The Search for Excellence in Wind Power Development

Source: Google

Despite political wrangling over the extension of tax credits to encourage renewable energy project development -- namely wind -- the United States recognized 1,032 MW of wind capacity additions in 2013. This pales in comparison to the 12,885 MW of wind capacity which was added in 2012, but there has been recent talk in Congress of renewing the expired tax credits.

While the political drama plays out and companies wait on the sidelines for the resolution, two companies are wasting no time in developing wind projects: data powerhouse Google  and electric and natural gas utility Xcel Energy .

Big data requires big energy
Currently, Google claims that it powers 34% of its operations with renewable energy, and it doesn't show any signs of stopping. The company has stated that its goal is to power 100% of the company with renewable energy sources. In pursuit of this, Google recently announced a deal with Berkshire Hathaway's MidAmerican Energy to supply its Iowa data center with up to 407 MW of wind-generated power. The power will be supplied from MidAmerican Energy's Wind VIII program -- a series of wind projects being developed in Iowa that, when completed in 2015, will provide MidAmerican Energy with the ability to produce over 3.3 GW of wind power. This latest deal will add to Google's already impressive adoption of wind power. In total, the company powers its global data centers with about 585 MW of wind-generated power from five different projects. 

Although Google is enthusiastic about sourcing its power from wind-powered facilities, it has also demonstrated a substantial commitment to investing in wind projects in which it does not utilize the generated power. Whether it's investing $75 million in the Panhandle 2 wind farm in Texas, or it's investing $75 million in the Rippey Wind Farm in Iowa, or it's investing $157 million in the Alta Wind energy Center in Southern California, Google has proven itself to be at the forefront of spurring development in wind power. In perhaps its most ambitious endeavor, Google invested a 37.5% equity stake in the Atlantic Wind Connection. Stretching offshore from New Jersey to Virginia, the Atlantic Wind Connection is a transmission line that will connect 7,000 MW of wind power generated offshore to the Mid-Atlantic region. The project, capable of producing the power equivalent of 1.9 million households, is in the early stages of development, but it further illustrates Google's commitment to encouraging development of this underutilized energy source.

No. 1 in wind power...again
It should come as no surprise at this point. For the tenth year in a row, the American Wind Energy Association, or AWEA, has recognized Xcel Energy as the No. 1 utility-provider of wind power in the United States. According to Xcel Energy, at the end of 2013 the company had 5,080 MW of wind power capacity in its portfolio of projects -- enough to power about 2.5 million households. Comprising about 15% of the utility's capacity, wind power is projected to make up about 20% of Xcel's supply by 2020, which in turn would translate to an approximate 31% reduction in the utility's carbon emissions.

Source: Xcel Energy

In another acknowledgment of its "commitment to new wind energy acquisitions and progressive wind integration efforts," the AWEA named Xcel Energy as the 2013 Utility of the Year for 2013 -- a distinction that Xcel has earned for the second time in the past five years. Although some utilities, like Exelon, contend that wind power and tax credits which spur its development have a deleterious effect in wind markets -- driving out nuclear and effecting negative off-peak pricing -- Ben Fowke, chairman, president, and CEO of Xcel Energy, acknowledges the benefits wind power offers: "We embraced wind energy early because it's clean, cost-effective and will protect our customers against rising fuel prices in the future."

Xcel owns and operates three wind farms: Grand Meadow and Nobles are located in Minnesota, and the Ponnequin wind farm is located in Colorado. All other wind power provided by Xcel is purchased under long-term contracts.

Foolish final words
Despite opposition from utilities like Exelon and politicians who oppose the renewal of wind-friendly tax credits, the industry is prospering. With diverse advocates like Google and Xcel, the wind industry is poised for substantial growth in the future.

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Scott Levine has no position in any stocks mentioned. The Motley Fool recommends Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares) and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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