The US subsidiary of IBERDROLA RENOVABLES, the world’s leading wind power company(1), has signed its largest ever renewable energy sale contract with the Tennessee Valley Authority (TVA).
The 20-year agreement guarantees return during that time on all output of the Cayuga Ridge wind farm, which has installed capacity of 300 megawatts (MW). TVA, the US public company, will take a step further in its plans to add 2,000 MW of wind capacity to the system.
The Cayuga Ridge wind farm, currently under construction, is located south of Chicago near the towns of Odell and Emington in Illinois. IBERDROLA RENOVABLES is building the facility, which will be able to meet the average electricity consumption of 100.500 US households, with renewable energy stimulus funds (grants) provided by the US government.
This facility, whose construction work created more than 330 direct jobs, is scheduled to come on stream in the spring of this year. Cayuga Ridge is being built with turbines manufactured by a Pennsylvanica-based company.
The agreement underscores IBERDROLA RENOVABLES commitment to the US, a key market in its future growth strategy and where 42% of company’s project pipeline (which exceeded 57,400 MW(2) at the end of September 2009) is located.
IBERDROLA RENOVABLES has become the second-largest operator in the US, with operations in 20 states and installed capacity of nearly 3,600 MW –over 30% of the company’s global capacity- spread over 39 wind farms. The company, which already employs over 800 people in the US –nearly half of its total staff- has created more than 14,200 indirect jobs there since 2006.
The Tennessee Valley Authority is the largest public provider of electric power in the US. It mainly supplies the country’s large industries and 157 local distributors, through which the electricity reaches some nine million consumers in seven southern US states.
These agreements, known as a Power Purchase Agreement (PPA), ensure the long-term profitability of the energy facilities in the US. PPAs can exclusively cover the sale of energy or also include Renewable Energy Certificates (RECs), which can be traded in some US states.
US government support
Regulatory support of renewable energies is one of the main reasons IBERDROLA RENOVABLES is interested in the US. In fact, the company has so far received $577 million in US Treasury Department grants offered as part of the government’s incentive package for renewable energies to encourage companies to invest in the country.
IBERDROLA RENOVABLES hopes to receive an additional $430 million in 2010 as its wind farms come on stream. The company will reinvest all current and future grants in the US.
The grants provide an alternative aid to the PTCs (Production Tax Credits) and cover around 30% of investments made in each renewable energy installation coming on stream in 2009 and 2010 or whose construction is begun during this period.
IBERDROLA RENOVABLES is world leader(1) in both installed capacity (nearly 11,000 MW at the end of September 2009) and output (over 21,000 million kW/h).
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