Producing power in Texas at lower wind speeds

Taaleri Energia is now producing power on its Texas wind farm at lower wind speeds, thanks to the use of Vestas V162 5.6 MW turbines, said to be the largest wind turbine working in North America.

By Tony Kryzanowski

Taaleri Energia, the largest wind power producer in Finland with projects throughout Europe, recently set up a wind operation in another large renewable energy market: Texas. In fact, the company used the project to introduce the new Vestas V162 EnVentus onshore wind turbine to North America at its first wind farm investment on this side of the Atlantic, allowing Taaleri Energia to begin to produce power at lower wind speeds than the rest of the market.

With a hub height of 119 metres and rotor span of 162 metres, the Vestas V162 is the largest wind turbine working in North America so far. Danish-based, Vestas describes the EnVentus platform as its next generation of wind turbine technology.

In March 2022, Taaleri Energia began producing power from its first renewable power project in North America—the nearly $500 million, 336 megawatt (MW) Escalade wind farm in Texas. It is the largest wind farm developed by Taaleri Energia to date and at the time of construction was amongst the 10 largest wind farms in the U.S.

The project features 45 of the 5.6 MW Vestas V162 wind turbine models. Escalade was only the second deployment of the EnVentus platform in the world.

“It produces power at lower wind speeds than the rest of the Texas wind fleet,” says Kai Rintala, Taaleri Energia Managing Director. “This means that we start producing earlier than the other wind farms when the wind starts to pick up and when the power price is higher. That’s because of the size of the rotor. It makes the turbine very attractive.”

Since the Escalade installation, Taaleri Energia has purchased the Vestas V162 wind turbine model for two other wind farm projects in Finland.

The wind farm developer expects that it will achieve at least a 10 percent boost in power production with the deployment of the 45 V162 wind turbines of a total 65 wind turbines installed at Escalade, compared to older model wind turbines. The project also consists of 20 Vestas 4.5 MW V150 units.

The Escalade wind farm is located in Truscott, Texas in Knox County, about 190 miles from the Dallas-Fort Worth Metropolitan area. It will provide enough renewable power for 115,000 homes and offset 604,000 tonnes of carbon dioxide emissions per year.

Taaleri Energia bought the project from NorthRenew Energy and Chermac Energy in 2017. The company began developing the project further toward Notice To Proceed in-house with the assistance of NorthRenew Energy, recognizing the high quality wind resource, the large land base offered by the project’s location, and the liberalized energy market in Texas.

“The ERCOT (Energy Reliability Council of Texas) market for electricity has similarities in structure and operation to the Nord Pool electricity market in the Nordic countries, a market that we are very familiar with,” says Rintala.

Taaleri Energia designed the Escalade project for 336 MW because of the economic benefits in building to this scale. Up to that point, most of the wind projects developed by the company were under 100 MW.

It was also located in close proximity to AEP-owned transmission infrastructure able to absorb the 336 MW of power that the Escalade project was designed to generate, and to take the power to large electricity consuming population centres.

A further benefit was that the company experienced a welcoming environment from the state of Texas, Knox County, and local landowners as well as a favorable permitting environment. Energy consumption is also expected to grow in Texas, given the current economic growth taking place. Texas is, in fact, the top wind power generating state in the U.S.

At the time of Escalade’s commissioning, Texas claimed nearly 23,000 MW of wind power production capacity, representing 25 percent of the total installed in the U.S. Wind power is playing a critical role in helping the state avoid blackouts during heat waves, and that was tested mightily during the record setting heat waves that punished the state this past summer.

	Taaleri Energia expects the new Vestas V162 EnVentus wind turbines used on its Escalade wind project in Texas will achieve at least a 10 percent boost in power production, compared to older model wind turbines.

Construction of the Escalade project began in the middle of 2020, becoming operational in March 2022. While Mortenson Construction, as the Balance of Plant contractor, brought the project to life and Royal SMIT provided the transformers for the Escalade project, Taaleri Energia demonstrated its ability to navigate the often complex and highly sophisticated financial transactions that are necessary to make a project of this magnitude a reality.

