Dive Brief:
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Xcel Energy has issued a request for proposals (RFP) for up to 1,500 MW of wind power either through power purchase agreements or build-own-transfer arrangements.
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Eligible projects must be 75 MW or larger and built through power purchase agreements or build-own-transfer arrangements. Projects must be located within Midcontinent ISO in a state served by Xcel — Michigan, Minnesota, North Dakota, South Dakota or Wisconsin.
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Responses to the RFP are due by Oct. 25, 2016; Xcel expects to file for regulatory approval of the selected projects in the spring of 2017.
Dive Insight:
Wind power hasn’t lost it juice. Thanks to falling costs and the temporary production tax credit extended by Congress last year, utilities and large corporations are keen to make big wind investments now.
“The production tax credit coming and going has made wind in-the-money and out-of-the-money at different times over the last 15 years,” Xcel Energy Colorado President David Eves told Utility Dive in April. “With the full $23/MWh PTC, wind produces energy at below the cost of a combined cycle turbine with the forward gas curve we see. That is in-the-money.”
In the midsection of the country, where Xcel has most of its operations, the average PPA price for wind in 2009 was about $55/MWh. In 2015, it was about $20/MWh, according to a Lawrence Berkeley National Laboratory report.
Xcel can increase its wind generation due to its wind forecasting technology and infrastructure investments made to deliver renewable resources to customers, the company said in a statement. In its Colorado territory, wind penetrations on Xcel's system can reach over 60% for short periods of time.
In April, the American Wind Energy Association named Xcel the country’s top utility wind energy provider for the 12th consecutive year. The utility more than doubled its ownership of wind power resources when it bought the Pleasant Valley Wind Farm in Minnesota and Border Wind Farm in North Dakota in 2015, bringing its total portfolio to about 850 MW.
Typically Xcel has contracted for wind power using PPAs from third-party suppliers, but going forward the company says it plans to own and operate more wind farms.
