ALLETE Clean Energy, a wholly owned subsidiary of ALLETE, announced a power sales agreement with Smithfield Foods, Inc. for the remaining output of the Diamond Spring wind site ALLETE Clean Energy will build, own and operate in Oklahoma.
The Smithfield agreement follows an earlier announcement of power sale agreements with two large Fortune 500 companies: Walmart and Starbucks.
- Walmart has agreed to purchase 175 MW for 15 years
- Smithfield will purchase 75 MW for 12 years
- Starbucks will purchase 50 MW for 15 year
“ALLETE Clean Energy is proud to help these leading companies meet their greenhouse gas reduction and renewable energy goals through the carbon-free energy that will be generated at Diamond Spring,” said ALLETE Clean Energy President Allan S. Rudeck Jr. “In addition to adding renewable energy to meet sustainability goals, these companies also seek to lower their energy costs.”
The approximately 300-MW Diamond Spring site, which is ALLETE Clean Energy’s first project to sell wind power to corporate customers, is now fully contracted with the Smithfield agreement.
Diamond Spring will be ALLETE Clean Energy’s largest wind site when operations begin in 2020. ALLETE Clean Energy will begin construction late this year or in early 2020. Diamond Spring will produce enough power for 114,000 homes, and increase the company’s total wind capacity to more than 1,000 MW at nine sites in seven states.
ALLETE Clean Energy purchased a 100% interest in the Diamond Spring wind site from the project’s developer, Apex Clean Energy. The purchase included negotiated power sales agreements with Walmart, Starbucks, and Smithfield.
Corporate and industrial customers represent a growing market for independent power producers as companies embrace sustainability goals.
Smithfield, a $15 billion global food company and the world’s largest hog producer and pork processor, announced a goal in 2016 to reduce greenhouse gas (GHG) emissions 25% by 2025. To help reach that goal, the company created Smithfield Renewables, a platform that unifies and accelerates the company’s carbon reduction and renewable energy efforts.
“This partnership to source renewable energy is part of our multifaceted and comprehensive approach to reduce our carbon footprint,” said Kraig Westerbeek, senior director of Smithfield Renewables and hog production environmental affairs at Smithfield. “The carbon-free energy generated through the Diamond Spring project is projected to account for more than 15% of our total energy usage across the United States, allowing us to power a substantial portion of our operations using sustainable energy.”
Walmart has committed to cover 50% of its energy needs with renewable sources by 2025 as it works toward an ultimate goal of operating with 100% renewable energy.
“Walmart aspires to be supplied by 100% renewable energy, and sourcing from wind energy projects — like the Diamond Spring wind facility — is a core component in the mix,” said Mark Vanderhelm, Vice President of Energy for Walmart Inc. “The energy we’ll procure from this facility represents an important leap forward on our renewable energy journey and reinforces Walmart’s broader mission to spark collective action — alongside key partners — to drive environmental sustainability.”
“When Diamond Spring comes online in 2020, it will serve three new corporate customers and deliver meaningful earnings growth for ALLETE shareholders,” added ALLETE Chairman and CEO Alan R. Hodnik. “ALLETE Clean Energy continues to help achieve ALLETE’s shared purpose to answer the call to transform the nation’s energy landscape.”
ALLETE Clean Energy’s strategic purchase of wind turbines that qualify for the safe harbor provision of federal production tax credits enables Diamond Spring’s low energy costs. In addition to turbines to be installed at Diamond Spring, ALLETE Clean Energy retains more safe harbor turbines for additional wind site development.