Category: Press

Microsoft and other sustainability leaders adopt new tool to evaluate project-specific carbon impact of solar, wind and energy storage – a first for the industry.

BOSTON, July 14, 2021 – REsurety announced today a new data tool, called Locational Marginal Emissions, created with Microsoft and built on the Microsoft Azure cloud platform, to help customers maximize decarbonization investments. Top clean energy buyers, investors, and advisors including Microsoft, Hannon Armstrong, Marathon Capital, Akamai Technologies, Quinbrook Infrastructure Partners, Broad Reach Power, and The Brattle Group will use the new data product from REsurety to measure and maximize the decarbonization impact of each dollar they spend on solar, wind, and energy storage.

Buying clean energy is a means to an end: decarbonization. While many corporations have committed to achieve carbon neutrality or “net-zero” by a certain date, the methods for measuring and maximizing progress have been limited by a lack of data. To date, carbon measurement tools have relied on regional averages, which can materially over- or under-estimate the carbon impact of a specific clean energy project.

The new Locational Marginal Emissions data tool from REsurety addresses this problem.

REsurety’s patent-pending Locational Marginal Emissions technology calculates the carbon emissions at each node on an electric grid with hourly granularity. This helps decision-makers understand how much each specific clean energy procurement, load-siting, or energy storage decision contributes to their decarbonization goals.

Corporations can more precisely and strategically address their net-zero and carbon-free goals by using Locational Marginal Emissions to more accurately measure how much carbon is being avoided by their specific clean energy projects, as well as to better measure how much carbon is emitted as result of their electrical load.

“Locational Marginal Emissions solve the need for transparent and accurate carbon impact data,” said Lee Taylor, CEO of REsurety. “It’s what corporate ESG leaders want to know: how many tons of carbon emissions are actually avoided by the clean energy they’re buying.”

“We can play a key role in fully decarbonizing the grid,” said Brian Janous, GM of Energy and Renewables, Microsoft. “To do it the fastest and the most cost-effectively, we need to be able to understand the carbon impact of each MWh coming from a specific wind, solar, or storage plant. We want to make sure that the clean energy we’re helping to bring onto the grid has the maximum environmental benefit. REsurety’s Locational Marginal Emissions data gives us the transparency we need to make climate-wise investments.”

Sustainability leaders who will use the new data tool range from tech companies to investment banks and impact investors.

Climate investment firm Hannon Armstrong will use Locational Marginal Emissions to further enhance its sustainability investment screen for clean energy assets. “Understanding the carbon impact for all current and future portfolio projects is central to our purpose as a climate positive investor. LMEs offer precision that previously did not exist in the marketplace, and we are pleased to incorporate this innovative and complementary data set alongside our CarbonCount® methodology,” said Rich Santoroski, Chief Analytics Officer.

Marathon Capital, an industry-leading investment bank and advisor, plans to use Locational Marginal Emissions to support their clients. “We are eager to apply this data-driven approach to empower our clients to invest in projects with the largest carbon-reducing impact,” said Joan Hutchinson, Managing Director of the Offtake Advisory group.

David Scaysbrook, Managing Partner of Quinbrook, said, “REsurety is tackling a fundamental data gap we have all been grappling with. Reducing carbon emissions by deploying impactful renewables at scale lies at the core of our work at Quinbrook. Using LMEs will help us be even more discriminating in the investments we make, and it will assist us, our investors, and our offtake customers to create accurate carbon assessments that both track our ‘value add’ and meet increasing reporting obligations.”

REsurety VP of Power Market Research Dr. David Luke Oates and Dr. Kathleen Spees of The Brattle Group co-authored a white paper earlier this year that introduced the new Locational Marginal Emissions approach. “Increasingly, electricity systems that are decarbonizing will face grid pockets of clean energy ‘saturation’ where developing more clean energy will offer diminishing decarbonization value. LME data will offer policy makers and consumers the information they need to shift program dollars to where it can make the greatest impact,” said Dr. Spees.

Akamai Technologies, a leading provider of solutions that protect and deliver digital content, plans to use Locational Marginal Emissions to improve measurement of emission reductions derived from renewable energy investments. “In order to achieve our 2030 sustainability goals, which include powering 100% of global operations with renewable energy, we need transparency and accuracy in measuring our emissions,” says Mike Mattera, Director of Corporate Sustainability. “REsurety’s LMEs provide us with an extra level of confidence in our calculations.”

“Broad Reach Power is proud to join this group of industry leaders as an early adopter of the Locational Marginal Emissions tool,” said Paul Choi, EVP of Origination at Broad Reach Power, an owner/operator of utility-scale wind, solar, and energy storage power projects. “With a storage pipeline exceeding 14 GW, granular carbon emissions data will be crucial to ensure we more efficiently reduce carbon emissions while increasing grid reliability.”

REsurety’s Locational Marginal Emissions data is available for projects in ERCOT and will be available for other U.S. markets later this year. To learn how your company can better measure and maximize the carbon impact of your clean energy investments or purchases, contact [email protected].

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Clean energy strategies can miss true carbon emissions avoided if they’re based on regional and annual averages, Power Finance & Risk reported May 10 in a story by Taryana Odayar.

Increasingly popular “24/7 clean energy” strategies can miss project details if they’re based on regional and annual averages, Power Finance & Risk reported May 10 in a story by Taryana Odayar.

“That strategy ignores the sub-regional transmission congestion that can have a significant impact on carbon intensity,” the magazine quoted  REsurety CEO Lee Taylor saying on Norton Rose Fulbright’s May 4 Currents podcast . Instead, REsurety has a new way to measure carbon called “Locational Marginal Emissions” that looks at exactly where and when energy is added to the grid.

“We have a common enemy which is that not all megawatt-hours are equal, so a megawatt-hour generated from one location can be meaningfully different from another location based off of the electrical grid that that’s operating,” Taylor said on Currents. “As companies are trying to go carbon-neutral, carbon-free, carbon-negative, they need more than annual megawatt-hour accounting to do that effectively.”

Power Finance & Risk linked to REsurety’s white paper with The Brattle Group on LMEs, which compares two solar projects in West Texas. One displaces twice as much carbon because it has access to transmission to displace coal-fired generation, while the other curtails another nearby solar plant. The result helps companies such as Google that are committed to 24/7 strategies find out exactly how much carbon they’re reducing.

Full article (subscription required): http://www.powerfinancerisk.com/Article/3988459/AES-reveals-plans-to-replicate-Google-PPA-across-US.html

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Texas crisis illustrates how hourly generation during high-priced hours spells the difference between big wins and big losses for clean energy buyers and sellers.

Hourly power price and generation data is now available in REmap, a tool widely used by leaders in the renewable energy industry to identify value, understand risk and optimize offtake and hedging strategies. REmap’s new Hourly Data Explorer allows users to investigate the hourly performance of thousands of operational and synthetic projects.

