Successful wind farm development requires strong wind resources, available transmission capacity and a demand for power at an attractive price – fortunately for Broomfield, Colo.-based Renewable Energy Systems (RES) Americas, the 150 MW Border Winds project features all three.
RES is the developer and engineering, procurement and construction contractor behind the project, which is located near the Canadian border in North Dakota. Glen Davis, RES’ chief commercial officer, says the site possessed the attributes required for RES to acquire the project from Sequoia Energy in August 2013. At the time of the sale, the project was partially permitted and land lease agreements were secured for the 23,000-acre site.
“The early stages of the project were driven by a belief that a combination of demand for power, attractive pricing, desire for renewable attributes, location on the grid and other factors would ultimately lead to a transaction, such as a power purchase agreement or asset sale, with a customer,” notes Davis.
In August 2013, Minneapolis-based Xcel Energy concurred and agreed to purchase the project for its Northern States Power Co. of Minnesota subsidiary once the project is finished. The two parties are also involved in a similar build-and-sell transaction that involves the 200 MW Pleasant Valley Wind Project, located in Mower and Dodge counties, Minn. Vestas – by virtue of a September 2013 master supply agreement with RES – will outfit both wind farms with V100 2.0 MW wind turbines.
RES recently got the go-ahead from the North Dakota Public Service Commission to begin construction on the Border Winds project, and in July, the developer closed on a $222 million construction loan from a consortium of lenders led by BayernLB and Société Générale.
Given the company’s experience with building in cold climates, Davis says RES understands the challenges inherent in building a wind farm near the Canadian border. For example, harsh winters can result in project delays.
“[Upper Midwest] winters can be pretty severe,” he explains, adding that RES will be focused on maintaining construction timelines because completing the project by the end of 2015 will make it easier for Border Winds to qualify for the production tax credit.
After construction is completed, Border Winds will interconnect at Xcel’s new Peace Garden substation and will tap the 230 kV transmission line located between Otter Tail Power’s Rugby substation and Manitoba Hydro’s Glenboro substation.
According to Xcel, the output from Border Winds will flow through the Fargo-Twin Cities line, a 345 kV line that strengthens the network for North Dakota renewable generation and ensures reliability in several areas of Minnesota and North Dakota.
The transmission line is part of a massive project called CapX2020 (short for “capacity expansion by 2020”). Led by Xcel and 10 transmission-owning utilities, CapX2020 aims to bolster grid reliability while easing congestion in MISO, the regional transmission organization responsible for the Midwest.
The Fargo-Twin Cities line was designated a multi-value project (MVP) by MISO. An MVP designation means that the project owners are able to take advantage of the cost-allocation method of payment, which was approved by the Federal Energy Regulatory Commission in December 2010. Instead of generators paying for development, 100% of the cost of developing the transmission is spread across the entire MISO footprint.
The last segment of the line (between Fargo and Alexandria) will be completed next year, according to an Xcel Energy spokesperson.
Good for ratepayers
The Border Winds project is part of Xcel Energy’s overall plan to add more than 750 MW of installed wind capacity in its Minnesota and North Dakota service territories. (For more on the North Dakota wind market, see “”.) Aside from Border Winds and Pleasant Valley, other wind farms being planned by the utility include the Odell Wind Farm, a 200 MW project located near Windom, Minn., and the 200 MW Courtenay Wind Farm, located near Jamestown, N.D.
According to Xcel, the wind farms will help the utility lock in rates for the next 20 years and insulate the company from rising fossil fuel costs.
“Border Winds is one of four new wind projects we are developing in the Upper Midwest, representing a 42 percent increase in our regional wind power capacity,” says Dave Sparby, president and CEO at Northern States Power. “Wind energy is a valuable, low-cost substitute for natural gas and other fuels right now.
“The Border Winds project will reduce customer costs by an estimated $45 million over the project’s life,” continues Sparby. “The total amount saved from the four projects is expected to be more than $220 million. At the same time, it is estimated that Border Winds would reduce carbon-dioxide emissions an average of 320,000 tons annually in Xcel Energy’s Upper Midwest territory, where we are already on track to reduce carbon emissions by 30 percent by 2020 from 2005 levels.” w
Project Profile: Border Winds
RES Americas Checks All The Boxes In North Dakota
By Mark Del Franco
The 150 MW Border Winds project, located near the Canadian border, combines ample wind resources with transmission capacity.
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