Xcel Energy is to start construction of its 522MW Sagamore wind power project in eastern New Mexico in the fourth quarter, the final and largest piece of a 1.23GW expansion in the southwestern US state and neighouring northern Texas Panhandle region.

Vestas will supply 240 turbines for the $900m project, set to generate electricity for almost 200,000 homes, according to the Minneapolis-based developer, which is running neck-and-neck with Berkshire Hathaway Energy for having the most wind power on its system among US utilities.

Scheduled for late 2020 completion, Sagamore will be the largest wind farm in New Mexico.

David Hudson, president of Xcel utility Southwestern Public Service Company, serving both states, said the facility will pay for itself in fuel cost savings and will be among the cheapest generating resources on its system, which also comprises natural gas (49%), coal (30%) and solar (2%).

Chicago-based Invenergy developed Sagamore before entering into an agreement for Xcel to acquire the project.

In June, Xcel completed the 478MW Hale Wind Project near Plainview, Texas, on time and $60m under budget. As part of its expansion, Xcel has also begun purchasing 230MW of power capacity from two wind farms in the region owned and operated by NextEra Energy Resources.

Last October, chief executive Ben Fowke told analysts that Xcel expects to have 11.5GW of wind on its system by 2021, the most of any electric utility in the western hemisphere.

Xcel owns three major utilities serving 3.3 million customers in Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. Its wind investment programme is called Steel for Fuel.

“The name Steel for Fuel comes from our ability to put steel, in this case wind farms, in service at a price that is cheaper than the fuel that our customers would have used that will now be displaced by that steel,” he told Recharge in late 2017. “It has to come in cheaper than what I could buy — basically natural gas, even at today’s low prices.”

Xcel has committed to an 80% reduction in carbon emissions by 2030 and aspires to provide 100% carbon-free electricity by 2050.

Wind

Xcel set to break ground on biggest wind farm in New Mexico