Dive Brief:

• Allete Clean Energy, an unregulated affiliate of the vertically-integrated, investor owned utility Minnesota Power, acquired Armenia Mountain Wind from the AES Corp. for $108 million and debt assumption. It is the wind developer-operator’s seventh wind project investment in 15 months.
• The 100 MW, 67 turbine Pennsylvania wind project was built in 2009 and holds 25 year power purchase agreements for its output. Allete previously acquired five smaller projects in Iowa, Minnesota, and Oregon and is developing a North Dakota project for Montana-Dakota Utilities.
• Minnesota Power is similarly moving toward renewables as it shutters its coal generation to comply with increasingly stringent pollution regulations. The utility has built three North Dakota wind projects since 2012.

Dive Insight:

Allete Clean Energy, formed in 2011, says it will continue to acquire renewables generation and is considering diversification through the purchase of utility scale solar.

Minnesota Power has moved from 5% renewables in 2005 to about 25% renewable in 2015 and is therefore well ahead of the state’s 25% renewables by 2025 mandate.

Renewables produced 21% of Minnesota’s electricity in 2014, up from 12% in 2008, according to the Bloomberg New Energy Finance 2015 state factsheet. Natural gas’s percentage of electricity generation grew from 5% in 2008 to 13% in 2014. Coal’s share of electricity generation fell from 59% to 46%in the same period.

Bloomberg’s levelized cost of electricity analysis shows Minnesota’s unsubsidized wind is economically competitive with combined cycle gas turbines (CCGTs). Subsidized solar PV, small hydro, and CHP are cheaper than nuclear and almost cheaper than CCGTs using natural gas. Other renewables like waste-to-energy, hydro, and biomass could compete, if subsidized. CCGTs using natural gas could become competitive if natural gas prices in the Northeast fall below the cost of Minnesota’s natural gas supply from Canada.