UBS to acquire 50% stake in Spinning Spur II wind farm project in Texas

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Wind Power Market seeing increased risk and disruption

The wind power market has grown at a CAGR of 14% between 2010 and 2021 to reach 830 GW by end of 2021. This has largely been possible due to favourable government policies that have provided incentives to the sector. This has led to an increase in the share of wind in the capacity mix, going from a miniscule 4% in 2010 to 10% in 2021. This is further set to rise to 15% by 2030. However, the recent commodity price increase has hit the sector hard, increasing risks for wind turbine manufacturers and project developers, and the Russia-Ukraine crisis has caused further price increase and supply chain disruption. In light of this, GlobalData has identified which countries are expected to add the majority of wind power capacity out to 2030. Get ahead and download this whitepaper for more details on the current state of the Wind Power Market.

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UBS International Infrastructure Fund has agreed to acquire a 50% stake in the 161MW Spinning Spur II wind farm project from EDF Renewable Energy.

The definitive agreement to acquire the under-construction project is subject to completion of construction and customary conditions precedent.

The developer started construction on the project in Oldham County, Texas in June 2013 and expects to bring it into operations by 1 July 2014.

The project, which will feature 87 General Electric (GE) wind turbines of 1.85MW each, will be the Fund’s sixth investment and its second renewables acquisition.

"The project will benefit from the new Competitive Renewable Energy Zones transmission lines that connect the wind power capacity of the Texas Panhandle to high electricity demand areas in the state."

EDF Renewable Energy director of divestiture and portfolio management Raphael Declercq said the transaction model allowed the company to partner with UBS Infrastructure early in the project lifecycle.

"EDF Renewable Energy will remain in charge of development, construction and tax-equity financing until commercial operation is achieved; we will then bring in our expertise in operations and maintenance through EDF Renewable Services to optimise both partners’ long-term investment profitability," Declercq said.

The project will benefit from the new Competitive Renewable Energy Zones (CREZ) transmission lines that connect the wind power capacity of the Texas Panhandle to high electricity demand areas in the state.

The $6.9bn CREZ project is estimated to transmit 18.5GW of wind power from west Texas and the Panhandle to load centers in the eastern part of the state and help mitigate wind power curtailment.

In April 2013, EDF Renewable Energy dedicated phase one of the Spinning Spur wind power plant (Spinning Spur I) featuring 70 Siemens 2.3MW turbines at the same location with a 161MW capacity.

Spinning Spur I has been delivering its output to the Southwestern Public Service Company, a wholly owned subsidiary of Xcel Energy, under a 15-year power purchase agreement (PPA) in December 2012, while Spinning Spur II will also sell its output under a ten-year PPA.

Together these projects will generate enough clean electricity to power around 100,000 average Texas homes.