North American Windpower: With Illinois Project, Goldwind Signals Its Intentions

North American Windpower: With Illinois Project, Goldwind Signals Its Intentions

By Mark Del Franco

April 2013

Goldwind USA used the Shady Oaks wind farm as a platform to demonstrate the effectiveness of its permanent-magnet direct-drive technology in the U.S. 

On the surface, the 109.5 MW Shady Oaks wind farm, located 50 miles west of Chicago, may seem like just one of the hundreds of wind projects completed in the U.S. last year. However, Shady Oaks was no ordinary wind farm for Goldwind USA, the project’s turbine supplier. As a relative newcomer to the U.S. market, Goldwind needed to demonstrate that its permanent-magnet direct-drive (PMDD) technology could operate effectively in the U.S.

Originally owned by FPC Services (a local husband and wife team), the wind farm was sold to Mainstream Renewable Energy in 2009. In 2010, Goldwind acquired the project from Mainstream following a successful joint bid into the Illinois Power Agency’s call for long-term renewables. (For more on the Illinois wind power market, see “A Plan To Fix Illinois’ Renewable Portfolio Standard.”) The project has a 20-year power purchase agreement with Commonwealth Edison.

Goldwind USA – a subsidiary of China-based Goldwind Science & Technology Co. Ltd. – understood that Shady Oaks provided an opportunity to showcase its technology for the U.S. market.

“We needed to establish ourselves in the U.S. market and make our mark,” recalls Tim Rosenzweig, CEO of Goldwind USA. “It was summer 2010, and we needed to demonstrate that we were going to be players in this market.”

However, in order to prove the technology was viable, the company had to overcome some obstacles.

Goldwind currently has more than 14 GW of PMDD technology installed globally. However, at the time the company became involved in the Shady Oaks project, its only turbines in the U.S. were three 1.5 MW PMDD machines operating in Pipestone, Minn. And because Goldwind had no long-term proof of operating performance in the U.S., the company knew bankers and lenders would be hesitant to finance wind projects. Therefore, the successful completion of a high-profile project like Shady Oaks would go a long way toward erasing doubt about the ability of Goldwind’s technology to operate in the U.S.

Goldwind currently has more than 14 GW of PMDD technology installed globally. However, at the time the company became involved in the Shady Oaks project, its only turbines in the U.S. were three 1.5 MW PMDD machines operating in Pipestone, Minn. And because Goldwind had no long-term proof of operating performance in the U.S., the company knew bankers and lenders would be hesitant to finance wind projects. Therefore, the successful completion of a high-profile project like Shady Oaks would go a long way toward erasing doubt about the ability of Goldwind’s technology to operate in the U.S.

Goldwind says DNV KEMA Energy & Sustainability is currently validating its fleet performance, and the company expects to have 100 equivalent wind turbine years of operational experience stamped and validated above 95% by the third quarter.

The Shady Oaks wind farm – which comprises 68 1.5 MW PMDD turbines featuring 82-meter rotors and three 2.5 MW machines with 100-meter rotors – provided an opportunity for Goldwind to showcase so-called Chinese technology, although Rosenzweig is quick to point out that the nacelles and generators are licensed from German provider Vensys.

The Shady Oaks wind farm – which comprises 68 1.5 MW PMDD turbines featuring 82-meter rotors and three 2.5 MW machines with 100-meter rotors – provided an opportunity for Goldwind to showcase so-called Chinese technology, although Rosenzweig is quick to point out that the nacelles and generators are licensed from German provider Vensys.

Project construction

In constructing its first true utility-scale wind farm in the U.S., Goldwind learned some lessons in building U.S.-style renewable energy projects. Goldwind’s parent company has a “blueprint” for installing the turbines; however, Rosenzweig credits Minneapolis-based construction services provider Mortenson Construction with “refining” Goldwind’s construction approach.

“[Mortenson] was super-efficient with the time spent with the main crane,” Rosenzweig explains. From the on-site staging to the delivery of components to strategically “walking” the crane between pad locations, “everything was completely optimized around the main crane,” he adds.

Rosenzweig also credits Chicago-based engineering services provider Sargent & Lundy and Libertyville, Ill.-based Aldridge Electric for keeping construction on track and on budget.

Goldwind’s decision to include three 2.5 MW turbines was based not only on the machines’ output, but also on the marketing value they would bring to the company. Because the Shady Oaks wind farm is located within a 90-minute drive from Chicago’s O’Hare Airport, Goldwind could more readily show potential customers its PMDD turbines up close than if the turbines were located in a more remote location.

Market adoption represents one of Goldwind’s biggest challenges. However, the company’s relationships with Chinese financial institutions, such as China Development Bank, make it possible for Goldwind to aid in providing financing alternatives for developers. For example, Goldwind can help provide longer-term debt at market rates for North American developers than would otherwise be available from traditional lenders.

“We can provide preferred equity on a variety of terms that are accretive to our customers and strike the right balance,” Rosenzweig says.

Goldwind hopes to replicate the formula used on Shady Oaks to build out its North American fleet. For instance, the company recently acquired the 20 MW Musselshell wind farm, located in Shawmut, Mont., from Volkswind USA.

Last December, Goldwind sold the Shady Oaks project to Algonquin Power Co., the non-regulated power generation subsidiary of Algonquin Power & Utilities Corp., for $148.9 million, including the assumption of long-term debt.

Goldwind received a $56 million cash grant from the U.S. Department of the Treasury, which enabled the company to procure components and services from local suppliers for the Shady Oaks project. Some of the components sourced from Midwest suppliers include blades manufactured by LM Wind Power in North Dakota and towers produced by Broadwind Energy in Wisconsin.

“The sale of Shady Oaks demonstrates our ability to compete in a ferociously competitive wind market,” Rosenzweig says. “The deal affirms that Goldwind will continue to make significant strides in the Americas in 2013 and beyond.”

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