The price of wind power is dipping to unheard-of lows in the upper Midwest thanks to bigger turbines, with developer Apex Clean Energy advancing a project in North Dakota that could sell its output for less than $20/MWh.

Apex, among the top US renewables developers, last month received regulatory approval for its 300MW Dakota Range project in South Dakota, to be completed in 2021 and owned by utility group Xcel Energy.

It will be the state’s largest wind farm, and Apex plans to use 72 Vestas V136-4.2MW turbines – a model of unprecedented size for the US onshore market.

Ten years ago the same project would have required 200 turbines and an offtake price “somewhere in the neighbourhood of $65/MWh”, Mark Mauersberger, Apex’s senior development manager for the Dakotas region, recently told Infocast’s SPP & MISO Markets Summit in Missouri.

“Now we’re in that $20 [per MWh] range,” Mauersberger says, a figure that does not include the production tax credit. Dakota Range will qualify for the 80% PTC if it’s completed on schedule in 2021, among the first major projects to publicly embrace the reduced credit.

“We’re regularly seeing prices in the South in the $15/MWh range, and that’s where we’re heading pretty quickly,” Mauersberger says. “We have another project in North Dakota, and its price is somewhere in that sub-$20 range – which is truly remarkable.”

Virginia-based Apex has several projects underway in North Dakota, including the 200MW Bowman and 300MW Homestead developments.

Mauersberger reveals that Apex is in discussion with a “slew of interested buyers” for its follow-on Dakota Range III and IV projects, which together tip the scale at another 300MW.

Turbines larger than 3MW are still a relative rarity in the US market, where 2.X models continue to dominate. Turbines of 3MW or larger captured just 14% of the US wind market last year, according to the American Wind Energy Association.

But turbines are getting larger in the US market, in part because of developers’ need to push into moderate wind regions. The average capacity rating of all turbines installed in the US in 2017 was 2.32MW, up markedly from 2.0MW in 2015, AWEA says.

Larger turbines with better technology are not only lowering the price of wind power, but also unlocking areas for wind development that would have been tough to crack only a few years ago.

Vestas’ V136-4.2MW model has a cut-in speed of 3 metres per second, Mauersberger says.

“Lower prices and lower cut-in speeds allow us to go into areas where maybe there’s transmission available, or great community support, or a great environmental story – but maybe the wind is not great.

“We also don’t have to build in as much maintenance as we did 10 years ago into these PPA prices,” he adds. “That all trickles down to really reasonable pricing.”

Wind

US wind price reaching new lows in the upper Midwest