Hydroelectric deal includes wind power storage provision

Minnesota Power and Manitoba Hydro signed a 15-year power purchase agreement that will introduce a way to “store” wind energy generated in North Dakota through hydroelectric reserves.

As part of the agreement, Manitoba Hydro will sell 250 MW of electricity to Minnesota Power, a unit of Allete (NYSE: ALE) for 15 years beginning in 2020.

The PPA includes a wind storage provision that entitles Minnesota Power to transmit energy north from its wind farms in North Dakota when production is high or electric loads are low. When Minnesota Power transmits power northward, Manitoba Hydro will absorb it into its system. The wind storage provision will allow Minnesota Power to balance its energy position and maximize the value of its wind resources.

The agreement provides for building additional transmission capacity between Manitoba and the U.S. It also gives Minnesota Power primary rights to new transmission with Maniotba Hydro. The utilities are also in discussions with the Midwest Independent System Operator (MISO) on various transmission configurations.

The two companies have worked together on projects since the 1970s. In 2006, the two utilities began discussing the next stage of hydroelectric development on the Nelson River in northern Manitoba.

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