For example, the majority of the power produced by the wind farm is contracted under a 10-year Proxy Revenue Swap with Allianz. This is a financial instrument used by the Escalade owners to protect themselves against price and wind resource volatility, providing a measure of financial stability.

Overall, the company says the project reflects Taaleri Energia’s significant financial and investment acumen to not only participate in the global transformation to renewable power, but also its ability to tap into the significant amount of investment capital available to finance these projects. Rintala says that the biggest learning curve for the company in entering the U.S. market compared to their other investments was tax equity financing. Berkshire Hathaway Renewables (BHR) was their tax equity partner on this project.

The nearly $500 million, 336 megawatt Escalade wind farm in Texas is the largest wind farm developed by Taaleri Energia to date and at the time of construction was amongst the 10 largest wind farms in the U.S. Mortenson Construction was the Balance of Plant contractor on the project.

As the Escalade project evolved, so did its ownership structure, with Taaleri Energia’s renewables fund—a fund managed by AIP, which is a Danish infrastructure fund manager—and Akuo Energy, a French independent power producer, acquiring equity stakes in the project.

Akuo Energy was a key addition to the partnership as it was the Construction Manager and is the Technical and Commercial Asset Manager for the project. It oversaw the work done by both Vestas and Mortenson Construction on the owners’ behalf. They also had experience working within the ERCOT system by previously having developed their own wind farm. Vestas is providing operations and maintenance services for Escalade under a 30-year contract.

Rintala says that the project is having a significant positive financial impact on the state in general and Knox County in particular by providing around 10 permanent jobs as well as decades-long tax revenue to the county and lease payments to local landowners. And by deploying more powerful individual wind turbines, Escalade is able to generate its designed 336 MW of power using fewer turbine locations, thus reducing its footprint on the land base.

While hub heights on the Vestas V162 turbines on the Escalade project measure 119 metres, Vestas offers a wide range of standard hub heights and modes of operation that can be combined with an extensive list of technology options to create customized solutions to suit the needs of each project. The swept area of the V162 rotors is 20,000 square metres, representing the largest rotor size in the Vestas portfolio. It describes this model as designed for low to medium wind sites with extensive application in high wind speeds.

Turbines began arriving for installation at Escalade in spring 2021. The project was under construction in the midst of the COVID-19 pandemic. Rintala says that the project was designed from the start with the deployment of the Vestas V162 wind turbine in mind and they were able to lock in prices as a measure of control as the project unfolded. There were no delays to the project related to the pandemic or supply chain issues, but the project commissioning was delayed by about four months largely due to Texas’s notorious weather. A bout of heavy and repeated rain in mid-2021 resulted in a lot of standing surface water that hampered construction for a time as construction crews waited for water to recede so that they could access and continue with project installation.

“I have to say that the site team of our construction manager and Vestas as the turbine supplier and installer worked extremely hard to be able to successfully finalize the project,” says Rintala.

He added that they included the cold weather package option with the Vestas wind turbines, which allows the turbines to operate efficiently at lower temperatures, again given Texas’s demonstrated history with harsh winter weather that a few years ago caused blackouts to large areas of the state due to cold weather, snow and ice.

Taaleri Energia was not totally dependent on project components shipped from offshore—a portion of the components for the wind farm were fabricated and shipped from within the U.S. Vestas has a nacelle factory in Brighton, Colorado and a blade factory in Windsor, Colorado which is slated to fabricate the company’s new V163-4.5 MW turbine as well as the 2 MW platform. The two factories represent an investment of over $1 billion by Vestas in the U.S.

Now that the Escalade project is operational, Taaleri Energia continues to investigate opportunities in Texas, and in particular battery storage within the ERCOT system to help balance price volatility going forward since wind and solar, abundant in Texas, are intermittent power sources. They have experience in this regard as they have recently invested in their first battery storage facility—a 30 MW installation in Finland.

Rintala says that implementation of the new Inflation Recovery Act (IRA) in the United States and its renewables development incentives “is certainly making the market more attractive”.

“The IRA is providing long term stability for production and investment tax credits for wind, solar and battery storage,” he adds. “This is a significant improvement. Investors like us like stability and no surprises.”

 Q4 2023