US Investment & Development Guide - Upper Midwest

The Upper Midwest is among the most active and attractive wind power markets in the world. The six-state area features significant online installations, vast construction potential for the near future, a robust supply chain network and good transportation options, which combine to bolster a vibrant region blessed with strong winds and wide-open spaces.

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Iowa, with 3.67GW of installed capacity, is second only to Texas among all states as the country’s wind energy powerhouse. Minnesota, with 1.81GW, and North Dakota, with 1.2GW, also rank among the nation’s top ten. And, although the sparsely populated state of South Dakota has only 313MW of online capacity, it maintains a mind-boggling development pipeline of more than 5.6GW by 2013.Pipelines for North Dakota and Minnesota are pushing towards 2GW and Iowa’s is 1.4GW. They make the prospects for Wisconsin, with 449MW online, and Michigan, with 143MW, seem modest: both have pipelines under 500MW.

The key to unlocking wind resources in the Dakotas will be transmission build-outs that enable power to reach population centres in Minnesota, Illinois and beyond. South Dakota regulators  have approved a plan with a price tag upwards of $10 billion for three high-voltage lines intended to export 1.4GW. Minnesota utilities are joining efforts to build a transmission project, CapX 2020, designed to bring power into the state from North Dakota, which already exports roughly 70% of its electricity generation.

Supply chain hotspot

The Great Lakes Wind Collaborative, meanwhile, is examining the significant potential for offshore wind power on the four Great Lakes with shoreline on the Upper Midwest states. The region’s domestic wind market and location on important logistics routes, not to mention its position in the historic US manufacturing heartland, also make it a supply chain hotspot, with some of the industry’s big names choosing its six states for manufacturing plants.

All states are seeking to aid the development of their wind industries through a range of policies and incentives. Three of the six have renewable energy standards to drive the uptake of clean forms of energy generation over the next five to ten years. And all six have in place various tax breaks and credits aimed at supporting wind developers and manufacturers of wind turbines.


Giant 5GW project leads boom

One of the biggest projects ever conceived is already in the works on the barren tundra of western South Dakota. The 5GW mega-project – dubbed Titan – is a joint effort between BP Alternative Energy and US turbine manufacturer Clipper Windpower. Its 25MW first phase went online last year and it will be built out in phases during the coming decades. Elsewhere in South Dakota, Iberdrola is working near the Minnesota border to build the 306MW second phase of Buffalo Ridge, a project in an area renowned for steady wind that already hosts a cluster of projects.


Major projects coming through

In North Dakota, developer Just Wind’s 367MW Logan County wind farm should begin construction soon. Just Wind is also progressing its 800MW Emmons County scheme in the south of the state. Five 200MW projects are expected to come online in Minnesota between this year and 2012 — a pair of the projects is actually two phases of Bent Tree, a Wisconsin Power & Light development built in Minnesota’s Freeborn County. Nobles wind project in Nobles County, meanwhile, is the work of Enxco, while EcoEnergy is the developer of EcoHarmony West in Fillmore County. Noble Environmental Power is also planning to get underway with its 201MW Noble Flat Hill wind park in Clay County later this year.

Stony Brook, a development planned across three Wisconsin counties, is another that could reach 200MW when Midwest Wind Energy completes construction sometime next year. Another 200MW scheme has received approval to serve four townships in the north-east of Gratiot County, Michigan. In Iowa, the 300MW Red Rock and Whispering Willow phase 2 projects are moving ahead, as are the proposed 200MW Northstar and Hampshire Highlands plants.


Pioneering research partnerships

The University of Minnesota received an $8 million US Department of Energy (DOE) grant last year to lead a consortium of researchers in fostering onshore and offshore development. Partners include Siemens, Clipper and WindLogics. The University of Minnesota-Morris is home to the Renewable Energy Research and Demonstration Center, where the first large-scale wind research turbine at a US university began generating power in 2005 and whose partners include the DOE’s National Renewable Energy Lab.

The DOE’s Ames Laboratory in Iowa is run by Iowa State University and provides improvements to wind forecasting methods and related statistical analysis. Further research funding at university level is provided through the Iowa Alliance for Wind Innovation and Novel Development, which connects government, the private sector and community organisations with Iowa colleges and universities. One project, between Clipper and the University of Iowa, will examine wind turbine reliability.


