Pattern Energy outlines pipeline of projects it has the rights to buy

Pattern Energy Group Inc. (NASDAQ: PEGI) (TSX: PEG) reported in its Nov. 7 earnings report for the 2016 third quarter that it has a big pipeline of wind and solar projects that it has or will obtain.

Said Mike Garland, President and CEO of Pattern Energy: “We successfully accessed the public capital markets during the quarter, raising approximately $286 million in growth capital to fund accretive new dropdowns. With that funding we have already acquired a 90 MW owned capacity in Armow from Pattern Development at a 9.5x to 10.5x average cash available for distribution multiple over five years. With the addition of Broadview, which we expect will commence commercial operations late first quarter or early second quarter of 2017, our portfolio now totals 2,644 MW in owned interest. We also have clear visibility to 36% growth in total portfolio capacity from our identified ROFO list with Pattern Development. We have sufficient available liquidity to make additional dropdowns and we expect to grow the identified ROFO in the coming months as part of our plan to expand the portfolio to our target of 5 GW of owned capacity by the end of 2019.”

In October 2016, Pattern Energy acquired 90 MW of owned capacity in the 179 MW Armow project from Pattern Energy Group LP (Pattern Development) for approximately $133 million. Located in Kincardine, Ontario, Armow consists of 91 Siemens 2.3 MW wind turbines and is jointly owned by Pattern Energy and Samsung Renewable Energy Inc. The facility reached commercial operation in December 2015 and operates under a 20-year power purchase agreement with the Independent Electricity System Operator (IESO) in Ontario.

The Broadview wind projects are located in New Mexico and are due for commercial operation in 2017. They are rated at a total of 324 MW, with 272 MW of that owned by Pattern Energy.

Pattern Energy has the Right of First Offer (ROFO) on a pipeline of acquisition opportunities from Pattern Development. The identified ROFO list stands at 962 MW of total owned capacity. This list of identified ROFO projects represents a portion of Pattern Development’s 5,900 MW pipeline of development projects, all of which are subject to Pattern Energy’s ROFO.

Since its IPO, Pattern Energy has purchased 1,194 MW, including one project it has agreed to acquire, from Pattern Development and in aggregate grown the identified ROFO list from 746 MW to a total of 2,156 MW. The current list of identified ROFO projects includes:

  • Meikle, wind, in construction, British Columbia, commercial in 2016, 180 MW total, 180 MW Pattern Development owned;
  • Belle River, wind, late stage development, Ontario, commercial in 2017, 100 MW total, 43 MW Pattern Development owned;
  • North Kent, wind, late stage development, Ontario, commercial in 2018, 100 MW total, 43 MW Pattern Development owned;
  • Grady, wind, late state development, New Mexico, commercial in 2019, 220 MW total, 176 MW Pattern Development owned;
  • Henvey Inlet, wind, late stage development, Ontario, commercial in 2018, 300 MW total, 150 MW Pattern Development owned; and
  • Mont Sainte-Marguerite, wind, late stage development, Quebec, commercial in 2017, 147 MW total, 147 MW Pattern Development owned.

Pattern Energy Group Inc. was organized in October 2012. It is an independent energy generation company focused on constructing, owning and operating energy projects with long-term energy sales contracts located in the United States, Canada and Chile. Pattern Development owns a 19% interest in the company. Pattern Development is a leading developer of renewable energy and transmission projects.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.