Xcel Energy to Spend Billions on New Wind Projects

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Xcel Energy Incorporated (NYSE:XEL) (Minneapolis, Minnesota) is investing billions of dollars in a multi-state wind energy build-out that, when complete in 2021, would add about 3,380 megawatts (MW) of new wind generation in seven states. When all proposed projects are complete, wind power will account for about 35% of the utility's resource mix, roughly doubling the role wind played in the utility's resource portfolio in 2015.

"We're investing big in wind because of the tremendous economic value it brings to our customers," Ben Fowke, chairman, president and chief executive of Xcel Energy, said in a statement. "With wind energy at historic low prices, we can secure savings that will benefit customers now and for decades to come. Our plan delivers on both economic and environmental fronts, as we provide customers the cleaner, renewable resources they want, while continuing to deliver the reliable and low-cost energy they need."

Xcel Energy will add the new wind generation through a combination of owned and contracted resources.

In Texas and New Mexico, Xcel Energy plans to add approximately 1,230 MW of new wind generation by building two windfarms and purchasing power from a third under a long-term power-purchase agreement (PPA). The utility estimates that these three projects could save the region's customers about $2.8 billion over a 30-year period. The southwestern projects include:

• Sagamore Wind, a 522-MW, $865 million project in New Mexico developed by Invenergy (Chicago, Illinois)
• Hale Wind, a 478-MW project located in Hale County, Texas, developed by a subsidiary of NextEra Energy Resources (NYSE:NEE) (Juno Beach, Florida). Construction of this $769 million project is scheduled to begin in early 2018 and be complete by late 2019.
• Bonita, a two-phase, 230 MW windfarm to be built in Cochran and Crosby counties, Texas, developed by NextEra Energy Resources. The project is valued at about $460 million. Xcel Energy will buy power from this facility under a long-term PPA.

In its Upper Midwest region, Xcel Energy plans to add about 1,550 MW of new wind generation in Minnesota, North Dakota, South Dakota and Iowa. The proposed windfarms are expected to save customers more than $4 billion during the projects' lives. Most of the new projects in this region will be owned by Xcel Energy. The projects include:

• Freeborn Wind Energy Center, a 200-MW, $400 million project located in Freeborn County, Minnesota, and Worth and Mitchell counties, Iowa, is being developed by Invenergy. Construction is scheduled to begin in late 2018 and be finished by early 2020.
• Foxtail Wind, a 150-MW, $300 million windfarm located in Dickey County, North Dakota, developed by NextEra Energy Resources.
• Blazing Star 1 and 2, a two-phase, 400-MW project located in Lincoln County, Minnesota. This project, under development by Geronimo Energy, has a value of about $640 million. The first phase, sized at 200 MW, is scheduled to kick off construction in early 2018 and be operating by mid-2019.
• Crowned Ridge Wind Project, a 600-MW, $1 billion project scheduled to be built in Codington, Deuel and Grant counties, South Dakota. This project is being developed by a subsidiary of NextEra Energy Resources.
• Lake Benton Wind Project, a 100-MW build-own-transfer project to be built in Pipestone County, Minnesota, is being developed by a subsidiary of NextEra Energy Resources.
• Clean Energy 1, a 100-MW power purchase agreement project in Morton and Mercer counties, North Dakota, developed by a unit of ALLETE Incorporated (NYSE:ALE) (Duluth, Minnesota).

In Colorado, Xcel has begun construction of the $1 billion, two-phase, 600-MW Rush Creek Windfarm, which is located in Cheyenne, Elbert, Kit Carson and Lincoln counties. This project is being developed by Invenergy. M. A. Mortenson Company (Minneapolis, Minnesota) is providing engineering, procurement and construction (EPC) services to this project. Site preparation for this project began earlier this year, and the first phase of this project, sized at 300 MW, is scheduled to be operating by the summer of 2018.

"This dramatic, multibillion-dollar expansion of Xcel Energy's wind portfolio is another sign of how far windpower has come," commented Britt Burt, Industrial Info's vice president of research for the Global Power Industry. "Wind power, aided by federal production tax credits (PTCs), is becoming more competitive as a source of generation."

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