doesn't prove that wind farms can never be built near Wichita, only that it is more difficult. What companies can offer on leases depends on the specifics of the site, such as the amount of wind, distance to transmission lines, and required infrastructure.
Lange, the broker, said he agrees with the guesses of the land owners — Wichita's metro population will continue to grow northwest along K-96 toward Hutchinson, pushing demand for rural lots.
One irony, Lange said, is that he also expects the surge in wind farms in Kansas to drive the expansion of wind turbine manufacturing in the area between Wichita, Hutchinson and Newton — industrial growth that will further push up the price of farmland, such as the land near Cheney Reservoir, beyond what wind farms can afford.
"Wichita is going to become the Air Capital Squared, both aircraft and wind power," he said.