Alliant Energy Corp. will build another wind farm even though its two regulated utilities are already on track to comply with Wisconsin and Iowa renewable energy targets.
The Madison company will build a 100-megawatt wind farm in Franklin County, Iowa, by the end of next year, company Chairman and Chief Executive Bill Harvey said Thursday. In an unusual move, the $235 million wind farm will be built by the parent company rather than its Wisconsin or Iowa utility.
Power generated by the wind project could be sold to either of Alliant’s two utilities – Wisconsin Power & Light Co. in Madison or Interstate Power & Light Co. of Cedar Rapids, he said. It’s also possible Alliant will sell the power to other companies or into the Midwest wholesale power market.
The company had ordered 500 megawatts of turbines from Vestas several years ago, in anticipation of expanding renewable energy mandates in both Wisconsin and Illinois. Those mandates never emerged amid regulators’ and political leaders’ concern about the short-term impact of wind power investments on utility customers’ rates.
As a result, Alliant was left with about 60 extra turbines, equivalent to about 100 megawatts of power, after building 200 megawatts of wind power in Iowa and another 200 built in Minnesota to meet Wisconsin’s renewable portfolio standard.
The company would have preferred to have one of its utilities build the wind project, Harvey said, but the wind regime is so strong and transmission network is robust enough in the area of the project that it makes sense to proceed with the project.
The Whispering Willows wind farm in Iowa has a capacity factor of 38%, much higher than the Bent Tree Minnesota wind farm, which is performing better than expected and has a capacity factor of 29%.
“One of the greatest constraints to development of more wind resources in this country is transmission, and we’ve got a great site with good transmission,” Harvey said.
As part of a strategy to deal with environmental rules affecting coal-fired power plants, Alliant also announced that it plans to build a new natural gas-fired power plant in Iowa by 2016. Alliant forecasts that 15% of its coal fleet will be retired by the end of the decade.
The natural gas plant would cost $650 million to $750 million and would be part of Alliant’s Iowa utility.
The plant will also help the company’s Iowa utility meet power demand to help it replace the power it now buys from the Duane Arnold nuclear plant.
Negotiations with NextEra Energy Resources, which owns Duane Arnold, stalled to the point that Alliant now expects it won’t continue to buy the power generated by the reactor after 2014, Harvey said. Negotiations have proceeded better concerning a new agreement to buy power from the Kewaunee nuclear plant in Wisconsin, he added.
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