Enel Green Power North America, Inc. has started building the largest wind farm in its global renewables portfolio to date.
The US subsidiary of the Italian gas and electricity distributor Enel began work on the 450MW farm called High Lonesome, in Upton and Crockett Counties, Texas, with project investment reaching approximately 600 million US dollars.
High Lonesome forms part of the investment outlined in Enel’s 2019-2021 strategic plan and is currently financed through the group’s own resources, which is expected be operational by the end of this year.
It is expected the wind farm, once fully operational, will be able to generate around 1.7 TWh annually, while avoiding the emission of over 1.1 million tons of CO2 per year.
Enel Green Power North America is a leading owner and operator of renewable energy plants in North America with projects operating and under development in 24 US states and two Canadian provinces.
The company, currently the largest wind operator in Kansas and Oklahoma, operates approximately 100 plants with a managed capacity of around 5GW powered by renewable hydropower, wind, geothermal and solar energy. In Texas, Enel currently operates the 63MW Snyder wind farm, located in Scurry County.
Antonio Cammisecra, head of Enel Green Power, said: “The start of construction of our largest wind project to date represents a major commitment to growing our business in the US and specifically in Texas.
“The project underscores our ability to work with partners to tailor energy solutions to fit their needs and continue to manage and deliver to our customers the complex deals necessary in today’s evolving energy market. We look forward to continuing to serve as the partner of choice, dedicated to delivering a sustainable energy future.”
The energy generated by a 295 MW portion of the wind farm will be hedged through a Proxy Revenue Swap (“PRS”), a risk management strategy aimed at minimising price and weather-related risks.
Enel entered into the PRS with insurer Allianz Global Corporate & Specialty, Inc.’s Alternative Risk Transfer unit (Allianz), and Nephila Climate, a provider of weather and climate risk management products. The financial derivative agreement is designed to produce stable revenues for the project regardless of power price fluctuations and weather-driven intermittency.
As a result, High Lonesome will receive fixed payments based on the expected value of future energy production, with adjustments paid depending on how the realised proxy revenue of the project differs from the fixed payment.
Karsten Berlage, managing director at Allianz Risk Transfer, said: “The construction of High Lonesome is a strong testament to the popularity and success of innovative renewable energy protections.
“The majority of today’s stakeholders champion the continued growth of renewables and that is why Allianz is committed to flexible strategies such as the PRS that mitigate those risks – long term.”
Lee Taylor, co-founder and CEO, REsurety, said: “Renewable energy projects are under increasing pressure to deliver predictable returns despite the increasing volatility of the value of intermittent generation.
“We developed the Proxy Revenue Swap specifically to deliver unrivalled certainty of cash flows, regardless of power price volatility and weather-driven intermittency. We are delighted to have had the opportunity to collaborate with Enel, Allianz and Nephila to bring the largest PRS transaction to fruition.”
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