250 MW of Wind Power for the Lone Star State
Setting the scene
Like many things in Texas, the appetite for wind power is huge. In fact, the State would be the world’s fifth-largest wind producer if it were a country in its own right. BayWa r.e. has proudly contributed to this positive renewables culture since completion of the Mozart wind farm in 2012.
In 2020, it was time to raise our game. Our US Wind team had to delicately navigate a minefield of financial and technical hurdles to complete Mozart’s successor project, named Amadeus. Right away, we knew this would be our largest wind development to date; but our team was up to the task.
Meeting the Challenges
The sheer enormity of this project is hard to overstate. They say everything’s bigger in Texas; this wind farm covers approximately 25,000 acres of state, private and state lands. Securing planning rights from all those stakeholders as well as permits from three separate Counties was a challenge and negotiating complex tax abatement agreement with multiple separate local jurisdictions. Building over 40 miles of roads and laying cables in the desert created water sourcing and logistical challenges as more than 1,000 heavy US trucks delivered heavy components within a few months.
The team did not rely on a general contractor but managed the construction hands on with tight management and oversight of the various civil and electrical contractors, transportation firms etc. From start to finish, the project was built within 12 months.
Mozart is a 30MW project using Nordex 2,5MW turbines versus Amadeus 96 2.7MW GE turbines to produce 250MW, more than eight times as much power. With advanced equipment being shipped in from overseas, this presented a significant logistical challenge. Our team consistently rose to that challenge with enthusiasm despite the extremes of Texas weather.
Further, energy projects in Texas face their own challenges when it comes to financing. Our US Wind Team’s knowledge and market presence since 2001, almost twenty years, convinced some of the world’s largest investors like Warren Buffets Berkshire Hathaway and big Canadian infrastructure fund Fengate to invest $300m at Closing. The sale of the energy was heavily negotiated with Morgan Stanley and the team negotiated above market energy prices. Commerzbank provided a $100m construction loan that was taken out at commercial operation date.
From conception and design to financing, construction and operations, our team has secured a source of clean energy that will last for decades to come. The project will displace 535,000 metric tons of CO2, and over 74,800 homes in the State of Texas will receive BayWa sourced renewable electricity.
In this highly complex project finance structure, our local team was able to secure a 1/3 equity interest in Amadeus and a 10-year asset management agreement. For more than a decade, the US Wind Team’s asset management services operates from its NERC/FERC qualified Carlsbad operations center and is managing multiple wind projects that it developed, constructed and sold over the past ten years. It has earned much respect by its current customers like Goldman Sachs and Northwestern Energy and especially its operational handling of Amadeus during the worst winter storm in Texas. This was a 100-year storm event that occurred only two months after COD.
The support of BayWa r.e.’s balance sheet allowed us to focus on meeting the challenges in constructing and structuring the Amadeus deal that provided over $40m in EBIT for the group in 2020. We are currently facing unprecedented challenges at our Strauss wind project in California.