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Engie, Walmart sign 'virtual power purchase agreement' for wind energy

In an unusual arrangement stretching across energy markets in the U.S. Southwest, ENGIE North America Inc. said it has signed two "virtual power purchase agreements" with Walmart Inc. for 366 MW from new wind projects.

Walmart will procure 166 MW from Engie's Prairie Hill Wind Project in McLennan County, Texas, along with 200 MW from the King Plains Wind Project in Noble County, Okla. Power provided under the virtual PPA "annually matches to portions of electricity load in Walmart stores, Sam's Clubs, and distribution centers throughout parts of the ERCOT and Southwest Power Pool markets," the companies said in a news release Oct. 22.

The deal to buy renewable energy from projects located in two separate wholesale markets — the Electric Reliability Council of Texas Inc. and Southwest Power Pool — in a single procurement makes the Engie-Walmart PPA unusual, the companies said. It also builds on a previous virtual PPA between the two companies in which Walmart will buy 150 MW from the Triple H Wind Project in Hyde County, S.D. A portion of the output from Triple H is also going to Boston University under a separate virtual PPA. The university plans to resell that power to users across the Midwest.

Prairie Hill, King Plains and Triple H are all planned at 250 MW and expected to come online in the 2020-2021 timeframe. Acquired in early 2018 by a subsidiary of ENGIE North America from Infinity Power Holdings, the three projects form part of France-headquartered parent company Engie SA's plan to add 2.5 GW of new renewable generation capacity in the U.S. by 2021. The company's worldwide renewable energy portfolio comprised 24 GW at the end of 2018.

Engie NA has also signed deals to supply Target Corp. with renewable energy.

Walmart has set a goal of powering one-half of its worldwide operations from renewable energy by the end of 2025. The company's renewable-energy program has encountered some speed bumps: In August, the retail giant said it was suing Tesla Energy Operations, Inc over a series of fires that erupted on the rooftops of several of its stores across the country, allegedly sparked by shoddy solar arrays installed by SolarCity Corp., which Tesla acquired in 2016. Between 2012 and 2018 the fires caused millions of dollars in damages, Walmart claimed.