The Hourly Data Explorer continues REsurety’s commitment to provide unrivaled breadth of market intelligence and depth of project-specific insight, empowering key decision makers.

“The February winter storm across the Southwest provided an extreme example of an already clear trend: fortunes are made and lost by generating during the right hours, not simply by achieving a high annual energy production,” said Lee Taylor, founder and CEO of REsurety. REsurety launched the map-based tool in May 2020 as an SaaS product, to provide the data and analytics required by the complex, data-driven industry that is the modern renewable power market.

Last year, REsurety used REmap to reveal how low energy demand during the coronavirus shutdown — combined with low natural gas prices and high renewable generation in April 2020 — sent the production-weighted wholesale price of wind-generated electricity to all-time lows across the SPP, PJM and MISO power grids. 

This week, in a column for Utility Dive, REsurety digs into what REmap data tells us are the top trends and takeaways in renewable energy markets today. 

The resiliency that the Texas grid so badly needed in February 2021 was foreshadowed by similar — though smaller — power market events in 2020 and 2019. “One thing REmap shows us is what renewable energy projects could have generated during the Texas deep freeze of February 2021, based on the actual wind and solar resource available,” Taylor said. 

Theoretical project generation data, given site-specific weather conditions and plant characteristics, will be available in REmap in early March.  Hourly metered generation at the project level for ERCOT projects will follow in early May. REmap can help users understand the financial implications of the February 2021 deep freeze on contract settlements, and inform their expectations moving forward.

REmap stands for “Renewable Energy Market Analytics Platform.” To keep it populated with the latest information, REsurety collects, cleans, and analyzes billions of data points from a wide range of sources. Industry leaders use the resulting massive database to inform their decision making on new investments, to benchmark against their peers and competitors, and to inform their offtake strategies – both as buyers and sellers. Current REmap customers include developers, investors, C&I buyers, and advisors. Joan Hutchinson, Managing Director of Marathon Capital and an early REmap client, described REmap as “a sea change in the access to quantity and quality of data.”

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Data management company Iron Mountain has layered additional hedge contracts onto virtual power purchase agreements that it signed with two wind farms in 2016 and 2017 as it seeks to mitigate various risks associated with the popular renewable energy contracts. REsurety provided the valuation and risk analytics for the transactions, and will serve as calculation agent for tracking and settlement over the lives of the contracts.

Read the full article on Power Finance & Risk here (subscription required): http://www.powerfinancerisk.com/Article/3954799/Iron-Mountain-supes-up-vPPAs-with-extra-hedges.html?ArticleId=3954799

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“We were delighted by the contribution [vPPAs] made to our sustainability goals but were frustrated by the financial volatility of the settlement payments and the limited ability we had to predict or manage that volatility,” wrote Kenneth Davies when he was director of energy portfolio management at Microsoft. Working with insurer Allianz and analytics firm REsurety, Davies came up with solutions including the proxy generation PPA, the volume firming agreement and the settlement guarantee agreement.

Read the full article on Power Finance & Risk (Subscription required)

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Taaleri Energia announces the use of a 10-year Proxy Revenue Swap for its 336 MW Texas wind farm. REsurety provided risk analytics supporting the transaction, with the substantial majority of the power to be contracted under the PRS.

The Taaleri SolarWind II fund has, together with AIP, Ilmarinen, and Akuo Energy, acquired 93% of the equity in the Escalade wind farm in Texas. Taaleri Energia, the project developer, will retain a minority stake in the project. The wind farm is located in Knox County, around 300kms west of the Dallas-Fort Worth metropolitan area.

The wind farm will consist of 45 Vestas V162 5.6 MW turbines and 20 Vestas V150 4.2 MW turbines and represents a USD 450 million plus investment in the North American renewable power sector. The construction work is scheduled to begin during Q2 2020 with the wind farm reaching operational status in Q4 2021.  The wind farm’s annual production of electricity will be approximately 1270 GWh. It will produce enough electricity to supply around 115,000 households and will offset the equivalent of 604,000 tonnes of carbon dioxide during each year of operation.

The project has been developed in-house by Taaleri Energia since 2018, following an acquisition from its development partners NorthRenew Energy and Chermac Energy. The Balance of Plant contractor is Mortenson Construction and Akuo Energy is the Construction Manager as well as the Technical and Commercial Manager for the project. Vestas will provide Operations & Maintenance services for the project under a 30-year contract.

Tax equity for the investment will be provided by BHE Renewables (a subsidiary of Berkshire Hathaway Energy) and construction financing by NORD/LB, Mizuho, Santander and Societe Generale. The substantial majority of the power produced by the wind farm will be contracted under a 10-year Proxy Revenue Swap with Allianz Global Corporate & Specialty SE’s Capital Solutions unit in collaboration with Nephila Climate.  REsurety Inc. provided risk analytics supporting the transaction.

“We are extremely happy with the first investment in the US from the Taaleri SolarWind II fund. The onshore wind resource in Texas is excellent and the location of our wind farm, with connections to the large population centres, is also ideal. The ERCOT market for electricity in Texas is very similar in structure and operation to the Nord Pool electricity market in the Nordic countries, a market that we are very familiar with. The fact that we have developed this project in-house and succeeded in bringing on board such high calibre partners, co-investors and financers is a testament to the strength of our development, engineering and investment capabilities”, said Taaleri Energia’s Managing Director, Kai Rintala.

 “Onshore wind in Texas presents its very specific peculiarities which we managed with innovative solutions. This transaction marks the beginning of a partnership with Taaleri and Akuo Energy. Two highly reputable players in the sector. We are pleased to have partnered with them and we are looking forward to continuing and developing our strong partnership going forward”, adds Domenico Tripodi, Partner at AIP.

“Akuo is excited to form its first partnership with Taaleri and AIP, companies who share similar values and DNA to ours and are keenly focused on accelerating the global energy transition.  The addition of the 336 MW Escalade project to Akuo’s operating portfolio is a significant step forward in meeting Akuo’s growth ambitions globally and we are thrilled that Taaleri and AIP have placed their trust in Akuo as an equity and operating partner” stated Thomas Coté, CEO Akuo Energy USA, Inc. 

Reposted as in Taaleri.

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Scout Clean Energy reaches commercial operations at Heart of Texas. REsurety provided risk analytics to support a Proxy Generation PPA for the project.

Colorado-based renewable energy developer, owner and operator, Scout Clean Energy, completed construction and successfully closed tax equity funding for the utility-scale 180-MW Heart of Texas Wind Farm (HTX) in McCulloch County, Texas. Scout is a portfolio company of Quinbrook Infrastructure Partners.

HTX utilizes 64 of the latest generation GE 2-MW platform wind turbines and three models of 2-MW platform turbines to optimize site production. Construction began in September 2019 and was completed following the commissioning of Scout’s 300-MW Ranchero Wind Farm in Crockett County, Texas late last year.

Scout entered a fixed-price balance-of-plant construction agreement with RES Americas Construction, who completed the construction. The asset management and post-construction operation will be undertaken by Scout.

