Wind Capital Group To Install About 150 MW, Start New Project
Dow Jones Financial Information Services : January 06 2010
Wind Capital Group plans to install 150 megawatts of its current wind project and start construction of a new one in 2010, as it switches to a model of owning projects as opposed to developing and selling them off, according to the company’s president.
“Our goal is to get on to an annual rate where we’re doing 200 MW a year and then 250 MW and then 300 MW per year, you’ll see us doing something in that neighborhood,” Tom Carnahan, president and chief executive of the NTR plc subsidiary, said in an interview with Clean Technology Insight.
The St. Louis, Mo.-based company has already developed 912 MW, of which it sold 762 MW to third parties. With the backing of its Dublin-based corporate parent, which invested $150 million in 2008, the developer can switch to ownership for all future projects, said Carnahan.
“We’ll be operating and owning at least 500 MW by 2012,” he said.
It is already constructing the 150 MW Lost Creek wind project in Missouri, for which the company raised $240 million in debt financing in October 2009. The company spent the better part of last year working on that financing, in tough circumstances.
“We restructured the deal seven or eight times,” said Rosheen McGuckian, group corporate development director of NTR, speaking at a recent conference organized by Macquarie Bank. She added that “the market is beginning to come through” and “tax equity investors are knocking on our door.”
Carnahan said there’s a second project that Wind Capital hopes to start building later this year, which would be operational in 2011.
“We are in active negotiation with several utilities on new projects,” said Carnahan, with power-purchase agreements expected soon.
Meanwhile, in 2009 it didn’t build any wind projects. It did spend the year raising financing and hiring new people. It hired three executives formerly with Babcock & Brown, as well as one who worked previously for FPL Energy, now called NextEra Energy.
One of the ways in which Wind Capital Group has been able to weather the recession is that it bought 150 General Electric Co. turbines in 2008. The developer is using 100 of those for the Lost Creek project.
“We had the turbines we needed and no more,” said Carnahan. “We were not long on turbines. That’s what really hurt folks,” he said speaking of some other wind developers. In 2007 and early 2008 wind turbines were expensive and hard to get, requiring 24-month lead times.
Securing long-term turbine supply “that’s what you were supposed to do in ‘08,” said Carnahan. “Having a strong turbine position was a show of dominance and strength and a calling card in the industry.”
The turbine market has changed dramatically as projects couldn’t get financing in the banking crisis that hit hard in September 2008. “You don’t have to think quite as long term,” said Carnahan.
“In the early part of 2010 you’ll see rapid delivery, but my understanding is that in the late part of 2010, it would be more challenging.”
While the turbine market softened, “we are seeing it appears to be picking up in the later part of 2010,” said Carnahan.
Projects are being rushed for completion to qualify for special Treasury grants that require construction to start by the end of 2010.