Army Selects Wind Firms For $7B Renewables Program
The U.S. Army has chosen 17 wind energy companies to pursue the wind power portion of its $7 billion renewable energy program.
Working with the Army Energy Initiatives Task Force (EITF), the Army Corps of Engineers’ Engineering Support Center in Huntsville, Ala., granted the wind companies Multiple Award Task Order Contracts (MATOCs). The contracts enable the companies to bid on future wind energy developments on or near Department of Defense (DOD) sites as the opportunities are announced.
No money has exchanged hands, and no projects have yet been designated. However, EITF Executive Director John Lushetsky tells NAW the task force is “actively assessing” about 200 MW of wind options. “If these become viable opportunities, specific projects will be released through the MATOC or other acquisition vehicles,” he says.
The Army is mandated to procure 25% of its energy from renewables by 2025, and in August 2012, it revealed a $7 billion Renewable and Alternative Energy Power Production for DOD Installations program. The initiative awards MATOCs to qualified renewable energy contractors, and wind energy is the third of four technologies to be awarded the contracts: The program announced MATOCs for geothermal in May and selected 22 solar technology contractors in September. MATOCs for biomass contractors are slated to be issued by year-end.
According to the Army, the renewable energy contractors that receive awards are pre-qualified to submit proposals under so-called “task orders” for future projects involving their respective technologies. The MATOCs also leverage the DOD authority to contract up to 30 years under power purchase agreements. Overall, the EITF’s Lushetsky says the Army plans to develop 1 GW of renewable resources.
Initially, 45 wind energy companies responded to the Army’s August 2012 request for proposals. Tonju Butler, procurement contracting officer at the Huntsville Center, explains that the qualified wind companies needed to meet several criteria.
For example, the companies were evaluated on their management approach and financial capability. In addition, Butler says the wind companies needed to “describe three 4 MW or larger projects that were relevant and for which the Offeror had responsibility for implementation and then for operation and maintenance for at least three years.”
The following 17 companies are receiving wind energy MATOCs:
- Dominion Energy Inc.;
- First Wind;
- Acciona Energy North America Corp.;
- Cobra Industrial Services Inc.;
- Duke Energy;
- EDF Renewable Energy;
- Emerald Infrastructure;
- Enel Green Power North America;
- EverPower Wind Holdings Inc.;
- Iberdrola Renewables LLC;
- LTC Federal LLC;
- Northland Power Inc.;
- Siemens Government Technologies Inc.;
- Stronghold Engineering Inc.;
- Turn Key Power Consortium LLC;
- VERT Investment Group; and
- West Texas Power Co.
Two of the winning companies, Dominion Energy and First Wind, both tell NAW that they look forward to working with the Army. They anticipate a post-award briefing and further guidance soon. Meanwhile, the two companies applaud the Army’s renewable energy plans.
Jim Eck, vice president of business development at Dominion, says the Army is an important customer, and his company will “actively participate with the Army in exploring ways to achieve their goals.”
First Wind spokesperson John Lamontagne adds that the wind industry, as a whole, will likely benefit from the Army’s program.
“The size of the DOD market for energy is significant, and contracting opportunities like the MATOC will demand further innovation and cost-effective solutions from industry,” he says.
Xcel Seeks Less
Colo. Wind Power
In a new filing with the Colorado Public Utilities Commission (PUC), Xcel Energy has lowered how much wind energy it is seeking to add to its portfolio in the state from 550 MW to 450 MW. In addition, the utility company wants to add 170 MW of utility-scale solar power and renew contracts for natural gas generation in order to help provide operational flexibility.
In June, Xcel Energy filed a plan with the PUC seeking 550 MW of wind energy. However, the regulator only approved 200 MW, according to Xcel spokesperson Gabriel Romero. He tells NAW that the utility company went back to the drawing board and devised a new plan, including the already-approved 200 MW of wind, that sought a mix of cost-competitive resources. He says the other 250 MW of wind makes economic sense for ratepayers and the utility, especially when combined with solar power and cheaper natural gas contracts.
