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Enel Green Power breaks ground on 450-MW Texas wind farm, hedges part of output

Enel SpA subsidiary Enel Green Power North America Inc. started construction of the approximately 450-MW High Lonesome wind farm in Upton and Crockett Counties, Texas, according to a Jan. 4 company news release.

Of the facility's total output, 295 MW will be hedged through a proxy revenue swap, a financial derivative agreement designed to produce stable revenues for the project regardless of power price fluctuations and weather-driven intermittency.

The facility will receive fixed payments based on the expected value of future energy production, with adjustments based on how the realized proxy revenue of the project differs from the fixed payment.

The proxy revenue swap was signed with insurer Allianz Global Corporate & Specialty Inc.'s alternative risk transfer unit, and Nephilia Climate, a provider of weather and climate risk management products. It was executed in collaboration with REsurety Inc., a renewable energy risk management and information services provider.

The High Lonesome wind project is estimated to cost $600 million and is expected to achieve operations by the end of 2019.