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More pattern wind power in the panhandle

Pattern Energy has added to its wind power in the Texas Panhandle, with its Panhandle 2 project joining Panhandle 1 for a combined output of 400 MW.

By Tony Kryzanowski

The completion of Pattern Energy's 182-MW Panhandle 2 wind project in Carson County, northeast of Amarillo, Texas, puts an exclamation mark on the continuing journey within the state to encourage commercialization of its notable wind resources.

Together with the adjacent Panhandle 1 project-also majority-owned by Pattern Energy-the combined output of the projects is about 400 MW. Both were constructed by Minnesota-based, Mortenson Construction. In combination with its subcontractors, Mortenson generally had between 300 and 400 workers on site. They used a significant amount of local labor and suppliers on the project. Panhandle 2 construction began in late 2013 and was completed in November 2014.

The projects were developed by a private company, Pattern Development, whose operating assets were recently purchased by public company Pattern Energy, which has a right-of-first-offer agreement with Pattern Development on any projects it commissions. This past November, Pattern Energy Group Inc. closed the acquisition of 147 MW of owned interest in the Panhandle 2 wind project from Pattern Energy Group LP.

Panhandle 2 was completed on schedule and on budget, growing the company's operating fleet to 10 wind facilities with an 11th project soon to be completed, said Mike Garland, president and CEO of Pattern Energy. "This facility is an excellent addition to our portfolio and will increase our revenue and cash available for distribution. We now have two premier wind facilities in the Panhandle, located on one of the best wind sites in the U.S." The Texas Panhandle has been recognized as one of the fastest growing wind power producing regions in the United States, and that is no accident.

The driver behind both the Panhandle 1 and 2 projects began in the state's legislative halls in 2005 when political leaders recognized that Texas owned a considerable wind resource, but that there was a great need to encourage development of transmission infrastructure to tap into that resource. As a result, the state's Public Utilities Commission (PUC) identified, and will manage, five Competitive Renewable Energy Zones (CREZ).

"The state of Texas, the PUC, and the Electric Reliability Council of Texas (ERCOT) really got it right on CREZ," says Glen Hodges, Pattern Development VP of Business Development and project manager on both Panhandle projects. "The CREZ process should be held out as a model to the rest of the nation."

He adds that the challenge for the state was the old chicken and egg scenario. While legislators wanted to encourage more investment in wind energy and understood that more transmission lines to CREZ areas like the Panhandle needed to be built, it was hard to determine what should come first-commitments from developers like Pattern Development for wind projects or commitments from transmission developers that would encourage development. The solution, according to Hodges, was to develop a process where wind project developers "had some skin in the game" so that if transmission developers built the transmission infrastructure, there was a financial commitment upfront from wind power developers to proceed with projects.

 
  

More than a dozen transmission developers won rights to install transmission lines to the various CREZ areas, and given the quality of the wind resource in the state, a significant number of wind developers made a financial commitment. For its part, Pattern Development posted several million dollars in a letter of credit to support its interest in the Panhandle area.

"It's got the best wind resource in the nation," says Hodges. "Not only does it have high annual average wind speeds but it also has very consistent wind. You don't have a situation where you have extreme gusts (which are not a good thing). You just have strong, steady wind right where you want it to be blowing to get good production out of the turbines."

The completion of the Panhandle 2 project is a good example of the steady rollout of both wind power and transmission line development into the CREZ areas; at the time of the Panhandle 2 commissioning, construction of the transmission lines to all five CREZ zones had also been completed. The CREZ program has significantly increased the current level of wind generation capacity in Texas to over 14,000 MWs, with the CREZ build-out designed to accommodate up to 18,000 MWs.

Pattern Development's Panhandle projects are tied into Cross Texas Transmission LLC's 345 kV transmission line. About 80 percent of the power generated by Panhandle 2 is being sold to an affiliate of Morgan Stanley using a financial instrument called an energy price hedge for a period of 10 years, with the remainder sold at ERCOT spot prices.

Both Panhandle projects are expected to have a significant impact on the sparsely populated area where they are situated. Located on 12,000 acres, Panhandle 2 consists of 79 Siemens SWT-2.3-109 turbines with 81 meter hub height. The wind farm is situated on 40 distinct land parcels where Pattern Energy has entered into long-term lease agreements with the landowners.