As part of the proposal, Xcel is asking permission to renew 317 MW in power purchase agreements (PPAs) with an existing natural gas plant. The PPAs are set to expire, but Romero says the new contracts would be much cheaper. The natural gas-fired generation, he adds, will help ensure the utility can integrate the proposed wind and solar power, which comes from variable resources. Xcel has also proposed closing a 109 MW coal-fired plant by year-end, ahead of schedule.
Ben Fowke, chairman, president and CEO of Xcel Energy, commented on the filing.
“This plan demonstrates the right way to advance clean energy because it keeps the focus on customer costs,” Fowke said in a press release. “We have a clear track record of implementing clean energy projects that create significant customer value and keep rates affordable. This plan continues that effort, and we are positioned to take advantage of very favorable pricing for some great projects.”
“This request will add significant amounts of wind and solar energy to the system at the right price, and it makes good sense for our customers and the environment,” added David Eves – president and CEO of Public Service Co. of Colorado, an Xcel Energy company – in the release.
“For the first time ever, we are adding cost-competitive utility-scale solar to the system,” Eves continued. “The 170 megawatts we recommend would triple Xcel Energy’s current utility-scale solar in Colorado, and it equates to all of the customer-sited solar in the state of Colorado, at about one-half of the cost.”
The company currently has 160 MW of customer-sited and 80 MW of utility-scale solar generation. This new proposal is in addition to an earlier filing for 42.5 MW of on-site solar, which is still under review.
Xcel Energy says the PUC is set to rule on the utility’s new filing by Dec. 9.
The competition authorities in South Korea, the U.S., the EU and China have cleared the merger between standards bodies DNV and GL.
The new company, formally called DNV GL Group, will comprise 17,000 employees across 300 sites in more than 100 countries. The merger was originally announced in December 2012, but it required acceptance from the competition authorities. All certificates and approvals from DNV and GL will remain valid.
“We look forward to offering the best capabilities of our respective organizations to further advance the industries we serve and make a global impact for a safe and sustainable future – a safer, smarter and greener future for our customers and society at large,” comments Henrik O. Madsen, group CEO of DNV GL.
California-based wind developer Pattern Energy Group Inc. plans to launch an initial public offering (IPO) of 16 million shares. The company says it expects to raise about $290 million from the IPO, with each share of Class A common stock to be priced between $19.00 and $21.00.
According to a January filing with the U.S. Securities and Exchange Commission, Pattern Energy Group has interests in eight wind projects throughout the U.S., Canada and Chile. The wind farms include six operating and two construction projects.
The company’s operating wind farms, representing a total owned capacity of 1,041 MW, include the following: the 283 MW Gulf Wind project in Texas, 101 MW Hatchet Ridge project in California, 138 MW St. Joseph project in Manitoba, 152 MW Spring Valley project in Nevada, 101 MW Santa Isabel project in Puerto Rico and the Ocotillo project in California (the company expects the remaining 42 MW of the 265 MW Ocotillo project to enter commercial operation by year-end).
Meanwhile, the two wind farms under construction include the 270 MW South Kent project in Ontario and 115 MW El Arrayan project in Chile – both of which Pattern expects to commence commercial operations by the second quarter of next year.
Pattern Energy Group plans to use the $290 million it expects to raise to pay down debt and transfer the ownership of the wind farms into the public entity’s portfolio, as well as for general corporate purposes.
BMO Capital Markets, RBC Capital Markets and Morgan Stanley will act as joint book-running managers for the offering; BofA Merrill Lynch will act as book runner; and CIBC, Scotiabank, Wells Fargo Securities, Canaccord Genuity and Raymond James will act as co-managers.
To Use Wind Energy
Volkswagen de Mexico plans to power two automotive and engine plants with the output from a nearby 180 MW wind farm being planned in La Bufa, in the Mexican state of Zacatecas.
The automaker and Mexico Power Group signed an agreement for the yearly supply of 290 GWh of renewable energy, which, according to Volkswagen, will supply 60% of power requirements at the factories beginning in September 2014.
Volkswagen notes that the initiative is part of its “Think Blue” factory strategy, which calls for a 25% reduction of its global environmental footprint by 2018. In addition to energy savings and the reduction of the CO2 generated in its production processes, the company intends to reduce water consumption, emissions and industrial waste.
