Xcel Energy announced deals this week that will boost its use of wind power in the Upper Midwest by 33 percent, demonstrating that wind is increasingly cost-competitive with fossil fuels, even natural gas.
The Minneapolis-based utility is buying into three 200-megawatt wind farm projects, enough to power 180,000 homes, saying they will save its customers $180 million over 20 years. Xcel already has 1,800 megawatts of wind capacity up and running in the region, but it’s hungry for more. From an Xcel press release:
“Wind prices are extremely competitive right now, offering lower costs than other possible resources, like natural gas plants,” said [Xcel official Dave] Sparby. “These projects offer a great hedge against rising and often volatile fuel prices.”
At the same time, the projects will reduce carbon emissions by 1.2 million tons each year in Xcel Energy’s Upper Midwest service territory, where the company already is on track to reduce carbon emissions by 30 percent by 2020 from 2005 levels.
“It’s a huge announcement,” said Joe Sullivan, a regional policy manager for Wind on the Wires, a St. Paul-based industry group. “What it shows is that when it comes to adding new [generation] resources, wind is floating up to the top. It is beating out other resources in the market.”
Xcel said it will buy power from two planned wind farms near Windom, Minn., and near Jamestown, N.D., being developed by Geronimo Energy of Edina, and take ownership of another wind farm planned by RES Americas Development near Austin, Minn.
Financial terms of the deals were not disclosed, but Geronimo said that each of its 200-megawatt wind farms will cost about $350 million. All three projects are expected to be operating in 2015 or earlier.