In Markbygden forest in the northern Sweden, the temperature drops to minus 10 degrees Celsius in the winter and bitter winds blow. That makes this area 60 miles south of the arctic circle uncomfortable for humans, but the sparsely populated region, where real reindeer roam, is perfect for a wind farm.
Engineers there are now building the roads and preparing the land to erect some of the world’s largest wind turbines. When the project is complete, 179 GE turbines, each twice the height of the Statue of Liberty, will rise approximately 140 meters above the forest, where they will catch the nearly ceaseless wind to generate 650 megawatts of electricity. When complete in 2019, it will be the largest operating wind farm in Europe, increasing Sweden’s installed wind generation by 12 percent, says Thomas Thomsen of GE Renewables.
GE machines already power Europe’s largest operational wind farm in Fântânele-Cogealac in Romania, which can generate 600 megawatts. Earlier this year, the company partnered with Spain’s Forestalia Group to supply wind turbines for a planned 1,200-megawatt wind farm near Aragon.
Most of the power produced at the Markbygden wind farm will be sold to an aluminum plant in Norway run by Norsk Hydro, one of the world’s biggest producers of the lightweight metal used to make soft-drink cans and airplane parts. Energy that the wind farm generates will help Norsk produce an estimated 100,000 tons of aluminum per year.
Norsk Hydro is getting the power from the Markbygden farm through the world’s largest power purchase agreement (PPA) involving wind. The unique deal, which GE negotiated along with its partner Green Investment Group (GIG), guarantees that Norsk Hydro will be able to buy power from the wind farm at a fixed price for 19 years. As part of the agreement, GE’s financing arm partnered with GIG and bought out the wind farm’s original developer, Svevind. Now, GE will provide the turbines and has guaranteed to deliver at least 1.65 terawatts of wind energy per year.
GE was able to structure this unique guarantee by bringing GE’s wind-turbine manufacturing division and representatives from the company’s financing division GE Energy Financial Services (GE EFS) to the negotiating table, says Steve Hunter, an executive from GE EFS who worked on the deal with Norsk Hydro. “It’s normally the investor in the project who negotiates the PPA,” Hunter says. But in this case, experts from GE Renewable Energy carried out a unique, in-depth analysis that allowed GE EFS, as project owner, to offer helpful guarantees to Norsk.
Thomsen and his team at GE Renewables did it by studying weather patterns around the Markbygden wind farm and correlated that with power price data to calculate the risks of promising constant energy based on what they knew about the turbines.
That included detailed knowledge of special devices developed by GE that, as Thomsen puts it, work like “big hair dryers” blowing warm air into the blades and allowing them to shed ice. Ice buildup changes the blade profile and weight, making the turbines less efficient. GE acquired the maker of the blades, LM Wind, last year.
The renewables team analyzed 960 different scenarios for the wind farm to determine that GE Capital could make the power delivery guarantee to Norsk Hydro — a guarantee that other operators might normally have deemed too risky.
“For them, knowing how much power they will be receiving in advance is a huge advantage,” Hunter says. “They have line of sight into this on an hourly basis.” Plus, a customer like Norsk Hydro “isn’t just talking to someone who is thinking about their investment, but a group that knows the details of how the turbines will be operated and maintained.” A guarantee like that can give a customer the confidence it needs to keep its operations running, no matter how cold it is.