Xcel Invests $2 Billion for 1.5 GW of New Wind in Upper Midwest
Xcel Energy announced late last month that it will invest US$2 billion to build eight to 10 wind farmstotalling 1.5 GW of new capacity, enough to boost its Upper Midwest wind capacity by 60% and power 750,000 homes.
The plants will serve customers in Minnesota, North and South Dakota, Wisconsin, and Michigan’s Upper Peninsula, the Star Tribune reports. “The new wind farms should come online between 2017 and 2020 and are part of Xcel’s long-term plan to move away from coal-fired power generation.”
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By 2030, the company expects to produce 33% of its electricity from wind, 33% from nuclear generation, and just 15% from coal, down from about 33% today.
“Xcel’s visionary leadership on reducing the use of imported fossil fuels in the electric system is a model for utilities and energy companies across America,” said Fresh Energy Director Michael Noble in St. Paul, MN.
Xcel currently procures most of its wind-generated electricity through long-term power purchase agreements, so its decision to take up to a 50% stake in the new wind farms is “a departure from its past practice, though one that’s expected,” the Star Tribune notes. “By owning wind farms, Xcel can incorporate its investments into its rate base and thus get a return for its investors through the regulatory process.”
On CleanTechnica, correspondent Tina Casey cites the U.S. Production Tax Credit for wind and a strong wind commitment from the Midwest Independent System Operator (MISO) as factors that may have hastened Xcel’s investment decision. “Independent system operators are sanctioned by the Federal Energy Regulatory Commission to provide a platform for competitive electricity markets, long term regional planning, and grid reliability—so of course, wind energy is at the top of MISO’s to do list,” Casey explains. “As early as 2012, MISO was reporting a peak, record-setting wind energy output of 10,012 MW.”
Casey leads off her report by contrasting Xcel’s announcement with U.S. reality TV star and presidential candidate Donald Trump’s dismissal of wind energy’s cost-effectiveness. Trump “has trash-talked his own country’s up-and-coming wind energy industry all through the 2016 campaign,” she writes, “but it doesn’t look like the gigantic energy services company Xcel got the memo.”