Canada-based Enbridge Inc. has announced a deal to buy an 80% interest in two U.S. wind farms from Germany-based utility company E.ON.
The portfolio includes the 203 MW Magic Valley 1 wind farm, located near Harligen, Texas, and the 202 MW Wildcat 1 wind farm, located near Elwood, Ind. Both projects are operational and came into service in 2012.
‘This strategic investment provides a significant contribution to our growth targets in power generation,’ says Vern Yu, Enbridge's senior vice president of corporate development. ‘The transaction extends our renewable platform in the U.S., complementing our existing wind farm presence in Texas and establishing Enbridge in the Indiana renewable market."
Enbridge says it has invested approximately $3 billion in renewable energy assets over the past five years. Upon closing, the acquisition of these two wind farms will bring Enbridge's total net generating capacity of green power projects to more than 1.6 GW and help position the company to double existing capacity by 2018.
Under the terms of the agreement, E.ON will retain a 20% interest and remain the operator of the two U.S. wind farms. The company, which says the deal is consistent with its "build and sell" strategic approach, currently operates more than 2.7 GW of renewable capacity in the U.S.
Completion of the transaction is subject to regulatory approvals.
In other E.ON news, the company has announced plans to shift its focus solely on renewables, distribution networks and customer solutions. In its new setup, the company says it will place a particular emphasis on expanding its wind business in Europe and in "other selected target markets." It will also strengthen its solar business.
Meanwhile, E.ON is aiming to create a new, publicly listed company – a majority of which will be spun off to E.ON SE shareholders – that is focused on conventional power generation, global energy trading, and exploration and production.
"We are convinced that it's necessary to respond to dramatically altered global energy markets, technical innovation and more diverse customer expectations with a bold new beginning," says E.ON SE CEO Johannes Teyssen. "E.ON's existing broad business model can no longer properly address these new challenges. Therefore, we want to set up our business significantly different.
"E.ON will tap the growth potential created by the transformation of the energy world. Alongside it we're going to create a solid, independent company that will safeguard security of supply for the transformation. These two missions are so fundamentally different that two separate, distinctly focused companies offer the best prospects for the future."
Going forward, E.ON says it will work to take the necessary steps for the new company's public listing, and the utility expects to carry out the spin-off following a shareholders meeting in 2016.