Allianz Global Corporate & Specialty’s Capital Solutions unit, in partnership with Nephila Climate, has entered into a pgPPA with the project company. A pgPPA is the newest structure in a suite of risk management tools that allows buyers and sellers of renewable energy to manage the risks created by weather-driven renewable energy, which provides an alternative offtake arrangement guaranteeing a rate per MWh to the project for its proxy generation. REsurety provided the risk analytics supporting this long-term offtake transaction.

Construction financing of $255 million was provided by KeyBank as an Administrative Agent, Rabobank and CoBank ACB. GE Energy Financial Services and BHE Renewables invested tax equity. The project has tax incentive agreements in place with McCulloch County, McCulloch County Hospital District and Lohn Independent School District. It is estimated that the county will receive $36 million in tax revenue over the life of the project.

“Heart of Texas was completed on time and under budget which is quite an achievement given the wide-spread disruption that COVID-19 has caused across the entire US economy,” said Michael Rucker, CEO and founder of Scout Clean Energy.

“Reaching commercial operations at Heart of Texas brings Scout’s operational portfolio of wind energy generation to 698 MW with a further 146 MW under construction and more than 4,000 MW in our active development pipeline.”

Reposted as in Renewable Energy World.

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Engie North America has signed another Proxy Revenue Swap; this time for its 160mw wind project, Jumbo Hill, in Texas.

HOUSTON–(BUSINESS WIRE)–ENGIE North America Inc. today announced the start of construction of the Jumbo Hill Wind Project, located in Andrews County, Texas. With a total capacity of approximately 160 MW, Jumbo Hill is scheduled to be online by spring of 2020.

Jumbo Hill will provide energy and Renewable Energy Credits generated by the Project to a corporate customer under a virtual Power Purchase Agreement (PPA), and has also entered into a Proxy Revenue Swap for a portion of its generation with Allianz Global Corporate & Specialty’s specialist weather risk team, in collaboration with its partners at Nephila Climate. REsurety Inc provided risk analytics supporting the Proxy Revenue Swap transaction and will serve as the calculation agent on an ongoing basis.

Jumbo Hill will use 57 GE Renewable Energy turbines, each with 127-meter rotors and a capacity of more than 2 MW, and the balance of the facility will be built by Wanzek Construction, Inc. The total capital investment of the Project is over $150 million, and there will be up to 250 people employed at the site during the height of construction activity. The Project will also generate significant economic development in the local area: annual payments to landowners will total millions of dollars over the life of the Project, combined with purchases of local goods and services, and nearly $30 million in payments to the various taxing entities. The Project is expected to employ up to 12 people long-term. The Project is part of the portfolio acquired in 2018 by a subsidiary of ENGIE North America from Infinity Power Partners, a joint venture between Infinity Renewables and MAP® Energy.

“ENGIE is thrilled to be announcing our fifth wind project to start construction over the past year,” said Emily Cohen, Vice President of Commercial Strategy within ENGIE North America’s wind development team. “The construction of the Jumbo Hill Project will take ENGIE North America’s renewable generation built or under construction to more than 1.5 GW of capacity. It is a strong project in a unique location in West Texas, and we expect it to complement and help grow the evolving industries in the region.”

About ENGIE in North America Inc.

ENGIE North America manages a range of energy businesses in the United States and Canada, including clean power generation, cogeneration, and energy storage; retail energy sales; and comprehensive services to help customers run their facilities more efficiently and optimize energy and other resource use and expense. Nearly 100 percent of the company’s power generation portfolio is low carbon or renewable. Globally, ENGIE is the largest independent power producer and a leading energy efficiency services provider in the world, with operations in 70 countries employing 160,000 people, including 1,100 researchers in 12 R&D centers. For more information, please visit www.engie-na.com, @ENGIENorthAm, and www.engie.com.

About MAP® Energy

MAP® Energy is a leading investor in the development of renewable energy projects and has funded more than 10,000 megawatts of operating wind and solar generating capacity located across the United States. More information is available at www.map-energy.com.

Reposted as in BusinessWire.

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Ares Management uses PRS structure to protect long term cash flows from a three-project portfolio in ERCOT totaling approximately 400MW of nameplate capacity.

HAMILTON, Bermuda, Feb. 28, 2019 /PRNewswire/ — Nephila Climate (“NCx”), the weather and ESG-driven specialty division of Nephila Holdings Ltd. announced the first use of a Proxy Revenue Swap (“PRS”) for the re-powering of a wind project. Ares Management Corporation, a leading global alternative asset manager, is the first to utilize the PRS structure for a repowered project. A PRS is a hedging contract that provides renewable energy projects with protection against exposure to the risks inherent in relying on a weather-driven fuel source, in addition to power price volatility.

A fund managed by Ares’s Infrastructure and Power strategy used three different PRS contracts to facilitate the financing for the acquisition and re-powering of the wind power portfolio from BP in the ERCOT region. The three-project portfolio included Sherbino Mesa 2, Trinity Hills and Silver Star.

“Just as the PRS has now become a standard product for de-risking merchant renewable energy projects, we expect it to play a key role in helping sponsors to finance the repowering of wind projects,” said Richard Oduntan, CEO of NCx. “With a forecasted surge in repowering projects over the next several years, we are pleased that the Ares PRS transactions will be the vanguard of many more to come.”

The projects entered into ten-year PRS contracts with Allianz Global Corporate & Specialty, Inc.’s Alternative Risk Transfer (ART) unit, in partnership with Nephila Climate. REsurety, Inc. provided the risk analytics needed to support the PRS transactions and will serve as the calculation agent on an ongoing basis.

“We continue to break new ground with PRS in using it to support the re-powering of wind projects,” stated Karsten Berlage, managing director, Allianz ART. “We are pleased to collaborate with NCx yet again on another ‘first,’ and to help ARES manage the long-term revenue risks for these projects.”

According to Bloomberg New Energy Finance, the market for re-powering is expected to surge in the next two years with 1.25 and 2.02 GW of re-power projects predicted to be completed in 2019 and 2020, respectively, in the US alone.

Reposted as in PR Newswire.

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Quinbrook announces that they have closed financing on Ranchero Wind Farm in Texas, a 300MW project, via a Proxy Revenue Swap with Allianz Global & Specialty, Inc.’s Alternative Risk Transfer unit (‘Allianz’), in partnership with Nephila Climate. REsurety provided the risk analytics supporting the PRS transaction.

LONDON and HOUSTON, Jan. 17, 2019 /PRNewswire/ — Quinbrook Infrastructure Partners (‘Quinbrook’), a specialist investor in low carbon energy infrastructure, today announced that its portfolio company, Scout Clean Energy LLC (‘Scout’) has closed construction financing and tax equity commitments on the 300MW Ranchero Wind Farm located in Crockett County, Texas (‘Ranchero’).

