Xcel Energy, already buying more wind power than any other utility in the US, is now striding towards also becoming a major wind plant owner. It has sought regulatory approval in Minnesota to build, own and operate a 100 MW project near the town of Austin, in Mower County, having contracted developer Enxco to build it. Enxco, owned by the renewables division of French state utility EDF, has developed the site of the Grand Meadow Wind Farm, which would be the first wind plant in Minnesota owned by Xcel. It is expected to consist of 67, 1.5 MW wind turbines, although a separate site permit was filed asking for approval of up to 200 MW. Currently Xcel buys power from 1300 MW of wind and this is expected to rise to 2800 MW by year's end as projects come online, says the company's Karen Hyde. But so far it only owns about 27 MW. "We don't earn anything off the wind power we buy," says Hyde. "That's a big part of our business that isn't producing value for our investors." Xcel is looking at a number of strategies to own wind, including build-to-own scenarios, where a project is bought well before it enters construction, buying construction-ready projects and developing its own projects from scratch. Hyde notes the utility has traditionally contracted for power purchase agreements that offer the lowest price, but that developers have often been unable to deliver on them. "We have found that some projects will underestimate what the cost of the [wind] product is and then when we enter into a contract negotiation, or are part way through negotiation, we find they cannot perform and that reflects very negatively on us in the regulator's eyes."
Have you registered with us yet?
Register now to enjoy more articles and free email bulletins.