Sumitomo Corp. of America (SCOA) has taken a 50% stake in two large-scale wind farms Duke Energy Renewables is building in Kansas. SCOA is buying stakes in the 131-MW Cimarron II project in Gray County and the 168-MW Ironwood project in Ford County. Duke Energy Renewables, a unit of Duke Energy (NYSE: DUK), and SCOA will complete construction of both wind farms later this year. Duke Energy Renewables will operate and maintain Cimarron II and Ironwood once they are in service, with SCOA involved in management of the projects. “Forging this new strategic partnership with Sumitomo – a strong global company – helps Duke Energy Renewables manage its capital deployment effectively and fuel continued growth in its wind and solar power businesses,” said Duke Energy Renewables President Greg Wolf. This may not be the only collaboration for Sumitomo, according to a spokesperson. The company is looking to take a more active role in renewable energy projects as both a developer and project manager.
The deal is expected to close in April. In addition, the companies are exploring opportunities to finance the cost of constructing and operating the Cimarron II and Ironwood wind projects. Both projects have long-term contracts in place to sell the electricity they generate. Kansas City Power & Light will purchase all of the electricity and associated renewable energy credits (RECs) produced by Cimarron II under the terms of a 20-year agreement. Westar Energy will buy all the power and RECs produced by the Ironwood wind farm through a 20-year agreement. Since 2007 Duke Energy has invested more than $2.5bn in its wind business, with approximately 1,000 MW in operation. It is currently developing five wind projects in the Midwest, all with expected completion dates this year. The projects would qualify under the expiring production tax credit.