Faster Wind Speeds Sweep Turbine-Strewn US Midwest in Q4 2022

Markedly higher-than-normal wind speeds swept across the heart of the US in the fourth quarter of 2022, with mid- to high-single-digit weighted-average deviations, possibly boosting wind performance in states that They have bet heavily on the renewable energy source.

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Nearly half of the US states, operating more than 200 MW of wind power, experienced below-normal wind speeds in the fourth quarter of 2022. However, in areas in positive territory, states within The Midcontinent ISO and Southwest Power Pool, where wind weighs heavily on the generational balance, experienced particularly dramatic jumps.

This likely benefited portfolio owners with large Midwest holdings, including Allette Inc., Alliant Energy Corp., Berkshire Hathaway Inc. and Xcel Energy Inc.

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On average, winds blew 0.9% faster than the norm across the US and Canadian wind shares, which expanded 2.2% sequentially over the quarter and 6.2% overall in 2022. Overall, speeds were above normal in 17 US states and seven Canadian provinces. with projects west and southwest of the Great Lakes experiencing particularly dramatic deviations. However, the average wind speed of wind portfolio leader Texas, which operates a quarter of wind capacity in the US and Canada and has an additional 77 GW of wind power in the pipeline, retreated 3%. of the rule.

The Dakotas and Minnesota top the positive deviation tables, with analyzed wind speeds greater than 8% from their 20-year averages. The Midwestern states of Wisconsin, Iowa, and Illinois are not far behind, with solid mid-single-digit deviations. Hawaii and the Pacific Northwest bring up the rear, with Hawaii posting double-digit declines, and Oregon and Washington experiencing 6.7% and 8.2% drops from the norm, respectively. Farther south along the West Coast, California also fell, but comparatively more palatable at 2.3%.

With about 12 GW of combined wind capacity, Minnesota and the Dakotas account for less than 9% of the US operating total, but wind power plays a comparatively critical role in the local energy mix, as it does in several other states through through relatively windy MISO and SPP. Wind capacity represents 33% of Minnesota’s generating fleet. The metric hovers around 45% in North and South Dakota. Farther south, Iowa has the second largest wind portfolio in the US, with wind power accounting for more than 52% of Iowa’s generation assets.

The fourth quarter speed increase in the US heartland likely benefited wind capacity owners with a strong concentration of their wind operations in the region. Deviations from the wind speed potential can affect the company’s profits. NextEra Energy Inc., for example, reports that a 1% change in its wind production index causes a 1-cent change in EPS.

With a wind generation fleet exposure of nearly 53% to Minnesota, North Dakota and South Dakota, Xcel Energy Inc. posted the largest increase in portfolio average wind speed among the top 10 owners of US and Canadian operating wind capacity: 4% higher than their 20 annual average in the fourth quarter. Sixteen of the 19 Xcel-owned wind projects had above-average speeds during the period, with nine of them experiencing variations greater than 8%. That said, the company’s two largest wind projects, the Colorado-based 600 MW Rush Creek wind farm and the New Mexico-based 522 MW Sagamore wind project, were among the three in negative territory, putting pressure on the average speed of the Xcel wallet.

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In the medium operator space, or companies that have between 1,630 MW and 3,100 MW of wind capacity, wind speed deviations from the norm across the portfolio ranged from negative 1.7% for Duke Energy Corp. and 6.9% in Alliant Energy Corp. Nearly 77% of Alliant’s wind projects are in Iowa; another 11% are based in Minnesota. Alliant’s Minnesota-based 201.3 MW Bent Tree wind farm, powered by winds that have averaged 7.6 meters per second over the past 20 years, benefited from a 9% jump above the norm. In Iowa, the company’s 299.3 MW Upland Prairie wind farm (New Wind) and the 199.3 MW Golden Plains wind project, also driven by 20-year average wind speeds of around 7.6 meters per second, recorded deviations of 8.8% and 8.2%, respectively. .

NextEra Energy is the largest owner of wind capacity in the Dakotas, with 1,650 MW in North Dakota and 591 MW in South Dakota. However, this represents less than 11% of the company’s overall wind portfolio, the largest in the US and Canada, at more than 21,000 MW. Nearly half of NextEra’s wind portfolio is based in Texas, Oklahoma and Colorado, with Texas alone accounting for a quarter of the total. All three states experienced decreases in wind speeds in the fourth quarter, which influenced NextEra’s portfolio weighted average.

NextEra’s Pacific Northwest wind projects didn’t help, as the 25 MW Vansycle I Wind Project, the 98.9 MW Vansycle II Wind Power Center and the 122.8 MW Stateline Energy Center (OR) in Oregon The US and Washington experienced negative speed variations of greater than 10% Overall, NextEra’s portfolio average wind speed remained relatively close to the 20-year average in the fourth quarter, increasing slightly by 0.5%. This compares with a 0.6% drop in the prior-year period, despite dramatic negative deviations in the company’s largest markets, including a 9.3% decline in Texas. NextEra’s constant company-wide wind power averages arguably illustrate a well-diversified portfolio.

The wind speed at 100 meters above the ground is measured from the reanalysis of the fifth generation European Center for Medium-Range Weather Forecasts. The data is available at quarter-degree latitudes and longitudes, a space of just over 27.5 kilometers. This analysis compares the fourth quarter wind speed values ​​with the 20-year average wind speed for the corresponding period.

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Kristin Larson, Monesa Carpon, and Joseph Reyes contributed to this article.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.