Algonquin Power & Utilities Corp.’s renewable power generation subsidiary has acquired a controlling interest in the 50-MW Sandy Ridge Project, in Pennsylvania from Gamesa.
This is the first of four wind projects in a 480-MW portfolio that is under construction by Gamesa. The first part of the acquisition was to include an interest in both Sandy Ridge and the 80-MW Pocahontas Prairie project in Iowa. Algonquin Power Co. (APCo) said it is delaying the Iowa deal to keep within its strategy of acquiring projects with long-term power purchase agreements (PPA).
Sandy Ridge achieved commercial operation in February 2012, is comprised of 25 Gamesa G9X-2.0 MW wind turbines. It has a 10-year PPA with J.P. Morgan Ventures Energy Corp. Total expected energy production from the facility is approximately 158.3 GWh per year. Sandy Ridge has entered into a 20-year contract with Gamesa to provide operations, warranty and maintenance services for the wind turbines and balance of plant facilities.
The Sandy Ridge interest was acquired for $29.7 m. The interest in Sandy Ridge is being acquired through a partnership whose members include APCo’s subsidiary (holding a 51% controlling interest) and Gamesa (holding a 49% interest).
Algonquin expects to close its interest in two other projects in the fourth quarter of this year, following the completion of construction. The 200-MW Minonk project in Illinois and the 150-MW Senate project in Texas are being built by Gamesa. If a power contract for the Pocahontas Project is not secured, APCo would not acquire an interest in that project but would increase its stake in the three remaining projects of Sandy Hill, Minonk and Senate. The overall investment would still total about $270 mn.
“We are very pleased to be bringing the first of these contracted wind power projects into APCo’s renewable power portfolio and entering the U.S. wind energy generation market with such a high quality asset,” said APUC CEO Ian Robertson,. “We are confident that this acquisition is in keeping with our commitment to a strategy of creating shareholder value through expansion and acquisition of long term stable assets in line with the risk-return expectations of our shareholders.”