Terra-Gen lands major funding, expects to complete America's largest wind farm next year
By Darren Murph 
posted July 26th 2010 9:46AM
posted July 26th 2010 9:46AM
And you thought that 1,000 megawatt wind farm planned for Lake Erie was going to be huge. Terra-Gen Power recently secured a staggering $1.2 billion in construction financing, which it fully intends to use on 3D projectors, PlayStation 3 consoles and parts necessary to build America's largest wind farm. Granted, only one of those points is actually true, but we suspect you're hanging with us. The latest round of cash will help build four wind power projects with a total of 570 megawatts of capacity at the company's Alta Wind Energy Center in Kern County, California. But when you put that with projects already in motion, you're left with a 3,000MW wind power initiative, which should be completed and operational "in the first and second quarters of 2011." So, anyone feeling up to topping this? Terra-Gen Power Announces Closing of $1.2 Billion Construction Financing and Wind Turbine Order to Launch Build-Out of the Nation's Largest Wind Farm
NEW YORK, NY – Terra-Gen Power, LLC ("Terra-Gen") announced today that it has closed a $1.2 billion financing for four wind power projects with a total of 570 megawatts (MW) of capacity at its Alta Wind Energy Center in Kern County, California. The four projects, known as Alta Projects II-V, will use 190 V90-3.0 MW turbines manufactured by Vestas-American Wind Technology, Inc. ("Vestas").
The Alta Wind Energy Center is a 3,000 MW wind power development initiative. Along with the 150 MW Alta Project I utilizing GE turbines, which closed financing and commenced construction in March 2010, this financing puts Terra-Gen well on its way to completing what is anticipated to be the largest wind energy farm in the nation.
The $1.2 billion financing for the Alta Projects II-V included the issuance of approximately $580 million of pass through certificates due 2035 via a Rule 144A offering, a construction bridge loan facility of $499 million and ancillary credit facilities of $127 million. Proceeds from the certificates and bridge loans will be used to fund construction of the projects.
Citi, Barclays Capital and Credit Suisse acted as joint book-running managers for the issuance of the pass through certificates, and Mitsubishi UFJ Securities, Credit Agricole Securities, ING, and Rabo Securities acted as co-managers. MUFG Power & Utilities Group, Credit Agricole, ING Capital, Rabobank, Citi, Barclays, and Bank of Montreal provided the credit facilities, with Credit Agricole acting as administrative agent and MUFG Power & Utilities Group, Credit Agricole, ING Capital, Rabobank, Citi, and Barclays acting as joint lead arrangers.
The permanent financing of Alta Projects II-V is structured as a leveraged lease whereby Citibank, N.A. has committed to purchase the projects at the start of commercial operations and lease them back to Terra-Gen. Terra-Gen will continue to manage and operate the wind projects under long-term agreements. "We believe this transaction is the first to be structured as a leveraged lease in the wind space as well as the first 144A bond issuance for wind assets since 2005. We are hopeful that these benchmarks will expand the capital base available to fund future growth in the renewables sector," said John O'Connor, CFO of Terra-Gen.
The Alta Wind Energy Center is expected ultimately to provide up to 3,000 MW of pollution-free electrical generating capacity, 1,550 MW of which will fulfill a power purchase agreement signed with Southern California Edison in 2006. With 720 MW of wind power, the initial five projects will increase the installed wind capacity in California by more than 25% and deliver enough clean, renewable energy to supply up to two hundred thousand homes.
"We are delighted to have closed this financing and to be working with Vestas and GE on the Alta projects. The project represents an important expansion of the renewable generating base of California and helps us advance our nation's goals of achieving energy independence in an environmentally responsible manner," said Jim Pagano, CEO of Terra-Gen. "The Alta projects I-V will create more than 1,500 domestic manufacturing, construction and operation and maintenance jobs, and inject more than $600 million into the local economy. We are grateful to Kern County, the State of California, the U.S. Congress, and the Treasury Department for their supportive renewable energy policies, without which ambitious projects like the Alta Wind Energy Center would simply not be possible."
