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Retail giant buys Texas wind

American retail giant Wal-Mart's long-term goal of getting 100% of its electricity from renewables recently took a Texas-sized step. The Arkansas-based company announced an agreement to supply 15% of the electricity at 360 Texas stores from a 90 MW wind plant called Notrees, owned by Duke Energy and expected online in west Texas by April.

Many months of negotiations for the four-year power supply deal began when Wal-Mart struck up talks with Tierra, a Texas wind developer acquired by Duke Energy in 2007. "That actually escalated the speed of our ability to do this deal," says Greg Pool, Wal-Mart's renewable energies manager. "Both Duke and the people that remained from Tierra were committed to finding a way we could work together."

Pool says Wal-Mart ran thorough cost analyses and determined that Notrees could provide a competitive fixed price. "No one has a crystal ball," he says. "And how it will work out, we still don't know. But we look at this as the long term as we pursue other projects."

The company has no immediate plans for more wind, but expects similar deals in other states. "I know we'll be able to replicate that same type of relationship with other developers and other companies and other projects," Pool says. "I don't want to speak too soon, but I think you'll see some exciting things coming out of Wal-Mart in the future."

Meanwhile, Wal-Mart, the world's largest public corporation by revenue, could potentially provide a new source of equity for wind projects seeking investors. In the financial meltdown, companies with large enough profits to utilise wind's federal production tax credit (PTC) are much in demand but in short supply.

Only those with sizable tax burdens are in a position to take advantage of the PTC by taking an equity position in a wind project. But though the firm has pondered such a course, it is not in its immediate future. "I'm not going to rule it out," Pool says. "But right now, we don't have any ready plans to be an equity investor."

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