The vertically integrated Gamesa has the capacity to take a project all the way through construction to operation and sell it later as a working asset, Jaunich says. On the other hand, Navitas, like other small US wind developers, is only able to take projects from inception to a certain point, where they stall while the company searches for equity.
Navitas has about 800 MW of wind development in its Midwest pipeline, but the difficulty the company has had getting financing has pushed much of the work Jaunich had planned for 2002 back to 2003. He says the generally negative environment in the US electricity sector, including the collapse of Enron and ongoing uncertainty about the lifetime of wind's federal production tax credit, has turned some financing away from the sector. The deal with Gamesa is set to eliminate those difficulties. "The goal is to develop 800 MW of wind in the next four years and it takes a lot of money to get all those projects to a maturity level."
Gamesa's purchase cements a May 2002 agreement between the two companies to jointly develop US wind power sites (Windpower Monthly, June 2002). Navitas effectively becomes a subsidiary of the Spanish company, says Jaunich, which will be represented on the Navitas board.
Northern Alternative Energy (NAE), from which Navitas evolved, made a splash in spring 2000 when it won a Northern States Power (NSP) all-source solicitation in a head-to-head battle on price with natural gas. It had proposed a blend of 50 MW wind with 300 MW of small gas peaking turbines. NAE signed the $300 million contract with NSP (now Xcel Energy) in 2000. Since then, a lull in Minnesota power demand, the result of an economic depression in the state, has forced the company to put the gas projects on hold. Navitas is building the 50 MW wind project on Buffalo Ridge in south western Minnesota in partnership with PacifiCorp Power Marketing.
Of the 800 MW Navitas has in development, only two projects have been made public. Its 50 MW Mendota Hills project will be operational in 2003 and NAE is again pursuing a 50 MW project in Montana. Other projects yet to be announced are in Iowa, Illinois, Minnesota and Montana, but Jaunich says he wants to expand that portfolio into Wyoming and as far south as Texas.