AEP Will Purchase World's Second-Largest Wind Farm
Chicago-based wind generation developer Invenergy and GE Renewable Energy announced on July 26 construction of the $4.5-billion, 2,000-MW Wind Catcher Energy Connection in Oklahoma—set to be the largest wind farm in the U.S. and second-largest in the world.
The announcement follows the Louisiana Public Service Commission's vote to ease regulation that will allow Southwestern Electric Power (SWEPCO), a subsidiary of American Electric Power, to pursue purchasing the project.
Quanta Services Inc. (NYSE: PWR) said on July 31 that AEP selected it as project transmission-line engineering, procurement and construction contractor. It said the line was 350 miles. The firm did not reveal the contract value, but said it was "the largest project award in Quanta's history."
Jamie Cook, lead construction analyst for Credit Suisse, estimated the contract at "north of $1 billion."
SWEPCO and Public Service Co. of Oklahoma, also an AEP subsidiary, will share the project cost and will own the wind farm once construction is complete, which is expected to be in 2020. The former will invest $3.2 billion and own 70% of the project, and its peer unit will invest $1.3 billion.
The wind generation is expected to save utility customers $7 billion over 25 years, AEP said.
"AEP is moving to a cleaner energy future, driven by new technologies and the expectations of our customers and shareholders," Nicholas Akins, AEP's CEO said in a statement.
Regulators in Louisiana, Arkansas, Texas and Oklahoma must approve plans to purchase the wind farm from Invenergy. The developer will operate the project for five years.
Construction began on the 800-turbine project in December 2016 to take advantage of the federal production tax credit. The project will support 4,000 direct jobs annually during construction, AEP said.
The project also includes a 350-mile dedicated extra-high-voltage power line from the Oklahoma Panhandle to Tulsa, where it will connect to Public Service Co.
The Wind Catcher project will generate electricity from 800 GE-manufactured turbines, each 2.5 MW, the company said.