Shell in early swoop for power from vast $5bn US wind farm that will help green California

Pattern Energy announced two initial long-term power offtake deals with Shell Energy North America and University of California for its planned $5bn, 3.5GW SunZia Wind project in the US state of New Mexico, the largest in the western hemisphere.

Pattern CEO Hunter Armistead called the developer’s new commercial relationships with Shell and UC Regents “exciting”. Shell Energy North America is a major wholesale energy supplier in the US and Canada, while UC Regents is the governing board of the state’s university system.

He noted that New Mexico’s wind generation has a “powerful generation profile with an evening peak that is a perfect complement to daytime solar.”

This creates a challenge for utilities as they need to quickly ramp up baseload fossil plants that are fewer in number each year amid public policy pressures to accelerate their retirement to help address climate change.

While California has more storage than any state, about 5GW, total capacity, the weighted-average 3-hour duration is insufficient to compensate for the late-day supply shortfall of solar.

Armistead said Pattern continues to have conversations with other potential off takers throughout the western region” for SunZia Wind, which he estimates can supply electricity for three million Americans.

The sprawling project will be located on both federal lands and private property across three counties in central New Mexico.

The upcoming supply deal will be an enormous boost for GE Renewable Energy, Siemens Gamesa, or Vestas, the OEMs with manufacturing facilities in the US.

The US onshore wind market has been in the doldrums since 2020 amid a raft of permitting, policy, regulatory and supply chain challenges. Installations last year were the lowest since 2018.

Activity is starting to improve in response to long-term tax incentives in the federal climate law that President Joe Biden signed in August 2022.