Enel Green Power North America Inc. has started construction of the approximately 450 MW High Lonesome wind farm in Texas.
Located in Upton and Crockett counties, the project will be the largest wind farm in Enel’s global renewables portfolio.
“The start of construction of our largest wind project to date represents a major commitment to growing our business in the U.S. and specifically in Texas,” says Antonio Cammisecra, head of Enel Green Power.
The energy generated by a 295 MW portion of the wind farm will be hedged through a proxy revenue swap (PRS) with insurer Allianz Global Corporate & Specialty Inc.’s alternative risk transfer unit and Nephila Climate, a provider of weather and climate risk management products. The PRS is a financial derivative agreement designed to produce stable revenues for the project regardless of power price fluctuations and weather-driven intermittency.
Under this agreement, High Lonesome will receive fixed payments based on the expected value of future energy production, with adjustments paid depending on how the realized proxy revenue of the project differs from the fixed payment. The PRS for High Lonesome was executed in collaboration with REsurety Inc.
“Renewable energy projects are under increasing pressure to deliver predictable returns despite the increasing volatility of the value of intermittent generation,” notes Lee Taylor, co-founder and CEO of REsurety.
Investment in the construction of High Lonesome amounts to $600 million. The project, currently financed through Enel’s own resources, is expected to enter into operations by the end of 2019. Once fully operational, the wind farm will be able to generate around 1.7 TWh annually.
In Texas, Enel currently operates the 63 MW Snyder wind farm, located in Scurry County.