When Shepherds Flat, the massive new wind farm being built by Caithness Energy in Oregon, is completed in 2012, its total capacity will be larger than any other wind farm currently in operation around the globe. GE is not only supplying the wind turbines in a $1.4 billion contract that was announced today, but the technology will be GE’s most advanced — its giant 2.5xl machines that will be making their North American debut. In the clip below, Steve Bolze, president and CEO of GE Power & Water, explains the deal.

Stretching across 30 square miles in north-central Oregon, near the town of Arlington, the 845-megawatt project, which has received the majority of the necessary government permits to operate and is ready to be built, will have a total of 338 turbines installed in 2011 and 2012. When it’s operational, it will be able to power approximately 235,000 average California households and will avoid more than 1.5 million tons a year in greenhouse gas emissions, compared to equivalent fossil fuel power generation.

The order by Caithness is the largest single global order of the turbines, which have already been proven in Europe and Asia. The machines heading for Oregon will be assembled at GE’s site in Pensacola, Florida, and as Steve noted: “Our capability to build these machines here in the United States and provide local resources and expertise were key factors in winning the contract.” In addition to supplying the wind turbines, GE will provide ten years of operational and maintenance services.

Caithness estimates that the $2 billion project will inject $16 million annually of direct economic benefits into Oregon, and will employ 400 workers during construction and 35 during operation. Construction will begin next year and will require 85 miles of roads and 90 miles of power connection lines to be built.

GE Energy Financial Services — with a portfolio of more than 40 wind farms with a total capacity to produce more than 6 Gigawatts of electricity — is investing in the project.

The builders say the development of the wind farm is made possible because of California’s renewables portfolio standard — which if adopted nationally in the form of a strong renewable electricity standard would propel the growth of renewable energy throughout the country.

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* Read the GE announcement
* Read “GE wins $1.4bn turbine contract” in The Financial Times