Dive Brief:

Xcel Energy yesterday announced plans to build and own a new 300 MW wind farm in South Dakota that the utility says illustrates the economic viability of wind power even as federal tax credits are phased out.

According to Xcel, the Dakota Range I and II project is the first publicly announced wind project to advance under the phase down of federal tax credits.

To be developed by Apex Clean Energy, Xcel also said the proposal puts it on pace to be the first utility in the United States to exceed 10,000 MW of wind on its system.

Dive Insight:

Wind projects that begin construction this year will get 80% of the federal production tax credit, with the incentive declining until it is phased out in 2020. But Xcel says its project is viable even without the full credit, and highlights how wind energy is becoming more competitive.

“This is a milestone for our industry and our customers,” said Xcel Chairman and CEO Ben Fowke. “Wind provides the clean, competitively priced energy our customers want. This project proves we can keep driving the clean energy transition of our supply mix while keeping customer bills low, even as incentives phase out.”

In addition, the project will provide new local jobs and long-term revenue for Grant and Codington counties, S.D., the company said.

The Dakota Range project will use Vestas turbines and is expected to be operational in 2021. This increases Xcel Energy’s current wind proposals nationwide to 3,680 MW at 13 wind farms in seven states, the utility said.

Congress struck a deal in 2015 to extend the wind production tax credit through 2020, with a gradual decline beginning this year. The U.S. Internal Revenue Service in April increased the credit for wind power sold this year, to $0.024/kWh, up slightly from $0.023/kWh, to account for inflation.