Italian energy firm Enel, through its US renewable subsidiary Enel Green Power North America, has commenced construction on 450MW High Lonesome wind farm in Upton and Crockett Counties, Texas, US.
Estimated to cost $600m, High Lonesome will be the largest wind farm in Enel’s global renewables portfolio and the electricity generated by a 295MW component of the plant will be hedged through a Proxy Revenue Swap (PRS) to minimise price and weather-related risks.
Enel Green Power head Antonio Cammisecra 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 $600m investment is part of the company’s investment outlined in Enel’s 2019-2021 strategic plan.
The project is currently financed through the group’s own resources and is expected to enter into operations by the end of 2019.
The wind farm will generate nearly 1.7TWh annually and avoid the emission of more than 1.1m tonnes of CO2 per year.
Enel has entered into a PRS with Allianz Global Corporate & Specialty’s Alternative Risk Transfer unit and Nephila Climate, which provides weather and climate risk management products.
PRS, a financial derivative agreement, is designed to produce stable revenues for the project irrespective of power price fluctuations and weather-driven intermittency, hedging shape risk in addition to risk associated to price and volume.
Under the terms of agreement, High Lonesome will receive fixed payments based on the expected value of future energy production, with adjustments paid depending on the difference between the realised proxy revenue of the project and the fixed payment.
The PRS for High Lonesome, the largest by capacity for a single plant globally and first of its kind for Enel, has been executed in collaboration with REsurety, a renewable energy risk management and information services company.
Enel currently operates the 63MW Snyder wind farm, which is located in Scurry County, Texas.
Image: Enel begins construction on 450MW wind farm in US. Photo: Courtesy of Karsten Würth on Unsplash.