Nordex USA Inc., the U.S. arm of German wind turbine maker Nordex SE, is repaying about $2.5 million in incentives after recently announcing plans to cease production at its nacelle plant in Jonesboro, Ark.
According to an AP report hosted on The Wichita Eagle, Nordex will return $2.31 million to the State of Arkansas and $204,814 to the City of Jonesboro, funds the manufacturer had received for the production facility.
In June, Nordex announced plans to end all U.S. production and, therefore, close the Jonesboro plant and lay off about 40 workers at the facility beginning in October. The company cited weakened demand and policy uncertainty in the U.S. Nordex will continue supplying the North and Latin American markets from its factory in Germany.
DOI Concludes Va.
The U.S. Department of the Interior (DOI) completed the nation’s second competitive lease sale for offshore wind development in federal waters, garnering $1.6 billion in high bids for 112,799 acres on the Outer Continental Shelf offshore Virginia.
Virginia Electric and Power Co., a Dominion subsidiary, is the provisional winner of the sale, which auctioned a Wind Energy Area (WEA) approximately 23.5 nautical miles off Virginia Beach. According to the DOI, the WEA has the potential to support 2 GW of wind generation.
The auction lasted one day, consisting of six rounds before determining the provisional winner. Although eight companies were pre-approved to bid, only two firms participated: Virginia Electric and Power Co. and Apex Virginia Offshore Wind LLC.
The attorney general, in consultation with the Federal Trade Commission, will now have 30 days in which to complete an antitrust review of the auction. The lease will have a preliminary term of six months in which to submit a site assessment plan to the Bureau of Ocean Energy Management (BOEM) for approval. Such a plan describes the activities (e.g., installation of meteorological towers and buoys) the lessee plans to perform for the assessment of the wind resources and ocean conditions of its commercial lease.
After the plan is approved, the lessee will have up to four-and-a-half years in which to submit a construction and operations plan (COP) for approval, which provides a detailed outline for the construction and operation of a wind energy project on the lease. If the COP is approved, the lessee will have an operations term of 33 years.
The sale follows a July 31 auction of 164,750 acres offshore Rhode Island and Massachusetts for wind energy development that was provisionally won by Deepwater Wind, generating $3.8 million in high bids.
BOEM is expected to announce additional auctions for WEAs offshore Maryland, New Jersey and Massachusetts later this year and in 2014.
MECO To Use
More Wind Energy
Maui Electric Co. (MECO) has implemented operational improvements to further increase its use of wind energy.
MECO says it is now using about 91% of available wind energy, compared to an estimated 72% prior to making the changes. The increased use of wind energy results in estimated savings of more than $22 per year for a typical Maui, Hawaii, residential electric bill. With additional changes, Maui Electric expects to increase the amount of wind energy from roughly 95% to as much as 98%, which could save a typical residential customer another $7 to $10 per year.
To ensure reliable electric service, MECO notes that it uses some of its generators to balance the output from renewable energy sources, such as wind farms and photovoltaic systems. This output varies from moment to moment, depending on a number of factors, including wind speeds, wind direction, cloud cover, weather conditions and time of day.
In a report filed with the Hawaii Public Utilities Commission, MECO laid out its plan to increase its reliance on wind by modifying some of its generator control systems, reducing the use of the four generating units at the Kahului power plant and incorporating a battery energy storage system at the Kaheawa Wind II wind farm.
MECO is also planning to deactivate two of the four generating units at the Kahului power plant in 2014, retire all four Kahului generating units by 2019 and modify the use of generating units at the Maalaea power plant.
The filing also covered other likely options, such as implementing demand response pilot programs, installing a battery energy storage system or beginning measures to shift customer usage to certain time periods, upgrading transmission lines and implementing advanced metering infrastructure.
MECO’s growing use of renewable energy includes wind power, biomass energy from Hawaii’s last working sugar plantation, hydroelectric power and energy from photovoltaic systems. As of the end of 2012, 21% of the electricity used by Maui Electric customers came from renewable sources.
Issues Wind Call
The Quebec government has issued a draft regulation to procure 450 MW of wind power that includes 300 MW to be installed in the Bas-Saint-Laurent and Gaspesie-Iles-de-la-Madeleine regions. The remaining 150 MW will be generated by projects located in other regions of the province.