 
Both the Panhandle 2 and Panhandle 1 projects—with combined output of  400 MW—were constructed by Minnesota-based, Mortenson Construction. Panhandle 2 construction began in late 2013 and was completed in November 2014. 
  

Hodges says that the residents living in and around the Panhandle projects have been "extremely welcoming" to wind development. About 20 permanent local jobs were created from both Panhandle projects. He adds that the two wind projects combined have probably doubled the property tax base in Carson County. The lease holders, many of whom are cattle ranchers and farmers, are also very pleased to be part of the wind developments because it provides them with extra income while they can still use the land to pasture their cattle or grow their crops.

Located on the extreme southern edge of the Great Plains, the Texas Panhandle consists of the state's 26 northern-most counties and represents about 10 percent of the state's entire area but only 1.7 percent of the state's total population.

Pattern Development estimates that each of the Panhandle projects will inject about $100 million into the area over its lifetime.

The federal government also helped to make both Panhandle projects more economically viable as they qualify for the federal wind production tax credit, which gives wind developers a 2.2-cent tax break for every kilowatt-hour of energy produced during the first 10 years of operation.

The geographic area around Panhandle 2 is flat to gentle rolling hills of grazing pasture.

"It's a dry climate with about 20 inches of rainfall per year," says Hodges. "It does have four seasons, so you will get snow and cold weather, and it is hot and dry in the summer but nothing too extreme on either end." Pattern Development opted for the cold weather package from Siemens for the turbines and nacelles so that the installation could operate continually through cold weather.

 
The lease holders of the land where the Pattern Panhandle projects are sited—many of whom are cattle ranchers and farmers—are pleased to be part of the wind developments because it provides them with extra income while they can still use the land to pasture their cattle or grow their crops   
  

Hodges says that the wind resource was so powerful at times in the vicinity of the Panhandle 2 project that Mortenson Construction had to choose carefully when to mobilize its cranes to install the project's towers and turbines. The rows of turbines are spaced about a mile apart to give the wind enough space between the rows to recover its force and to minimize wake effect. Within the rows, the turbine towers are spaced three to four rotor diameters apart.

Mortenson Construction was responsible for the design and construction of 21.3 miles of access roads for the Panhandle 2 project, including public road improvements, foundations, erection of the Siemens turbines, electrical underground collection system, overhead collection, met tower, a 345kV substation, and a 10-mile double-circuit transmission line that will connect with a potential future Panhandle 3 project.

In addition to Siemens supplying the turbines and towers, the pad mount transformers were supplied by
General Electric, and the main power transformers by HICO America. Other subcontractors working on the project were Rebar Setters Inc., Complete Conveyor, Van Eaton Ready Mix, American Site Builders, Trench Tech Inc., and UCS. Many of the same companies and people who worked on the Panhandle 1 project also worked on the Panhandle 2 project, which saved time on the construction of each project.

Mortenson Construction says that one of the major challenges it faced was that the Panhandle 2 project was built in an area congested with both new and existing oilwells. To manage this risk, the team used ground penetrating radar (GPR) to identify any unknown utility lines. This effort was critical to providing information to support design and pricing for the energy collection system. Aerial topographic surveys and falling weight deflectometer tests were also used to facilitate and optimize roadway and earthwork design during the pre-construction phase.

The wind project will generate power in a way that preserves the region's precious water resources and will offset approximately 903,000 tons of carbon dioxide each year from coal-fired generation, which is the equivalent of taking more than 177,000 cars off the roads. It will also provide power to about 60,000 Texas homes.

Siemens, the turbine and nacelle supplier, says the wind turbines were equipped with U.S.-made rotor blades and nacelles. The rotor blades were manufactured at its wind turbine blade facility in Fort Madison, Iowa. Each of the 237 rotor blades has a length of 53 meters. The company's Hutchinson facility in Kansas assembled the 79 nacelles.

Siemens is also providing service and maintenance on the project. The service agreement includes remote monitoring and diagnostic solutions and advanced weather forecasting techniques that Siemens says will ensure the long-term reliability and performance of the turbines and enable predictive maintenance at well-timed periods, improving the plant's output.

Hodges says that Pattern Development is actively considering other wind power projects in Texas, given the state's support for the industry through facilitating the construction of the necessary tie-in transmission infrastructure.

 


January/February 2015