EDF Renewable Energy has entered into a Membership Interest Purchase Agreement with Lincoln Renewable Energy to acquire the first phase of the up to 500 megawatt (MW) Hereford Wind Project in Texas, subject to certain conditions precedent, with an option to acquire the second phase of the project. Construction is expected to commence on the 200 MW first phase later this year in order to qualify it for the Production Tax Credit (PTC).
The project, encompassing approximately 15,000 acres in Deaf Smith County southeast of the town of Hereford, will take advantage of the CREZ (Competitive Renewable Energy Zone) transmission lines connecting the wind generating capacity of the Texas Panhandle to high electricity demand areas in the state. EDF Renewable Energy is in advanced negotiations to secure a long-term, fixed-price hedge agreement for the expected energy production of the first phase of the project.
"The Production Tax Credit extension in early 2013, along with the CREZ transmission build-out, creates a compelling opportunity for EDF Renewable Energy to strengthen our presence in the wind-rich Texas Panhandle," said Ryan Pfaff, Executive Vice President of EDF Renewable Energy.
He further added, "We applaud the Public Utility Commission of Texas for their vision in implementing the CREZ transmission project, which will provide access-to-market for low-cost, clean renewable energy, and in turn, spur economic development at the local level."
Commenting on the announcement, Declan Flanagan, CEO of Lincoln Renewable Energy said, "We are delighted to be working with a partner of the caliber of EDF Renewable Energy on the Hereford wind project, and look forward to the project quickly moving into construction." Morgan Stanley acted as advisor to Lincoln Renewable Energy on the transaction.
Texas continues to lead the nation in installed wind capacity, due to robust wind resources, a business friendly environment, and supportive stakeholders at the state and local levels. The Hereford project represents EDF Renewable Energy’s confidence in wind power’s growth and construction in the state of Texas.
Following on from the Spinning Spur (161 MW) and Bobcat Bluff (150 MW) projects commissioned in December 2012, and the Spinning Spur II (161 MW) project presently under construction in the Texas Panhandle, EDF Renewable Energy will soon expand the Group’s installed wind power capacity in the state to 972 MW.