The Ranchero project is expected to be operational by year-end 2019 and has been developed from inception by the Scout team. Ranchero will utilize 120 of the latest generation GE 2.5MW wind turbines with 127m rotors and has secured a 10-year Proxy Revenue Swap with Allianz Global & Specialty, Inc.’s Alternative Risk Transfer unit (‘Allianz’), in partnership with Nephila Climate. REsurety provided the risk analytics supporting the PRS transaction and will serve as the calculation agent on an ongoing basis. Construction financing, including letters of credit, is being provided by KeyBank. GE Energy Financial Services (‘GE EFS’) underwrote and committed a portion of the tax equity.

Scout has entered into a fixed price balance of plant construction agreement with RES Americas, with construction management to be undertaken by Harvest Energy Services, a Scout affiliate.

David Scaysbrook, co-founder and Managing Partner of Quinbrook, said: “It is especially pleasing to have closed a major new financing and commenced construction of the first project to be developed from scratch by the Scout team. Ranchero has the potential to be a significant new wind project for the Texas power market and enjoys a strong wind resource. Securing Allianz as Ranchero’s offtake partner supports our view of the quality of the project and its compelling wind resource fundamentals. Including the 200MW Persimmon Creek wind farm recently completed and already operational, Scout’s operating portfolio is targeted to exceed 1GW within the next 18 months and is well on the way to exceeding our 2GW growth target by 2021.”

“Quinbrook and the Scout team are pleased to have closed and launched construction of another utility scale wind project with distinguished partners and the opportunity to employ new financing and off-take structures in the Ranchero transaction. We believe Ranchero is an exceptional wind project and the transaction has attracted several high-quality partners in GE Renewable Energy, GE EFS and KeyBank,” said Jeff Hunter, Senior Managing Director of Quinbrook. “This year we expect to close and commence construction on several additional wind projects in the Scout portfolio which are located across a diverse spectrum of US power markets.”

Together, Quinbrook and Scout have rapidly expanded their utility scale US wind project portfolio to over 2.3GW of potential renewable power capacity, spanning 13 projects in 10 states.

Quinbrook and Scout were advised by Akin Gump Strauss Hauer & Feld LLP and Paragon Energy Advisors.

About Scout Clean Energy

Scout Clean Energy (www.scoutcleanenergy.com) is a North American wind energy developer and owner-operator.  Scout is developing over 2.3 GW of PTC qualified wind projects across 10 US states covering most of the continent’s power markets. Scout’s operations affiliate Harvest Energy Services, Inc. provides independent O&M and construction management services to the wind industry. Scout and Harvest together have over 125 employees and are based in Boulder, Colorado.

About Quinbrook

Quinbrook Infrastructure Partners (www.quinbrook.com) is a specialist investment manager focused exclusively on lower carbon and renewable energy infrastructure investment and operational asset management in the US, UK and Australia. Quinbrook is led and managed by a senior team of power industry professionals who have collectively invested over US$ 17 billion in energy infrastructure assets since the early 1990’s, representing over 30GW of power supply capacity. Quinbrook’s investment and asset management team has offices in Houston, London, Jersey, and the Gold Coast of Australia. Quinbrook has completed multiple investments in both utility and distributed scale wind power, gas fired power reserve and ‘smart grid’ projects in the US, UK and Australia and currently manages Cape Byron Power (www.capebyronpower.com), one of Australia’s largest base-load 100% renewable power generators.

Reposted as in PR Newswire.

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Italian energy giant Enel utilizes the largest Proxy Revenue Swap signed to date to support construction of its largest wind farm globally.

• The around 450 MW High Lonesome wind project will be the largest wind farm in Enel’s global renewables portfolio
• The energy generated by a 295 MW portion of the project will be hedged through a long-term Proxy Revenue Swap, a risk management strategy for renewable energy projects, making it the largest deal of its kind for a single plant by capacity to be signed 
• The project will involve an overall investment of around 600 million US dollars

ROME and BOSTON, Jan. 04, 2019 (GLOBE NEWSWIRE) — Enel, through its US renewable subsidiary Enel Green Power North America, Inc. (“EGPNA”), started construction of the around 450 MW High Lonesome wind farm in Upton and Crockett Counties, in Texas. Once completed, High Lonesome will be the largest wind farm in Enel’s global renewables portfolio. The energy generated by a 295 MW portion of the wind farm will be hedged through a Proxy Revenue Swap (“PRS”), a risk management strategy aimed at minimising price and weather-related risks.

“The start of construction of our largest wind project to-date represents a major commitment to growing our business in the US and specifically in Texas,” said Antonio Cammisecra, Head of Enel Green Power. “The project underscores our ability to work with partners to tailor energy solutions to fit their needs and continue to manage and deliver to our customers the complex deals necessary in today’s evolving energy market. We look forward to continuing to serve as the partner of choice, dedicated to delivering a sustainable energy future.”

Investment in the construction of High Lonesome amounts to approximately 600 million US dollars and is part of the investment outlined in Enel’s 2019-2021 strategic plan. The project is currently financed through the Group’s own resources and is expected to enter into operations by the end of 2019. Once fully operational, the wind farm will be able to generate around 1.7 TWh annually, while avoiding the emission of over 1.1 million tons of CO₂ per year.

Enel has entered into a PRS for a 295 MW portion of the project with insurer Allianz Global Corporate & Specialty, Inc.’s Alternative Risk Transfer unit (Allianz), and Nephila Climate, a provider of weather and climate risk management products. The PRS is a financial derivative agreement designed to produce stable revenues for the project regardless of power price fluctuations and weather-driven intermittency, hedging shape risk in addition to risk associated to price and volume.

Under this agreement, High Lonesome will receive fixed payments based on the expected value of future energy production, with adjustments payed depending on how the realised proxy revenue of the project differs from the fixed payment. The PRS for High Lonesome, which is the largest by capacity for a single plant globally and the first agreement of its kind for Enel, was executed in collaboration with REsurety, Inc., a leader in renewable energy risk management and information services.

“The construction of High Lonesome is a strong testament to the popularity and success of innovative renewable energy protections,” said Karsten Berlage, Managing Director, Allianz Risk Transfer. “The majority of today’s stakeholders champion the continued growth of renewables and that is why Allianz is committed to flexible strategies such as the PRS that mitigate those risks – long term.”

“Renewable energy projects are under increasing pressure to deliver predictable returns despite the increasing volatility of the value of intermittent generation,” said Lee Taylor, Co-Founder and CEO, REsurety. “We developed the Proxy Revenue Swap specifically to deliver unrivalled certainty of cash flows, regardless of power price volatility and weather-driven intermittency. We are delighted to have had the opportunity to collaborate with Enel, Allianz and Nephila to bring the largest PRS transaction to fruition.”

In Texas, Enel currently operates the 63 MW Snyder wind farm, located in Scurry County.

Enel Green Power North America, part of Enel Green Power, is a leading owner and operator of renewable energy plants in North America with projects operating and under development in 24 US states and two Canadian provinces. The company operates around 100 plants with a managed capacity of around 5 GW powered by renewable hydropower, wind, geothermal and solar energy. The company is currently the largest wind operator in Kansas and Oklahoma.

