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United States

Utility challenges wind industry -- Xcel seeks 775 MW for Colorado

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Wind industry expectations and eyebrows were raised at year's end when Xcel Energy officially announced a plan to increase its Colorado wind power capacity by 275% before the end of 2007. If the plan pans out, Xcel will add 775 MW of wind energy to its Colorado system, beating the state's voter-approved mandate for 10% of non-solar renewable energy by 2015 with seven years to spare. It had previously talked about 750 MW within the next decade (Windpower Monthly, January 2005).

As the new year began, Xcel announced a deal with Greenlight Energy to purchase power from the Cedar Creek project, a 300 MW wind development in north-eastern Colorado, which is expected to go online before the end of 2007. That would already put Xcel close to 40% of the way to its goal.

"The goal is to achieve that mandate," says Xcel's Tom Henley. "We've always said we're an environmental leader and we want to stay an environmental leader. But, bottom line, between what we have on the books and what we're looking at around the nation, we'd become the biggest producer in the country as far as megawatts from wind reaching end customers."

Still, issues of permitting, turbine availability and grid access loom large. Xcel includes a cautious caveat in its announcement: "The ultimate success of permitting, constructing and placing new wind farms into commercial operation remains in the hands of independent wind developers." Says Henley: "We're just purchasing the output, so it's up to the contractors to beat the tax credit deadline and take care of securing turbines, reaching the grid and everything else."

So while there is some sense of victory shared by industry observers, there is also a sense of caution. "It's a fantastic announcement," says Ron Lehr of the Colorado Renewable Energy Society. "But it's an announcement, not finished projects."

Future generation

Randy Swisher of the American Wind Energy Association is of the same mind: "It's very encouraging and we're pleased that Xcel has stepped forward. But we'll just have to see how things play out and keep our fingers crossed that the projects all come online."

Xcel sees the US Energy Policy Act of 2005 and its emphasis on improving the nation's transmission grid as a gateway to much of the future generation. But the question of where all those turbines might come from over the next year still remains.

Turbine theory

Lehr has a theory that involves big companies and the recent rash of large framework contracts for turbine purchases (Windpower Monthly, January 2006). "I figure that some of the bigs who locked up turbines but didn't get the bids are being approached by the smalls," he says. "The smalls are saying: we got the bid, can we get the turbines from you? And the bigs are saying: sure, let's talk about price."

Swisher agrees with that part, too. "There are obviously companies out there with access to wind turbines," he says. "It depends on whether the contracts are at a level that can be financed."

Henley says that any actual timelines or announcements regarding specific projects will come directly from the developers. He adds that Xcel does not necessarily intend to stop pursuing wind projects once the 10% Colorado mandate is met.

"But the other thing we have to keep in mind is the generation mix we have in our system: 7% is hydro and wind. And the problem with having too much wind in our system is that we can really only count on it to be available a third of the time."

The newly announced 775 MW wind power goal is outside Xcel's Colorado premium green pricing program, known as Windsource. Xcel, based in Minnesota, currently has 282 MW of wind in service or under construction in Colorado. The company serves 3.3 million electricity customers and expects to have more than 1100 MW of owned or purchased wind capacity on its system this year -- increasing to more than 2300 MW by the end of 2007.

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