Project construction is expected to begin immediately, with commercial operation anticipated in the first and second quarters of 2011. Delivery and commissioning of the Vestas turbines will begin in October 2010. Alta Project I is anticipated to begin commercial operations in January 2011.
Terra-Gen is an affiliate of ArcLight Capital Partners and Global Infrastructure Partners. With more than 830 megawatts of generating capacity in operation and 720 megawatts under construction, Terra-Gen Power is one of the nation's leading renewable energy providers and is the only American company that provides electricity on a utility scale from all three major renewable energy sources: wind, solar and geothermal power. Terra-Gen currently has 21 renewable energy projects in operation in six states, and more than 5,000 megawatts of renewable energy capacity under development.
ABOUT TERRA-GEN POWER:
Terra-Gen Power is a leading renewable energy company headquartered in New York City with offices in San Diego, Denver, and Reno. Its operating company subsidiary Terra-Gen Finance Company owns 831 MW (net) of renewable generating facilities across 21 projects, 19 of which are operated and managed by Terra-Gen. Terra Gen's development subsidiaries hold over 5,000 MW of wind, geothermal, and solar development projects, including the 3,000 MW Alta Wind Energy Center development project in Tehachapi, CA which is being developed by Terra-Gen's California Highwind Power subsidiary. More information about Terra-Gen can be found at http://www.terra-genpower.com.
ABOUT ARCLIGHT CAPITAL PARTNERS:
ArcLight is one of the world's leading energy investment firms with more than $6.8 billion under management. ArcLight's investment team has extensive energy investing experience, industry relationships, and asset level knowledge. ArcLight is one of the most experienced renewable power investors having made its initial investment in Terra-Gen Power's predecessor company in 2002. ArcLight is headquartered in Boston, Massachusetts with offices in New York City, London and Luxembourg. More information about ArcLight can be found at http://www.arclightcapital.com.
ABOUT GLOBAL INFRASTRUCTURE PARTNERS:
GIP is an independent infrastructure fund that invests worldwide in infrastructure assets and businesses in both OECD and selected emerging market countries. GIP has offices in New York and London with an affiliate in Sydney and portfolio business operations headquarters in Stamford, Connecticut. For more information, visit www.global-infra.com.
First!
@bingster
Alright everyone, downrank away.
@bingster: It's the "largest wind farm" not the "first" wind farm.
@bingster Idiot...
Good to see some alternative energy sources coming online sooner rather than later.
@Bhima
They could just be blowing hot air with their wind farms...
@tricheboars
[Morbo voice] WINDMILLS DO NOT WORK THAT WAY!!! [/Morbo voice]
$1.2b could have gone a decent way towards a modern nuclear reactor, which could've taken up much less area and killed far fewer birds while producing more reliable and plentiful power =)
@paul34 But would saddle future generations with nuclear waste. I'm not anti-nuclear, but there is a certain beauty to the renewable nature of wind farms.
@paul34
when will we finally build Thorium reactors? much safer, much smaller, and almost limitless energy potential (easier to find/extract, and much more plentiful than uranium)
@paul34 Wind farms turn too slowly to kill birds, But I do agree about the nuclear option, Wind farms cost too much and don't generate enough electricity.
@paul34
(Source: American Wind Energy Association) NextEra Energy Resources provides nearly 25 percent of the wind energy market (35,000 Megawatts).
41% Wind
37% Natural Gas
14% Nuclear
5% Oil
2% Hydro
1% Solar/Other
@RincewindWiz This way the future generations are saddled with a inefficient use of land and the cost of this unreliable technology.
Seriously wind is OK as it does have a return on investment, unlike solar, but the amount of land it takes up for the gain is marginal at best. I'm betting the Yuka storage facility for over 100 years of nuclear waste storage for the entire country is smaller that this one wind farm alone. And it's located int he middle of nowhere.