Enel Green Power is the Enel Group’s business line dedicated to the development and operation of renewables across the world, with a presence in Europe, the Americas, Asia, Africa and Oceania. Enel Green Power is a global leader in the green energy sector with a managed capacity of around 43 GW across a generation mix that includes wind, solar, geothermal, and hydropower, and is at the forefront of integrating innovative technologies into renewable power plants.

Reposted as in Enel.

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Microsoft discusses their co-development and adoption of Volume Firming Agreements: a tool that enables PPAs to more effectively serve as protection against energy price fluctuations.

Buying renewable energy should be easy — here’s one way to make it less complex

By Brian Janous, Microsoft General Manager of Energy and Sustainability; Kenneth Davies, Microsoft Director of Innovation for Energy Strategy & Research; and Lee Taylor, cofounder and CEO, REsurety

It would be difficult to overestimate the impact that corporate procurement of renewable energy, primarily through power purchase agreements (PPAs), has had on the overall renewable market. In less than a decade, renewable energy created from corporate PPAs went from zero to more than 13 gigawatts in the U.S. alone.  Microsoft is one of the largest players in this market, beginning with a 110-megawatt wind project in Texas in 2013 to a portfolio of more than 1.2 gigawatts in six states and three continents.

This rapid growth, both within our portfolio and beyond, is because these deals are good for business. Renewable energy agreements help companies meet sustainability commitments customers increasingly expect and – if structured properly – do so in a way that provides a hedge against the risk of rising electricity costs on the open market. The fuel for renewable energy projects – the wind and the sun – are free, enabling a fixed price over the length of the agreement. However, as the market has matured, it’s become clear that other risks and complexities exist within the PPA structure that may inhibit their effectiveness as risk management tools. The failure to simplify this complex process and mitigate the risk assumed by the buyer could endanger the corporate procurement market, causing it to slow or stall out completely.

We want to see continued growth of renewables. That is why today, Microsoft and REsurety, along with their partners at Nephila Climate (“Nephila”) and Allianz Global Corporate & Specialty, Inc.’s Alternative Risk Transfer unit (Allianz) announced a new solution that mitigates those risks. We’re calling it a volume firming agreement (VFA), and Microsoft, in addition to co-developing it, will become the first adopter.

The concept of a VFA has its roots in late 2010, when Nephila Capital approached several of the first corporate renewable energy buyers with the idea of helping them manage the risks inherent in PPAs. At the time, however, the idea was just that. Unable to find a corporate buyer willing to put in the effort to help co-develop what would become the VFA, Nephila elected instead to sponsor an MBA project at the Tuck School of Business at Dartmouth College, led by Lee Taylor. Upon graduation, Taylor turned that concept into a company, REsurety. In 2016, Nephila and REsurety finally found that corporate partner in Microsoft, when we signed a PPA with Allianz for the output of the 178-megawatt Bloom wind project in Kansas. This was the first Proxy Generation PPA, winning honors as North American Wind Project of the Year, and laying the groundwork for today’s VFA.

VFAs are intended to be a simple fix to a big challenge with renewable energy PPAs, namely that these deals expose the buyer to all the weather-related risks of power production, and the inherent intermittent nature of wind and solar means there are hourly issues to be addressed. Put simply, the power needs of buyers are static but the power from the project varies on a day-to-day, hour-to-hour basis.

While it’s true that the fixed-price nature of PPAs provide the buyer some protection against a long-term increase in price, the hourly variability of wind and solar creates near-term complexity and risk. In periods when the wind or solar project is producing more than average, the market value of this energy is often lower due to the impact of additional supply in the market. Conversely, in periods when it is producing less than average, the market price is often high.  In other words, volume and price move inversely. This variability and the financial impact are difficult for even the savviest energy buyers and a substantial deterrent to smaller companies, as well as retailers, looking to engage in the renewables market.

But what is undesirable to buyers is very attractive to others, namely insurance companies whose core business revolves around taking weather-related risks, including temperature, rain, snow, wind and so on. VFAs effectively remove the risk related to how future weather conditions will impact the financial value of a PPA from buyers and reallocates it to people who want that risk.

As the market for VFAs and similar products grow, we believe it will create new incentives for those who now bear these risks to procure storage resources and other assets capable of physically balancing the intermittency of renewables. Through the aggregation of risk, these insurers will be able to procure resources at economies of scale that even Microsoft is unable to achieve. In that way, today’s financial firming solution is tomorrow’s physical firming solution, accelerating the adoption of storage and other resources required to eventually transition to a 100 percent carbon-free power generation system.

VFAs are not a replacement for PPAs, nor are they a product Microsoft is selling. They are contracts that simply sit atop new PPAs, or existing PPAs, mitigating the risk to the buyer. Microsoft has signed three of these contracts with Allianz, in conjunction with their partners at Nephila, covering three wind projects in the U.S. in Texas, Illinois and Kansas, totaling almost 500 megawatts. As Microsoft continues to purchase renewable energy to power our operations, we anticipate utilizing VFAs to firm the energy and match our consumption on an hourly basis.

At Microsoft, we are committed to driving a more sustainable future beyond our own four walls. That is why our corporate energy commitments are far broader than just megawatts. We intend to support and enable the transformation of the energy sector using our buying power and innovations so everyone can benefit. REsurety is also focused on enabling the growth of renewable energy by providing tools to understand and manage risks.

The partnership between our two organizations leverages deep expertise in markets, risk and the challenges buyers face in these markets. That is why we’re confident that innovations like the VFA will make it cheaper and easier to procure renewable energy, enabling corporate buyers of all sizes, as well as retailers, to play a role in enabling the transition from fossil fuels to clean energy.

We invite other corporate buyers to take a more in-depth look at our white paper expounding on the role of Proxy Generation PPAs in the implementation of VFAs, co-authored by Microsoft, REsurety and Orrick, Herrington and Sutcliffe LLP, available today here, or contact us. We’re looking forward to a future where even more corporations can participate in the renewable energy market, which would be a big step toward a low-carbon future for the planet.

Reposted as in Microsoft.

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Nephila Climate And Allianz Close Proxy Revenue Swap And Corporate PPA For Macquarie Capital’s Lal Lal Wind Farm

HAMILTON, Bermuda, June 19, 2018 /PRNewswire/ — Nephila Climate (“NCx”), the weather and ESG-driven specialty division of Nephila Holdings Ltd., together with Allianz Global Corporate & Specialty’s alternative risk transfer unit (“Allianz”), announced today that they have closed two related transactions to offset future price and volume risk for the Lal Lal wind farm project (“Lal Lal”), being developed in Victoria, Australia. Lal Lal is owned by a partnership comprising InfraRed Capital Partners, Macquarie Capital and Northleaf Capital.

