Google and Citi invest further in California wind farm

23 Jun 2011

Google and Citi are to each invest US$102m to finance the second phase of the Alta Wind Energy Center (AWEC) wind farm development in Southern California’s Tehachapi Mountains. This is in addition to the US$55m that Google and Citi each initially invested in the project in May.

The AWEC wind-farm project, which is being developed by Terra-Gen Power, is expected to have a generating capacity of 1,550MW when complete to become the largest wind-energy project in the US.

The new investments from Citi and Google will finance the Alta V phase of the project, which is projected to generate 168MW of wind power. Last month’s investment of US$55m from both companies was for the Alta IV phase of the project.

Citi and Google will now hold leveraged leases for two phases, totalling 270MW. Citi has also underwritten the equity financing for Alta Projects II-V, totalling 570MW.

Gigawatt-scale wind project

Terra-Gen Power says the initial five Alta projects of the AWEC are complete and are generating 720MW of power, representing a 25pc increase in installed wind capacity for the State of California.

It anticipates that another 300MW will be constructed and online by the end of 2011, with AWEC then having a total capacity of 1,020MW.

Under a power purchase agreement signed in 2006, AWEC will supply all of its 1,550MW of wind energy capacity to Southern California Edison.

AWEC Turbine

A wind turbine in construction at Alta Wind Energy Center.
Image courtesy of the Google Green Blog

Google and Citi financing

The financing from Google and Citi has been structured as a leveraged lease, whereby the investors have committed to purchase the projects at the start of commercial operations and lease them back to Terra-Gen, which will continue to manage and operate the wind projects under long-term agreements.

“We’re excited to make this additional investment in the Alta Wind Energy Center because the project harnesses a proven local wind resource through a clean power transmission line, to help California meet its ambitious renewable energy goals while using an innovative financial structure that may attract more investment in renewable energy projects from new types of investors,” said Rick Needham, director of Green Business Operations at Google.

He said that with these two projects at Terra-Gen, this brings Google’s investment in clean energy to more than US$780m, with about US$700m invested by the internet giant in 2011 alone.

Back in April, for instance, Google invested US$100m in Shepherd’s Flat Wind Farm in Oregon.

Another clean energy investment from Google included US$168m for the BrightSource Ivanpah solar power tower in the Mojave Desert in California.

Google also invested €3.5m in a solar photovoltaic power plant in Germany in April.

US clean-energy economy

Michael Eckhart, managing director of Environmental Finance and Sustainability at Citi, said the AWEC project was a “national model” for the economic viability of large-scale renewable-energy projects.

“We hope it will encourage further investment in the space as we work to expand the clean-energy economy in the US,” he added.

Terra-Gen Power anticipates that, when completed, AWEC will increase wind industry jobs in California by 20pc, including more than 3,000 domestic manufacturing, construction, operation and maintenance jobs.

Photo: The Alta Wind Energy Center under construction

Carmel Doyle was a long-time reporter with Silicon Republic