|Iberdrola Renovables’ turbines at the Star Point wind farm will start delivering power next year.|
The North American subsidiary of Iberdrola Renovables has reached an agreement to sell at least half of the energy produced by the Star Point wind farm, located in Sherman County, Oregon, to the California-based and publicly-owned Electric utility Modesto Irrigation District (MID).
The agreement will remain in force for twenty years and guarantees the long-term profitability of the 99-megawatt wind farm, which is currently under construction. It is hoped that Star Point, the construction of which has already generated close to 150 jobs to date, will start operating commercially towards the end of 2010. Iberdrola Renovables, through its subsidiary Iberdrola Renewables, has invested one billion dollars in Sherman County alone, where it already has 600 mW of installed power.
These types of contracts, entitled Power Purchase Agreements (PPAs), ensure the company long-term returns from its US-based energy installations. Although they may extend solely to the purchase of energy, these agreements can also include Renewable Energy Certificates (RECs), which can be traded in certain US States.
Thanks to the Star Point agreement, Modesto Irrigation District will witness a 12% to 16% surge in its production from renewable energy sources, having set itself a target of 20% for 2017.
Iberdrola Renovables is the second largest North American operator, present in 20 states with an installed capacity of 3,459 mW at 30 September, representing over 30% of the company’s combined total worldwide. It also had a further 368 mW under construction in the US alone at the close of September.
The company believes that the United States is a key country on its path to future growth, accounting as it does for 42% of its overall project portfolio of more than 57,400 mW at the close of the third quarter of 2009.
To date, Iberdrola Renovables has received 546 million dollars (52% of the total) from stimulus grants set up to champion renewable energies. The Treasury Department offers this cash support to companies investing in the country within the framework of the American Reinvestment and Recovery Act. The company hopes to receive roughly 30 million dollars more in 2009 and a further 430 million dollars in 2010. All current and future stimulus funds the company receives will be reinvested solely in the United States.
These incentives or grants, intended as a temporary replacement for PTCs (Production Tax Credits), afford investors direct assistance amounting to around 30% of the required investment for renewable energy facilities that start operating commercially or begin construction in 2009 or 2010.
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