One of the transactions is a Proxy Revenue Swap with Lal Lal and will provide the new wind farm with a high degree of revenue certainty, with Nephila Climate and Allianz assuming production volume, timing of energy generation and future energy price risks. The second transaction will help Orora Ltd., a large consumer of electricity, lock in the cost of procuring baseload green energy from the Lal Lal project, without the production variability traditionally associated with power purchase agreements. These two transactions combined, mark the first time a Proxy Revenue Swap has been applied to wind energy in Australia.

The 228 MW Lal Lal project, located in Central Highlands, Victoria, expects to begin producing energy in the third quarter of 2019. In total, the Proxy Revenue Swap product has now been transacted on more than one GW of renewable energy (wind and solar) development projects.

Nephila Climate’s CEO Richard Oduntan said: “NCx is delighted to provide innovative solutions to another wind farm development while simultaneously helping a commercial and industrial consumer of electricity purchase green energy in the form that suits their needs.”

Allianz’s Managing Director Karsten Berlage also noted “We are excited to create and commercialize this new risk management tool for the Australian renewables industry following our successful provision of hedging solutions for investments in North America.”

Key advisers on the transactions included:

• REsurety as risk analytics provider to Nephila and Allianz and will also serve as calculation agent.
• Risk Solutions International (Pty) Ltd and CQ Partners as local intermediaries 
• Norton Rose Fulbright as legal advisers to Allianz and Nephila
• Herbert Smith Freehills as legal advisers to Macquarie Capital 
• Andrew George from Amanzi as commercial adviser to Macquarie Capital

Reposted as in CISION PR Newswire.

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The transaction between Invenergy and Allianz Risk Transfer marks the fourth Proxy Revenue Swap to close in the U.S.

Allianz Closes Proxy Revenue Swap for Invenergy’s Upstream Wind Farm

• 10-year Proxy Revenue Swap Hedge for Invenergy Upstream Wind Energy Center in Antelope County, Nebraska, US, ensures stable revenues despite uncertainty of intermittent wind resource
• Allianz cooperates with Nephila and REsurety to provide innovative financing solution

NEW YORK & CHICAGO–(BUSINESS WIRE)–Allianz Global Corporate & Specialty’s (AGCS) alternative risk transfer unit (“Allianz”) has executed a 10-year Proxy Revenue Swap with Invenergy, North America’s largest privately held renewable energy company, for its Upstream Wind Energy Center, protecting the new wind project’s revenues from the financial risks associated with future energy prices and the uncertain volume and timing of energy generation. The 202.5MW Upstream project, located in Antelope County, Nebraska, expects to complete construction and begin producing energy in the fourth quarter of 2018.

The Upstream transaction marks the fourth Proxy Revenue Swap to be executed since the innovative hedging product was launched in 2016, bringing the total of Proxy Revenue Swap-hedged wind project capacity to nearly 700MW. As with prior Proxy Revenue Swap transactions, Nephila Climate (“Nephila”) partnered with Allianz in managing the risks associated with the transaction. REsurety, Inc. (“REsurety”) provided the risk analytics used to support underwriting of the hedge prior to its close, and will serve as the calculation agent on an ongoing basis.

“At Invenergy, we apply innovative thinking to not just development, but also to financing of our clean energy projects. We’ve been considering the Proxy Revenue Swap structure since it came to market, and saw a great opportunity to apply this innovative new hedging structure to Upstream. De-risking our future revenues with this hedging structure was critical to securing the project’s financing,” said Jim Shield, EVP and Chief Commercial Officer at Invenergy.

Allianz’s Managing Director Karsten Berlage added: “Allianz was delighted to collaborate with the Invenergy team to help bring this project to fruition. The Upstream transaction serves as further confirmation of the value that wind projects see in the holistic revenue risk management enabled by the Proxy Revenue Swap product.”

As North America’s largest privately held renewable energy company, Invenergy and its affiliated companies develop, own, and operate large-scale renewable and other clean energy generation and storage facilities in the Americas and Europe.

Invenergy and its affiliated companies have developed more than 17,300 megawatts of projects that are in operation, construction or contracted, including wind, solar, natural gas-fueled power generation and energy storage projects.

Allianz Global Corporate & Specialty (AGCS) is the Allianz Group’s dedicated carrier for corporate and specialty insurance business. AGCS provides insurance and risk consultancy across the whole spectrum of specialty, alternative risk transfer and corporate business.

Nephila is AGCS’s strategic partner in weather and climate-linked risk management and works in collaboration with the corporate and specialty insurer to manage the risk exposures of the Proxy Revenue Swap, as part of a larger investment portfolio which includes other weather and climate-linked risks across a range of industries from energy to agriculture. “We are very pleased to have executed this hedge to help Invenergy manage its revenue risk for the project, as further proof that the leaders in renewable development see real value in this structure,” said Richard Oduntan, CEO at Nephila Climate.

REsurety, Inc. is the leader in hedge underwriting and settlement services for generation-linked risk management structures for the wind industry. “The uncertainty of the weather as a fuel is an ever-growing source of risk for the energy industry, and the Upstream transaction is a terrific example of how the market is responding to that challenge through the adoption of new risk management tools,” said Lee Taylor, Co-Founder and CEO at REsurety.

About Allianz Global Corporate & Specialty

Allianz Global Corporate & Specialty (AGCS) is the Allianz Group’s dedicated carrier for corporate and specialty insurance business. AGCS provides insurance and risk consultancy across the whole spectrum of specialty, alternative risk transfer and corporate business: Marine, Aviation (incl. Space), Energy, Engineering, Entertainment, Financial Lines (incl. D&O), Liability, Mid-Corporate and Property insurance (incl. International Insurance Programs).

Worldwide, AGCS operates in 32 countries with own units and in over 210 countries and territories through the Allianz Group network and partners. In 2016, it employed around 5,000 people and provided insurance solutions to more than three quarters of the Fortune Global 500 companies, writing a total of €7.6 billion gross premium worldwide annually.

AGCS SE is rated AA by Standard & Poor’s and A+ by A.M. Best.

About Invenergy

Invenergy drives innovation in energy. Invenergy and its affiliated companies develop, own, and operate large-scale renewable and other clean energy generation and storage facilities in the Americas and Europe. Invenergy’s home office is located in Chicago and it has regional development offices in the United States, Canada, Mexico, Japan and Europe.

Invenergy and its affiliated companies have developed more than 17,300 megawatts of projects that are in operation, construction or contracted, including wind, solar, natural gas-fueled power generation and energy storage projects. For more information, please visit www.invenergyllc.com.

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Capital Power’s Bloom Wind is recognized for its use of the first Proxy Revenue Swap hedging structure to secure long term revenues.

EDMONTON, AB–(Marketwired – March 16, 2017) – Capital Power’s Bloom Wind project was recognized by infrastructure journal and project finance magazine, IJGlobal, as the North American Wind Deal of the Year. The annual IJGlobal Awards, which recognize and celebrate the best in energy and infrastructure deals over the past year, were handed out in New York on March 15, 2017.