The power call is part of a previously announced procurement of 800 MW of wind power. The amount enables the Quebec government to meet its goal of 4 GW of wind power, as laid out in the province’s 2006-2015 energy strategy.
Hydro-Quebec Distribution will procure the energy in two phases: 225 MW of capacity by Dec. 1, 2017, and an additional 225 MW of capacity by Dec. 1, 2018. Hydro-Quebec is required to issue a call for tenders for the 450 MW block of wind power within 90 days of the publication of the regulation in its final form.
The regulation states that local or regional municipalities, First Nations or inter-municipal boards will be required to hold an interest representing more than 50% of the control in each of the projects, which may be problematic for some, according to Louis-Nicolas Boulanger, partner at law firm McCarthy Tetrault.
“The requirement for local communities to hold a controlling interest in the projects may pose challenges for private developers in the structuring of their projects,” he says. “In 2008, the Quebec government had imposed a similar requirement in connection with First Nations projects.”
Unharmed By Wind
Despite what many anti-wind groups may claim, wind farms in the U.S. have no impact on nearby residential property values, according to a new report from the Lawrence Berkeley National Laboratory (LBNL).
“This is the second of two major studies we have conducted on this topic, and in both studies [using two different data sets], we find no statistical evidence that operating wind turbines have had any measurable impact on home sales prices,” says Ben Hoen, an LBNL researcher and lead author of the report.
For the new study, the LBNL analyzed more than 50,000 home sales near 67 wind facilities in 27 counties across nine U.S. states. The lab notes that it used a number of sophisticated techniques to account for other potential impacts on home prices, including collecting data that spanned well before the wind facilities’ development was announced to after they were constructed and operating. This allowed the researchers to identify any pre-existing differences in home sales prices across their sample and any changes that occurred due to the housing bubble.
This study, which the lab says is the most comprehensive to date, builds on both a previous LBNL study as well as a number of other academic and published U.S. studies, which also generally find no measurable impacts near operating turbines.
“Although there have been claims of significant property value impacts near operating wind turbines that regularly surface in the press or in local communities, strong evidence to support those claims has failed to materialize in all of the major U.S. studies conducted thus far,” says Hoen.
“Moreover, our findings comport with the large set of studies that have investigated other potentially similar disamenities, such as high-voltage transmission lines, landfills and noisy roads, which suggest that widespread impacts from wind turbines would be either relatively small or non-existent.”
The research was supported by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy.
Study: Cost Gap
Could Ease By 2025
By 2025, wind and solar power electricity generation in the western U.S. could become cost-competitive without federal subsidies if new renewable energy development occurs in the most productive locations, according to a new report from the National Renewable Energy Laboratory (NREL).
The report, “Beyond Renewable Portfolio Standards: An Assessment of Regional Supply and Demand Conditions Affecting the Future of Renewable Energy in the West,” compares the cost of renewables (without federal subsidy) from the West’s most productive renewable energy resource areas with the cost of energy from a new natural gas-fired generator built near the customers it serves.
“The electric generation portfolio of the future could be both cost-effective and diverse,” says NREL Senior Analyst David Hurlbut, the report’s lead author. “If renewables and natural gas cost about the same per kilowatt-hour delivered, then value to customers becomes a matter of finding the right mix.
“Renewable energy development, to date, has mostly been in response to state mandates,” Hurlbut adds. “What this study does is look at where the most cost-effective yet untapped resources are likely to be when the last of these mandates culminates in 2025 and what it might cost to connect them to the best-matched population centers.”
According to NREL, the study’s key findings include the following:
Wyoming and New Mexico could be areas of robust competition among wind projects aiming to serve California and the Southwest.
NREL says both states are likely to have large amounts of untapped, developable, prime-quality wind potential after 2025.
Wyoming’s surplus will probably have the advantage of somewhat higher productivity per dollar of capital invested in generation capacity; New Mexico’s will have the advantage of being somewhat closer to the California and Arizona wind energy markets. w
New & Noteworthy
Army Selects Wind Firms For $7B Renewables Program
NAW_body NAW_body_bi NAW_body_b_i NAW_body_bNAW_body_i