Xcel works out deal for cutting-edge wind/solar repowering in Minnesota

Old wind farm would get replaced with hybrid wind turbine/solar project

Northern States Power d/b/a Xcel Energy on Jan. 6 asked the Minnesota Public Utilities Commission for approval of an Amended and Restated Power Purchase Agreement with Woodstock Hills LLC that would cover the repowering of an older wind farm.

Said the application: "The Woodstock Hills repowering project will demonstrate an innovative hybrid technology that integrates 9.2 MW of wind generation and 1.0 MW of solar generation. The project will be located in the same area as the initial wind farm in Pipestone County in southwestern Minnesota.

"Woodstock Hills is one of several early wind farms that may be facing an uncertain future. Given the challenges early wind and other renewable energy projects are facing today, such as operation and maintenance (O&M) and fuel costs, the Company anticipates that other projects may come forward in the near term with various repowering or restructuring proposals crafted to help ensure their long-term viability. Thus, the Company may need to develop a set of guidelines to review and determine whether such proposals are in the public interest and benefit customers. When developed, we will provide our guidelines to the Commission, the Department of Commerce and other stakeholders for review and feedback."

Xcel said it believes that the Woodstock Hills repowering proposal is prudent because:

  • The project provides an opportunity to further evaluate the integration of wind and solar generation on the Xcel transmission system;
  • The project will be able to use its existing substation and interconnection infrastructure, thereby reducing capital costs;
  • The blended pricing structure that provides the same price for the wind and solar generation from the project results in a solar price substantially below recent offers from other solar energy developers; and
  • The repowering proposal will help ensure the continued operation of the project for the extended term of the PPA.

If approved by the commission, Xcel will own the wind and solar energy renewable energy credits (RECs) generated by the Woodstock Hills project. No change in rates will occur until construction of the project and acceptable delivery of energy under the project begins, which is estimated to be by Sept. 30, 2017.

The Woodstock Wind Farm was initially developed as 10.2-MW wind facility consisting of seventeen V44 first generation wind turbines. It was interconnected by a 69-kV line to a 10.2-MW substation. The PPA between Xcel and Juhl Energy was approved by the commission for a term of 30 years from the date the project achieved commercial operation. The PPA expires in 2034.

The PPA gave ownership of the project RECs to the developer for the first 10 years of the project. The PPA also provided for a declining energy payment rate, at least in part based on the assumption that REC values would substantially increase over time. In the summer of 2015, Juhl Energy informed Xcel that the project would likely face financial insolvency in the near future due to higher-than-anticipated operation and maintenance (O&M) costs and lower-than-anticipated REC prices. Xcel indicated it would not be able to support a price adjustment unless Juhl Energy brought forward a proposal that provided added value for customers.

Juhl Energy initiated the repower, then sold the project to Consolidated Edison

In September 2015, Juhl Energy submitted a concept proposal for a rebuild of the Woodstock Hills project utilizing a unique wind and solar hybrid technology, although the proposal did not include pricing detail. Xcel indicated an interest in the concept subject to receiving a specific pricing proposal. In November 2015, Juhl Energy submitted an innovative, hybrid pricing proposal for the rebuild project that provided up-front capital savings as well as lower O&M expenses.

In April 2016, Juhl Energy submitted a revised proposal with decreased pricing that Xcel determined had merit. Given the improved pricing and the appeal of further local renewable energy development, the utility entered into contract negotiations with Juhl Energy. In August 2016, parties were able to reach agreement on an Amended and Restated PPA that offers benefits for Juhl Energy and Xcel.

On Oct. 20, 2016, the final terms and conditions of the PPA were agreed upon, and the PPA was executed by Juhl Energy and Xcel. Subsequently, Xcel was notified by Juhl Energy that the Woodstock Hills hybrid project had been sold to Consolidated Edison. The ownership change does not alter the terms and conditions of the PPA.

Woodstock Hills is a 10.2-MW repowering project located in Pipestone County in southwestern Minnesota. Woodstock Hills will consist of 9.2 MW of wind from four new, large-rotor General Electric (GE) 2.3 MW wind turbines and 1 MW of solar panels to be connected to the wind turbines.

Woodstock Hills will use new GE wind integrated solar energy (WISE) hybrid technology. As such, the 1 MW of solar panels will be connected to the wind turbines and will feed energy into the wind turbines prior to interconnection of the project to the transmission system. Control technology is employed to ensure that simultaneous wind and solar production does not exceed the 10.2 MW capacity of the interconnection.

GE estimates that two-thirds of the time a wind turbine’s converter is under-utilized, depending on wind speeds. The WISE technology used in conjunction with the Woodstock Hills project will tap into the excess converter capacity and thereby achieve capital cost savings.

Woodstock Hills on March 16, 2016, submitted an Appendix 1 request to the Midcontinent Independent System Operator (MISO) for a modification to its existing generator interconnection agreement (GIA). Woodstock Hills anticipates receiving approval of its amended GIA in early 2017. The repowering project will replace the seventeen 600-kW Vestas V-44 turbines with the four GE 2.3-MW turbines, and will add a 1 MW fixed tilt high performance solar photovoltaic array using two GE 500 kW (DC) photovoltaic solar plants consisting of crystalline silicone modules.

Barry Cassell
About the Author

Barry Cassell

Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 26 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.

Barry can be reached at barryc@pennwell.com.