Advanced materials

The Southeastern Wisconsin Energy Technology Research Center is a collaborative that brings regional companies together with the University of Wisconsin, Marquette University and Milwaukee School of Engineering. It has received $200,000 of federal funding to examine areas such as advanced materials and easing wind integration. Turbine manufacturer Vestas, meanwhile, has a long-term partnership with the University of Wisconsin-Madison.

The Michigan Alternative and Renewable Energy Center at Grand Valley State University is developing an offshore study to measure seasonal wind and ice conditions on Lake Michigan, where wind power potential is estimated at 182GW.


Ports ease domestic and local access

Wisconsin and Michigan contain port cities on four of the five Great Lakes, allowing access to the Atlantic Ocean via the St. Lawrence Seaway, connecting them with global wind power markets and manufacturers. In addition to competitive costs, the advantage of Great Lakes shipping is the ability to reach the US heartland, avoiding highway traffic and endless state and county permitting rules.

In Michigan, Detroit deals regularly with nacelles and hubs, while Muskegan is capable of handling wind equipment but is yet to enter the game. In Wisconsin, Milwaukee is one of the original regional wind energy ports, and recent enhancements are likely to increase traffic, while Green Bay has the needed infrastructure and staging area but has not yet handled wind equipment. Duluth, Minnesota, at the westernmost point of the Great Lakes, is a busy wind component destination — reporting a 150-fold increase of related traffic over the past six years.


River barge option

Meanwhile, Mississippi River barge transportation is a growing element in the Upper Midwest’s overall transportation picture, offering an economical option that, like Great Lakes shipping, avoids permitting costs and traffic. Iowa-made blades, nacelles and towers can be delivered by rail or truck to the state’s crane-ready port in Davenport and moved to downriver destinations. Foreign components can be delivered upriver from the Mississippi’s mouth in New Orleans to St. Paul, Minnesota. More than 25 states can reach the Mississippi via the river’s tributaries.


Favourable logistics draw major players

Transportation logistics and close proximity to excellent wind resources make the Upper Midwest an ideal home for the growing numbers of component and sub-component manufactures that fuel the wind industry,  including several major builders of turbines, blades and towers.

Since 2007, California-based Clipper Windpower has sold more than 500 of its 2.5MW Liberty turbines out of its factory in Sioux City, Iowa, while Spain’s Acciona can produce 450 of its 1.5MW machines annually at a plant in West Branch, Iowa.

Four major blade factories operate out of the region. In 2006, India’s Suzlon opened a factory in Pipestone, Minnesota. LM Wind Power’s factory in Grand Forks, North Dakota, is one of that company’s three US blade plants. Arizona-based TPI maintains a blade plant in Newton, Iowa. And Siemens, which plans to open a US turbine factory by the end of this year, has been making blades in Fort Madison, Iowa, since 2007 — and recently invested $10 million in a rail yard to facilitate low-cost transportation. Wisconsin-based Energy Composites plans to explore the possibilities of offshore wind with a factory capable of building blades up to 65 metres in length.

Transportation options also make the Upper Midwest ideal for tower manufacturing. DMI, based in West Fargo, North Dakota, maintains one of its three tower factories near its headquarters. Texas-based Trinity Structural Towers operates a plant in Newton, Iowa, and Tower Tech operates factories in Brandon, South Dakota, and Manitowoc, Wisconsin.


Small manufacturers flourish

Not surprisingly, many subcomponent manufacturers dot the map near large and midsize cities close to the Great Lakes, where raw materials and finished products can pass along ocean-connected waterways. Wisconsin Wind Works, a non-profit collaborative instigated by regional economic development body New North, connects original equipment manufacturers with a variety of the state’s supply chain vendors that run the gamut from composites and castings to gears, bearings and assembly. New North puts the number of manufacturers in Wisconsin capable of supplying the wind industry at over 500.

Meanwhile, in Michigan, both Detroit and Grand Rapids are rife with manufacturing plants – often retrofitted into factories originally designed for the state’s troubled automotive industry. Michigan also has significant manufacturing expertise, ranked fourth in the US for engineering graduates, according to the state’s economic development corporation.

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