ALLETE, Inc.’s (ALE - Free Report) unit Minnesota Power has completed operational and commissioning process of the Bison 2 and 3 projects of its Bison Wind Energy Center. This new renewable installation has a total capacity of 210-megawatt (“MW”). These plants are located near New Salem, North Dakota.
These projects include Siemens AG -made 70 wind turbine generators, which are installed on the top of the 265-foot towers based in south-central North Dakota. Each of the turbines has generation-capability of 3MW of electricity by way of direct-drive.
In August 2005, the U.S Environmental Protection Agency (“EPA”) circulated a regulation that each of the federal agencies will consume renewable energy in amounts of not less than 7.5% in 2013 and afterwards.
To meet the environmental legislations, most of the utility providers including Minnesota Power invest substantial amounts for developing and upgrading their renewable emission-free utility assets.
Minnesota Power has started its Bison project, a renewable energy venture, in 2010. This project is connected with Minnesota by a 465-mile direct current (“DC”) transmission line. Prior to Bison 2 and 3 projects, the company has completed its 82MW Bison 1 project with 15 wind turbines in February 2012.
Globally, demand for renewable energy is rising primarily due to its clean nature and growing awareness regarding its benefits. This factor influences the utility providers to shift their mode of power generation to wind, solar and water from coal, oil and natural gas.
With the installation of Bison 2 and 3 projects, share of renewable generation in ALLETE’s total electricity portfolio will increase to 20%. This will subsequently enable the company to meet the state’s renewable energy goals.
The production of electricity from renewable sources is costlier than the traditional resources. The renewable energy production tax credit (“PTC”) on wind generation will help ALLETE to recover a portion of its production costs. However, this government incentive is going to expire by the end of this year.
Minnesota-based ALLETE, Inc. is a multi-service provider and has operations in Florida, North Dakota and Wisconsin. It has a wide array of businesses; starting from supply of electricity and water utility to automobile auction. With a market capitalization of $1.55 billion, the company has 1,315 full-time employees. ALLETE, Inc. currently has a short-term Zacks #3 Rank (Hold rating).