An innovative force in the US’ energy infrastructure, Black Hills Energy provides resilience where it matters most
From its origins in the rugged mining town of Deadwood, South Dakota, Black Hills Energy has transformed from a small, locally-focused operation into a leading name in the US energy sector. Initially established in 1883 to support gold mining and early development in the Black Hills region, the business quickly became one of the area’s first providers of electricity, thus laying the foundations for a century-long legacy characterized by innovation, exceptional service, and strategic expansion.
Today, Black Hills Energy operates as a vertically integrated, investor-owned utility powerhouse under its parent company, Black Hills Corp. Presently, the company delivers natural gas and electricity resources to 1.35 million customers across eight states – Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming – and its extensive infrastructure boasts around 9,000 miles of electricity lines and 47,000 miles of natural gas pipelines.
Central to Black Hills Energy’s operational excellence is a longstanding commitment to safety and reliability, especially during the challenging winter months. In alignment with this ethos, the company is constantly investing in and strengthening its systems and facilities. This ensures that both its residential and commercial customers receive the power they need, while supporting the evolving energy infrastructure of the areas it serves. One major ongoing development – a $320 million investment – is Black Hills Energy’s Lange II project. This project has been initiated to build upon the organization’s existing Lange I development. It will see the construction and commissioning of a new 99 megawatt generating station designed to provide greater grid reliability to customers in South Dakota and eastern Wyoming.
Modeling future needs
With the facility expected to be in commission by the end of the year, Energy, Oil & Gas is thrilled to join Derek Silbaugh, Black Hills Energy’s Director of Generation Engineering, to take a deeper dive into the strategic motives and core technologies powering the Lange II project. Derek begins our conversation by explaining how Lange II aligns with the company’s wider generation portfolio and regional planning strategy.
“We operate under an integrated resource plan that models future generation needs for our customers in western South Dakota and eastern Wyoming,” he details. “From that plan, we identified some older engines and combustion turbines that were built in the 1960s-70s that original manufacturers just don’t support anymore. That’s where the motivation for Lange II came from – to replace those black start turbines (BSUs) with more resilient units.
“Because of this, with Lange II we were looking at new opportunities there for generation resources, and we really wanted to have something with dual-fuel capability to replace these BSUs,” Derek continues. “From that, we landed on RICE (Reciprocating Internal Combustion Engine) units and, after vetting several different RICE manufacturers, we selected Wärtsila – specifically their 50DF engines. We wanted a large resource that could provide near-100 megawatts in order to complement the retirement of the older generation resources and to offer resiliency during the winter months, with the capability of these engines to run off both diesel and natural gas. They’re also some of the largest shaft generating RICE units in the world.”
With the final Lange II development set to incorporate six dual-fuel units upon completion, it was paramount that the project team identified the right model to thrive under the area’s specific conditions and support its increasingly dynamic energy grid, and Derek affirms that Wärtsila’s RICE units were the perfect fit.
“One great thing about Wärtsila’s RICE units is that they are highly responsive; you can generate a full load – 99.6 megawatts – in less than five minutes from a cold start. If the units are online and running at a minimum load, they can resume to a full load in less than 60 seconds. These units are also really beneficial in today’s market where there’s more renewables on the grid as they allow us to keep the grid stable and resilient when renewable energy might be unreliable (due to changes in sunlight levels, wind, etc.),” Derek explains. “The other key benefit of the RICE engines is that they consume low amounts of water – just about a half-gallon per hour per megawatt (that’s less than one gpm with all six units running full load). In fact, this water usage comes from a closed loop cooling system; the only other major use of water is in the turbos to keep them clean. With these turbos, the RICE engines can also accommodate higher elevations; we’re operating at around 3,400 feet in elevation where a lot of other combustion turbines will be de-rated.”
Assessing the market
Building on these performance and efficiency advantages, the RICE units’ dual-fuel capabilities also offer great operational flexibility and resilience in the face of fuel supply uncertainties. Beyond rapid response and low resource consumption, their design allows operators to adapt to changing conditions on both the grid and the fuel market, ensuring continuity of service even during disruptions.
“As we were developing the site, we began analyzing how much fuel we should store on site for resilience in a major storm or outage,” Derek elaborates. “During Storm Uri, Texas experienced a four-day period where they had issues with natural gas availability, so we piggybacked on that analysis and decided that it would be beneficial to have four days of fuel storage on site in the event that we didn’t have sufficient natural gas. The design includes 600,000 gallons of diesel stored in tanks, which means that we could run these units on diesel for four days should natural gas become unavailable. It also means that we can assess market availability as diesel prices fluctuate to keep our customers’ costs as low as possible.”
With planning and design considerations firmly in place, Black Hills Energy officially broke ground on Lange II in August 2025. Derek provides some insight into the project’s timeline and key milestones. “As this is a high capital project for the area, we made sure to use local contractors where possible, which was beneficial in keeping a those capital investments within the community during site development. In September 2025, our general contractor for the project, MasTec, arrived on site and started preparing the underground utilities to get the system set up. We were lucky in that we had a favorable construction season last winter, so we were able to complete a lot of the activities then.
“Right now, we’re at the point of starting to erect the engine hall,” he reveals. “There’s been a lot of investment placed into that building to keep the temperature conditions and acoustics controlled, because the engines are very loud. We expect the engine hall to be completed by the end of June so that we will be commissioning Q3 2026 and commercial operation by Q4 of 2026.”
As the Lange II project moves steadily along, it stands as a testament to forward-thinking innovation, balancing reliability, flexibility, economical energy, and community investment in equal measure. By combining proven technology with strategic planning, Black Hills Energy is actively reinforcing the resilience of its network for many more decades to come. In an increasingly complex energy landscape, Lange II shows that the company remains firmly focused on delivering customer value with dependable power – no matter the conditions.
