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EDP strategy includes possible sale of stakes in US renewable assets

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Essential Energy Insights - February 2021

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Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021


EDP strategy includes possible sale of stakes in US renewable assets

EDP - Energias de Portugal SA plans to use asset sales to help fund an accelerated expansion into wind and solar, and in an investor presentation March 12, said those plans include the sale of majority stakes in about 7,000 MW of projects around the world.

In the U.S., EDP has partial ownership of at least 18 wind and solar plants that have a total capacity of 4,025 MW, according to an S&P Global Market Intelligence analysis. In most of these assets, EDP has ownership interest of 51% or more.

Most of the plants in which EDP has partial ownership are currently in operation. The largest of these facilities are the 322-MW Maple Ridge wind farm located in Lewis County, N.Y., in which EDP owns 50%, and the 300-MW Pioneer Prairie Wind Farm in Mitchell County, Iowa, in which EDP holds a 75% interest.

According to the investor presentation, 85% of the output of EDP's installed wind and solar capacity in the U.S. is secured under power purchase agreements or forward market hedges. American Electric Power Co. Inc. subsidiary Indiana Michigan Power Co. is the largest of these offtakers, with a 20-year contract for 200 MW from the Headwaters Wind Farm in Randolph County, Ind., that expires in 2034. PG&E Corp. subsidiary Pacific Gas and Electric Co. is the offtaker from two facilities, contracting 103 MW from the Arlington Wind (Rattlesnake Road) plant in Gilliam County, Ore., under a 15-year agreement ending in 2024, and 19.8 MW from the Rising Tree Wind Farm II in Kern County, Calif., through a 20-year contract expiring in 2035. Credit ratings of several projects from which PG&E is the offtaker have been downgraded due to exposure to the utility, whose parent filed for bankruptcy protection in January amid liabilities from wildfires.

EDP also has partial ownership in two planned facilities, including the 1,600-MW Mayflower Wind Offshore Project off the coast of Massachusetts. The project is a joint venture between EDP subsidiary EDPR Offshore North America LLC and Royal Dutch Shell PLC subsidiary Shell New Energies US LLC, and EDP has entered into similar joint ventures with other partners on other offshore wind projects in Europe as a way to diversify risks. In Kansas, EDP has a 20% interest in the planned 199-MW Prairie Queen Wind Farm, having sold the remaining stake to a private equity fund. The plant is scheduled to begin operating in April and its output will be sold under a 20-year contract to Great Plains Energy Inc., part of Evergy Inc.

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