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US utility NIPSCO backs 800MW of wind as it prepares to ditch coal

NextEra, Apex and EDPR secure deals as coal-reliant Midwestern utility points to wind as cheapest source of power

The Northern Indiana Public Service Company (NIPSCO), a coal-heavy utility in the US Midwest, announced plans to buy 800MW of wind energy from new projects in its home state by the end of 2020 – with wind trouncing all other technologies on the table in a competitive procurement process.

Further, NIPSCO says it will hold a second procurement and announce more renewables projects later this year.

Developers NextEra Energy Resources, Apex Clean Energy and EDP Renewables North America will build a trio of projects in Indiana for NIPSCO in time for the full production tax credit (PTC), adding further fuel to the raging US wind market as corporations and utilities race to take advantage of the PTC’s last years by buying federally subsidised wind power.

NIPSCO, a unit of investor-owned utility group NiSource, still gets more than half of its power from a 1.8GW fleet of ageing coal plants in Indiana built in the 1970s and 1980s.

The Merrillville, Indiana-based utility has not brought any utility-scale renewables onto its system since a single 100MW wind offtake deal signed a decade ago with Avangrid Renewables.

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However, last year NIPSCO signalled that it was rethinking its view on the competitiveness of renewables, unveiling an energy strategy that contemplated closing most of its remaining coal plants by 2023 and all of them by 2028, saying the “likely replacement options” were wind, solar and batteries.

NIPSCO launched a request for proposal, and after sifting through a range of bids – including a number of projects integrating renewables and storage – it settled on three standalone wind projects.

NIPSCO will buy power directly from NextEra’s 400MW Jordan Creek and Apex Clean Energy’s 300MW Roaming Bison projects. Meanwhile, it will enter a joint ownership venture for EDP Renewables’ 102MW Rosewater project.

That approach mirrors a number of US utilities that are choosing a mixture of outright ownership and power-purchase agreements with renewables projects, as they gain comfort with the technology.

The turbine suppliers were not immediately announced.

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"We're excited for the opportunity to add more home-grown renewable energy in Indiana," says Violet Sistovaris, NIPSCO president.

NIPSCO's regulated utility model means it will pass on the cost of the new wind farms – and, eventually, of closing down its coal plants – to its customers. The shift from coal to more renewables will save its customers an estimated $4bn over the lifetime of the projects, Sistovaris says.

Indiana has amassed an impressive 2.3GW of wind capacity, more than any other state east of Illinois, according to the American Wind Energy Association.

With plenty of land, a good wind resource across the northern half of the state, and a position within the PJM Interconnection – the largest US wholesale power market – Indiana remains an attractive state for further wind development.

NIPSCO says that its preferred plan for replacing its coal-fired generation would result in a more than doubling of Indiana's renewables capacity.

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