Capital Power’s Bloom Wind project earned the award recognition for the use of an innovative 10-year Proxy Revenue Swap agreement with Allianz Risk Transfer (ART), a subsidiary of Allianz SE, the worldwide insurance and asset management group, covering 100 per cent of the project’s output. The unique product was created and commercialized through a partnership amongst ART, Nephila Capital Ltd., REsurety Inc. and Altenex LLC, which swaps the floating revenues of the wind farm — those driven by the hourly wind resource and power prices — for a fixed annual payment.

“We’re proud to pioneer the use of this innovative risk-management solution for hedging potentially volatile revenues of wind farms at Bloom Wind,” said Paul Wendelgass, Capital Power Director, Business Development. “The agreement secures long-term predictable revenues for investors, which provided an opportunity for Capital Power to secure a renewable energy tax-equity investment for Bloom Wind with Goldman Sachs Alternative Energy Group in December 2016.”

The first-of-its-kind product was developed by ART to help project owners manage the revenue volatility associated with the wind resource variability related to large-scale wind projects. Capital Power is among the first Independent Power Producers in North America to utilize a proxy revenue swap agreement as a risk-management solution for hedging revenue volatility of wind farms. The product is an alternative to securing a traditional contracted off-taker through a Power Purchase Agreement and has potential to be replicated for other renewable projects in the U.S. and globally.

“This pioneering solution enables both investors and corporations alike to launch sizable renewable energy projects, and is a key growth area for Allianz,” said Karsten Berlage, Managing Director at Allianz Risk Transfer. “By circumventing high up-front costs associated with clean energy, these projects will be brought online at a much faster pace and we are very proud to partner with Capital Power and to support Microsoft’s largest wind energy purchase to date.”

In November 2016, Microsoft Corp. became the first buyer to participate in this structure, acquiring the environmental attributes connected to Bloom Wind from ART for a 10-year period. The combined output from Bloom and a Wyoming wind farm will produce enough energy on an annual basis to cover the annual energy used at Microsoft’s Cheyenne, Wyoming, datacenter.

“Microsoft is constantly looking for new ways to accelerate the adoption of clean energy,” said Christian Belady, general manager of cloud infrastructure strategy and architecture at Microsoft. “We worked closely with ART and Capital Power to come up with the innovative finance model. This approach has the potential to bring more clean energy online, faster, and we’re proud that our participation helped make this project a reality.”

The 178 megawatt Bloom Wind project, located in Kansas is situated within one of the strongest wind regimes in the U.S. Construction of the project began in August 2016 and is expected to be completed on time and on budget in the third quarter of 2017.

About Capital Power

Capital Power (TSX: CPX) is a growth-oriented North American power producer headquartered in Edmonton, Alberta. The company develops, acquires, operates and optimizes power generation from a variety of energy sources. Capital Power owns more than 3,200 megawatts of power generation capacity at 18 facilities across North America. More than 700 megawatts of owned generation capacity are in advanced development in Alberta and under construction in Kansas.

About Allianz Risk Transfer

Allianz Risk Transfer (ART) is the center of competence for alternative risk transfer business within the Allianz Group offering tailor-made insurance, reinsurance and other non-traditional risk management solutions to industrial and financial clients worldwide. Founded in June 1997, the company is a wholly-owned subsidiary of Allianz Global Corporate & Specialty SE. ART operates through affiliated companies with offices in Amsterdam, Bermuda, Dubai, Liechtenstein, London, New York and Zurich. Its client base spans across all industry sectors and its solutions are most effective for clients facing unusual or complex risks, where traditional (re)insurance or financial products are inadequate. As of today, ART AG is rated AA- by Standard & Poor’s and A+ by A.M. Best. www.art.allianz.com

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David Clemens, Apex Clean Energy’s Director of Finance, discusses how the innovative Proxy Revenue Swap hedging structure has enabled Apex to bring more clean energy to market.

This past summer, Apex closed on the joint financing for the Cotton Plains Wind, Old Settler Wind, and Phantom Solar energy facilities, all located in Texas. One of the many unique features of the transaction was our employment of a novel financial hedge product called a proxy revenue swap, or PRS, for Old Settler Wind. Without the economic certainty that the PRS brings to that project, Apex would not have been able to source the roughly $330 million in debt and equity capital necessary to build and operate the facilities. But because the PRS was relatively new and not well understood in the financial markets, its presence at Old Settler presented unique challenges during the financing process.

Innovation Expands Investment Opportunities

Financial hedges are not new to the energy industry. A more common version, often called a fixed-for-floating swap, is well understood in the market. In a typical fixed-for-floating swap, a project will sell the electricity it generates into the spot, or merchant, market. The price of energy in the spot market is in constant flux, and in certain circumstances can fluctuate wildly from hour to hour. The vast majority of project financing parties will not invest in a project selling power into the spot market because they are uncomfortable with the cash flow instability, which increases the uncertainty that their investment will be repaid. To counter this risk and make the project more attractive to financing parties, the project owner will enter into an agreement with a counterparty—typically a bank or an energy company—whereby the counterparty will agree to pay the project a fixed price for energy generated by the project, in return for the value that the project receives from the spot market. For instance, let’s say Old Settler Wind agreed to a swap at a price of $30 per megawatt-hour (MWh). Then, if Old Settler were to sell one MWh into the ERCOT market at $20, it would transfer this $20 to the swap counterparty, and the swap counterparty would transfer $30 back to Old Settler. Likewise, if the MWh sold for $35, the project would send $35 to the swap counterparty, and the swap counterparty would still send $30 back to Old Settler. Thus, the project is swapping the “floating” price received for that MWh (i.e., $20 or $35) for the fixed price of $30. This arrangement allows the project to rely on a steady cash flow—$30/MWh—which investors can rely on when calculating their expected investment return.

Eliminating Wind Production Risk to Enhance Deal Value

Under a traditional fixed-for-floating swap, however, the swap counterparty will not take a position on how many MWh a project is expected to produce (in other words, they do not want to take the risk relating to the productivity of the wind resource). To avoid this, traditional swap counterparties will only agree to swap the P99 volume produced by the project (that is, the MWh that a project can be expected to produce with 99% certainty). As a result, all of the energy that a project generates above the P99 generation level is not subject to the swap; this energy is sold into the spot market without the benefit of a fixed price. Because most investors place a lower value on the energy that does not have a guaranteed price, they discount this post-P99 production when sizing their investment amount. Depending on the specifics at a particular wind project, the amount of post-P99 production can be considerable, and failing to account for this production can lead to a dramatically reduced investment from financing parties.

Enter the proxy revenue swap. At its core, the PRS guarantees a project a fixed amount of revenue, regardless of how many MWh the project actually produces. Thus, even if the wind doesn’t blow for an entire year—and likewise the wind farm doesn’t generate any electricity—the project will still receive revenues from the PRS counterparty. In return, the project will turn over all the revenues that it actually receives from selling its energy into the spot market over that same period of time. The amount of revenue guaranteed under a PRS is primarily a function of the counterparty’s evaluation of the project’s wind profile (PRS counterparties are often insurance companies with experience evaluating weather-related risk).