@RincewindWiz
I'd say that, currently, nuclear power is by far the best way to generate power, considering the cost/safety/environmental factors. Supposedly, the high-level nuclear waste produced for each person per year only amounts to a lump the size of an aspirin tablet.
http://www.lewrockwell.com/miller/miller13.html
Hopefully within the next 30-50 years we could develop cleaner, safer renewable sources of power, but for now nuclear seem to be the way to go.
@RincewindWiz
Get us* off fossil fuels and then we can devote our time and money into reusing nuclear waste or reducing it.
* Us as in the American government, people and corporations (greedy and not so greedy)
@Abe don't the thorium reactors use waste to run?
Anyone know how much this 3000MW is in relation to the total electricity by the US?
@wobbles 3.9 billion MW/H was the years average for 2008 for the US
@sevenVIIghosts
So its fook all then :-) Still better than nothing
@wobbles I don't know (off-hand) but check out a show called "Powering the Future" on the Science Channel. They give some really interesting information about the current and future energy demands that society is placing on the energy supply, and also address how many of each type of energy-solution (wind, solar, geothermal, nuclear, etc.) would be necessary to fill the demand.
Pretty cool show.
@wobbles It's not even 3000 MW, if you read the fine print, this farm will only put out 570 MW. Which is kind of pathetic for a billion dollars.
By way of comparison, Grand Coulee Dam puts out an average of 2300 MW, with a peak capacity of 6,800 MW. An average nuclear power plant puts out 1000 MW per reactor.
@wobbles
http://www.eia.doe.gov/aer/pdf/pages/sec1_9.pdf
has all the complete data.
99.304 quadrillion BTU (british thermal unit).
7.300 of that from renewable sources (yikes. That's less than 10% even WITH hydro power)
A quadrillion has 15 zeros, times 99.304 is
99,304,000,000,000,000 BTU
1,000,000 BtuIT = 1055.05585262 MJ ≈ 293.071 kWh
http://de.wikipedia.org/wiki/British_thermal_unit
Meaning you devide it by 1 million and you get how many million BTU you have and that times 293.071 is the kWh
= 29103122584000 kW/h = 29,103,122,584 MW/h
29 billion MW/h.
Yeah... uhm... right. 570 MW/h surely is... err... not that much.
Now you have to know that the number I gave or better linked to is the energy consumed by every way of using it. Fuel for cars, coal power plants, heating et cetera is all in there. Meaning not every MW/h that is given here is currently even transported on the power networks. It's more likely to reside in your gas tank and refineries as well as on coal trains. Meaning even if the US was to go "fully electric" it had to also built a whole new energy grid to even be able to transport all that energy.
This way or another, 570 or even 3000 MW/h seem miniscule compared to that number...
If my math is wrong please correct me. I didn't chose to publish the US energy consumption in BTUs. What a silly way to measure it. Energy is measured in Joule. But whatever :-)
@telstar
Saw that documentary, it was pretty good interesting and have some good points. More people should watch it, its educational :P
@TerroBash
You have a problem with your units - you reported energy in MW/h and KW/h (e.g. 29,103,122,584 MW/h) - you should have used MWH and KWH.
@TerroBash
Actually, you have other unit problems as well - the 570 and 3000 figures quoted are power measurements and should be in MW, not in MWH (nor in MW/h). Also, it doesn't really make sense to compare a power quantity (570 MW) with an energy quantity (29 billion MWH) - it is like comparing apples and oranges.
@nodrog
We can do a quick fix. 29 billion MWH is over a year. 570 MW means it produces 570 MWH every hour. So using the bad assumption that its always producing 570 MW, it will produce 570 MWH for a total of 24*365 hours in a year.
570*24*365 = 4,993,200 MWH
Or as a fraction of 29 billion MWH: .00017 or ~.02% of total US power generation. Put another way, we would need to build about 6000 of these to produce enough energy.
