EDF Renewables North America is building a 247 megawatt (MW), $370 million wind farm under a build and transfer agreement with Tucson Electric Power (TEP).

The generating capacity will help the utility more than double its use of renewable energy by 2021.

The Oso Grande Wind Project is being built in southeastern New Mexico at a cost of around $1,500 a kilowatt. When combined with other existing and planned wind and solar projects, TEP said that Oso Grande will give it enough generating capacity to power more than two-thirds of Tucson, Arizona, homes.

When the project is complete, TEP’s renewable energy production is expected to exceed 28% of its retail sales. That would more than double the state requirement for 2021.

The project was selected through a competitive bid process and will qualify for federal tax credits that are expected to recoup more than two thirds of its cost over its first 10 years of operation.

The American Wind Energy Association said that New Mexico added wind capacity at a faster rate than any other state in 2017. The state added 571 MW in 2017, a 51% increase over 2016 capacity. New Mexico now has 1,732 MW of wind online, with a total capital investment of $2.9 billion.

New Mexico passed a renewable portfolio standard (RPS) in 2007, requiring utilities to generate 20% of their 2020 sales from renewable resources. The RPS contains a wind carve-out that requires wind to meet at least 30% of the total requirement.

The Oso Grande project will include 61 turbines on 24,000 acres southeast of Roswell, New Mexico. The system’s output will be delivered to Tucson through existing transmission lines that connect to TEP’s transmission system in eastern Arizona. Construction is expected to begin later this year, and the system should be online by the end of 2020.

Oso Grande will become TEP’s single largest dedicated renewable energy resource. The company’s largest system currently is the 71 MW Red Horse wind and solar system near Willcox, Arizona.

TEP’s renewable energy portfolio currently includes 277 MW of community-scale solar resources and 80 MW of wind systems, along with 232 MW of rooftop solar arrays installed by customers. Those resources produced energy equivalent to about 13% of TEP’s retail sales in 2018.

Over the next two years, TEP’s energy resources will be boosted by the Oso Grande wind farm and two other large projects expected to come online in 2020:

  • The 99 MW Borderlands Wind Project in western New Mexico. This project is being developed through a power purchase agreement with Borderlands Wind LLC, a subsidiary of NextEra Energy.
  • The Wilmot Energy Center in southeast Tucson, which will include a 100 MW solar array and a 30 MW battery storage system being developed through a PPA with NextEra Energy.