The Iowa Utilities Board approved MidAmerican Energy’s $3.6 billion plan to build up to 2,000 megawatts of wind power -- a major step toward realizing the company’s goal of supplying Iowa customers with 100 percent renewable energy at no additional cost.

The "Wind XI" project is the largest wind energy project approved in the U.S. to date, and may be just the first in a series of mega wind projects to advance in the coming months.

Regulators voted in favor of Wind XI last week, a month before MidAmerican’s requested date. The early approval will help MidAmerican take full advantage of the recently extended Production Tax Credit (PTC), which offers wind projects a 2.3-cent per kilowatt-hour incentive through the end of the year, then drops by 20 percent each year through 2020.

With last week’s approval notice, MidAmerican said it is now finalizing plans to begin construction of the 1,000 wind turbines. Wind XI will consist of multiple project sites across Iowa that will be placed into service over a three-year period, from 2017 through 2019. Upon completion of the project, renewable energy will support 85 percent of MidAmerican’s annual customer sales in Iowa.

Over the next 40 years, the Wind XI project will also generate more than $1.2 billion in landowner easement and property tax payments, according to a utility statement. The project will also create thousands of construction jobs and hundreds of new permanent jobs once the build-out is complete.

“Wind energy helps us keep prices stable and more affordable for customers, provides jobs and economic benefits for communities and the state, and contributes to a cleaner environment for everyone,” said Bill Fehrman, president and CEO of MidAmerican Energy, in a statement.

Several energy and environment groups came out in support of MidAmerican’s wind plans, including the Iowa Environment Council and the Environmental Law & Policy Center. These groups believe Wind XI positions Iowa to meet its requirements under the EPA’s Clean Power Plan by putting the state on a path to install 10,000 megawatts of wind by 2020, with wind making up more than 40 percent of the state’s overall energy mix.

Texas still leads the nation in terms of overall wind capacity, with nearly 18,000 megawatts of wind deployed at the end of Q2 2016, according to the American Wind Energy Association. Iowa ranked second with 6,365 megawatts at the end of the quarter. However, Iowa is the current leader with respect to how much of the state’s energy needs wind provides -- roughly 31 percent in Iowa versus 10 percent in Texas. According to the National Renewable Energy Laboratory, Iowa has an estimated total wind resource of 570,000 megawatts.

UBS analyst Julien Dumoulin-Smith said MidAmerican’s Wind XI deal is likely to be one of many that seeks to tap the country’s wind energy resources while federal incentives are in place.

“We highlight this deal as underscoring the relatively attractive terms of the PTC and the need to act expeditiously in order to qualify for these subsidy payments,” he wrote in a note to investors. “We would not be surprised to see further occurrences of such 'mega' wind orders prior to the PTC step-down, which begins for projects that are not already qualified by year-end 2016.”

In Iowa, the decision to approve such a large order bodes well for Alliant Energy's proposed 500-megawatt project. Dumoulin-Smith added that the continued build-out of low-cost wind in Iowa will add pressure to Dynegy’s coal portfolio in MISO territory and could put pressure on Commonwealth Edison’s nuclear portfolio with a potential east-west transmission line expansion into Illinois.

Through 2016, Dumoulin-Smith believes that U.S. wind procurements will be “economic” to consumers and provide adequate rates of return to contractors, either through the rate base or via a PPA arrangement. A recent report by Lawrence Berkeley National Laboratory found that wind technology is improving and prices are dropping, factors which are both expected to support growth through the end of the decade.

With the PTC extension, the wind energy sector has seen renewed investment in manufacturing facilities as well as research and development, said AWEA CEO Tom Kiernan, in a recent interview.

“Now that we have that multi-year horizon...significant capital is moving from other countries -- from India, China and elsewhere to the U.S. -- to invest in the wind industry here, because of the opportunity that we’ve got in the coming years,” he said.

Ongoing innovation and investment is essential if the U.S. wind sector expects to continue seeing high levels of growth. Costs will need to decline further as the PTC phases out. And new transmission lines will need to be built, which is no easy task, or else markets like Iowa could become oversaturated.

“At the end of the day, I think the country needs to make investments in infrastructure because wind is so affordable that including the cost of transmission it’s still, in many regions, the cheapest source of electricity,” said Kiernan. “So we need to be respectful and work with state [public utility commissions] to figure out a way forward.”