Hope this means my electricity bill will go down here in kern county.
@JedixJarf
Doubtful... if anything it'll just keep your bill from going up. Here in jersey pse&g is putting solar panels on almost every telephone pole. The general population thinks the bills will be coming down, when in reality its so they wont need to raise our rates to cover the cost of a new plant.
I saw some cool looking wind catcher thingy on discovery for backyards. It looked more like a blender instead of a propeller.
Solar power is probably the single WORST choice for energy of ANY.
First of all, current solar cells are considered "energy negative", meaning that a cell will rarely produce more energy in it's operating lifetime to exceed the amount of energy that went into it's production, installation and operation. Plus, unlike wind, nuclear, gas or coal, solar energy must be stored in batteries before it's electricity can be used to feed the electric grid. And to the post about storage of nuclear waste, the materials in solar cells and their batteries are as toxic and possibly even more than nuclear. Not only that, the many of the materials needed for solar cells result in mass strip mining to obtain.
At least with wind and natural gas, those concerns do not exist. As a matter of fact, many parts in a wind turbine can be made of recycled plastic, steel and aluminum or recycled at the end of life.
@16915V
Could you cite some hard data backing up this "energy negative" claim?
I have seen this claim before, but have never seen it backed up with numbers that prove it.
for the end of "new wind farm somewhere" post. It's always the same with the same comments, etc. We can go for Inhabitat for that
FYI - The Hoover dam doesn't produce electricity for Las Vegas - it was specifically contracted to send power to Los Angeles. And with the continuing drop in water levels, will not be able to generate any power in a few years. Actually, Southern Nevada has a concentrated solar power plant with a nominal capacity of 64 MW and maximum capacity of 75 MW in operation now.
Nellis Air Force base has a PV array that generates 14 MW at a cost of 2.2 cents per KWh compared to 9+ cents for the local electric utility.
Having said this, no one approach has all the answers. Geothermal is great if you live near a volcanic heat source. Sun, Wind, Nuclear, Wave, etc. all have their place. Anything that releases CO2 directly adds to the "greenhouse" gas problem. So Bio anything is just as bad as crude oil, coal, natural gas for releasing greenhouse gases.
My personal preference would be nuclear tea kettles similar to those used on nuclear vessels. Imagine a 5KW box that ran for 40 years!
You write about the size of the windfarm, but say nothing about the relative size (how big is the smallest coal generation plant in megawatts?)
Windfarms are very small, but take up a lot of room. I want to know this when I read the articles that boast their generation size.
I think wind energy is the way to go.
I think if they can get some kind of storage for when the wind isnt at its peak. Which is very few times during the year in most places at 100m. I think wind has a big fighting chance of turning off those coal power plants that are only used during peak electrical usage hours in the middle of the day. We arent looking at replacing the entire grid with renewable just yet. We are talking about getting rid of inefficient plants that are fired up for a 3-4 hrs a day and then waste energy when they cool off at night. Its really about getting the lights on when people need the energy. Its a common misconception to look at the total output of the country and say "its not even a drop in a bucket".
Most of these comments show an ignorance on energy issues. A new nuclear power plant will cost $8-12 billion for 1000 MW and will produce power 90% of the time for 30-50 years. A wind farm wiill cost around $2B per 1000 MW and will last 20-30 years. It will produce power around 30% of the time. 1 MW of wind at a good location will produce around 2.5M kWh per year. Do the math on this and you will see why wind is growing by leaps and bounds and nuclear is struggling. Wind needs back up reserve energy but much of that is already in place and is still much cheaper than other sources of energy, especially when the costs for the subsidies involved in coal and nuclear pollution are taken into account. And this strange argument that wind takes up land? There is nothing being done on the land in Kern County where this 3000 MW of wind is being installed. Cattle can still graze beneath turbines or in the midwest, farms can still farm beneath and around wind turbines. Really people, do some more research before putting your opinions into writing.