Put simply, a traditional fixed-for-floating swap takes price risk off the table. The PRS takes this concept one step further by also taking wind production risk off the table. This results in more guaranteed revenue for the project, thus allowing the project to finance a greater portion of its capital costs.

Although the PRS counterparty is comfortable taking price risk and wind risk, it does not take operations or basis risk—those stay with the project. In oversimplified terms, operations risk is the risk that the project will not convert wind into electricity as efficiently as expected due to operational issues such as turbine maintenance. Basis risk is the risk that the electricity price at the “hub”—where electricity is traded on the spot market—will be less than the electricity price at the actual  location, or “node,” where the electricity enters the grid. (Basis is a complicated topic beyond the scope of this article, but the most common reason for differences in hub and node prices is inadequate transmission.)

Putting the PRS to the Test

The novelty and complexity of the PRS came into focus when Apex began the financing process. Investors tend to prefer projects and concepts that are well understood—no one wants to lend money on the basis of a new product that turns out to be fundamentally flawed. For this reason, each of the sponsor equity, debt, and tax equity investors undertook a detailed review of the PRS and insisted on being fully satisfied with its risk profile prior to funding. Unlike the vast majority of their investments, the investors had no previous experience with this product; they had to learn everything from scratch. The detailed review included analysis by multiple independent engineers, consultants, and law firms, as well as the investors’ in-house legal, accounting, and engineering teams.

This painstaking due diligence process placed a substantial burden on Apex. Many of my colleagues in the asset management, power marketing, resource assessment, and legal departments will recall a seemingly endless series of conference calls to explain how the PRS works and to structure the transaction to fit the needs of the investors. All of this was in service of helping five different investors complete their diligence and commit their share of roughly $330 million in capital costs. At the end of the process, our financing efforts were successful, and the Cotton Plains Wind, Old Settler Wind, and Phantom Solar projects are now under construction.

Benefits of the PRS

A long-term power purchase agreement (PPA) with an investment-grade counterparty remains the gold-standard revenue option for financing a wind project. Apex’s power marketing team has been actively searching for alternative revenue sources capable of standing up to the scrutiny of the financing process. Apex successfully closing on the financing for the trio of Texas projects in July 2016 demonstrates that the PRS fits this mold.

In fact, the PRS has already become a powerful asset in our power marketing toolbox. Shortly after closing on the hybrid portfolio, we successfully incorporated a PRS for a portion of the generation at our Grant Plains Wind project in Oklahoma, which closed in August and is currently under construction.

And Apex is now actively modeling the PRS at many of our other projects. We believe the PRS will remain a viable path to market complementing traditional PPAs and financial hedges, and we expect the PRS financing process to become smoother as we apply the lessons learned from these recent projects.

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Microsoft collaborates with Capital Power and Allianz Risk Transfer to buy clean power from Bloom Wind Farm – in connection with the project’s existing Proxy Revenue Swap.

REDMOND, Wash. — Nov. 14, 2016 — On Monday, Microsoft Corp. announced its largest purchase of wind energy to date with the signing of two agreements. Combined, these agreements represent 237 megawatts of wind energy, which brings Microsoft’s total investment in wind energy projects in the U.S. to more than 500 megawatts.

“Microsoft is committed to building a responsible cloud, and these agreements represent progress toward our goal of improving the energy mix at our datacenters,” said Brad Smith, president and chief legal officer at Microsoft. “Our commitment extends beyond greening our own operations because these projects help create a greener, more reliable grid in the communities in which we operate.”

Microsoft has contracted with Allianz Risk Transfer (ART) to fix its long-term energy costs and purchase the environmental attributes connected with the new, 178-megawatt Bloom Wind project in Kansas. The project is the first to use a novel structure developed by ART and designed to offset high upfront costs associated with the creation of large-scale wind projects. Microsoft is the first buyer to participate in this structure, which has the potential to bring clean energy projects online at a faster pace.

“It is important for investors in renewable energy projects to secure long-term, stable revenues, and our structure does just that,” said Karsten Berlage, managing director of ART. “We are thrilled to be partnering with Microsoft on this groundbreaking project.”

In addition, Microsoft has contracted with Black Hills Corp. subsidiary Black Hills Energy, under a long-term agreement, to purchase 59 megawatts of renewable energy certificates from the Happy Jack and Silver Sage wind projects, which are adjacent to Microsoft’s Cheyenne, Wyoming, datacenter. The combined output of the Bloom and Happy Jack/Silver Sage projects will produce enough energy on an annual basis to cover the annual energy used at the datacenter.

“Our longstanding partnership with Microsoft productively led to this landmark collaboration. This collaboration provided them the opportunity to utilize significantly more renewable energy while still ensuring the reliability they’ve come to expect through our energy infrastructure and generation resources,” said David R. Emery, chairman and CEO of Black Hills Corp. “We are proud to be a strong supporter and partner in their mission to power their datacenters with increased renewable energy resources, and look forward to our continued collaboration in the years ahead.”

Microsoft and Black Hills Energy also worked together to create a new tariff, available to all eligible customers, that allows the utility to tap the local datacenter’s backup generators, thereby eliminating the need for Black Hills Energy to construct a new power plant. The tariff received approval from the Wyoming Public Service Commission in July.

“We are constantly looking for new ways to approach energy challenges and avenues of engagement with our utility partners,” said Christian Belady, general manager of cloud infrastructure strategy and architecture at Microsoft. “The team worked closely with ART to come up with a completely new model to enable faster adoption of renewables. Likewise, the tight engagement with Black Hills created the opportunity for Microsoft’s datacenter to become an asset for the local grid, maintaining reliability and reducing costs for ratepayers. This kind of deep collaboration with utilities has great potential to accelerate the pace of clean energy, benefitting all customers — not just Microsoft.”

These are Microsoft’s third and fourth wind energy agreements, joining the 175-megawatt Pilot Hill wind project in Illinois and 110-megawatt Keechi wind project in Texas. In March, Microsoft also signed an agreement with the Commonwealth of Virginia and Dominion Energy Inc. to bring 20 megawatts of solar energy onto the grid in Virginia. These projects are in addition to the renewable and carbon-free energy Microsoft purchases from the grid mix in the markets in which it operates.

More information about this announcement is in the Microsoft on the Issues blog post by Microsoft President and Chief Legal Officer Brad Smith.

About Allianz Risk Transfer

Allianz Risk Transfer (ART) is the center of competence for alternative risk transfer business within the Allianz Group offering tailor-made insurance, reinsurance and other non-traditional risk management solutions to industrial and financial clients worldwide. Founded in June 1997, the company is a wholly-owned subsidiary of Allianz Global Corporate & Specialty SE. ART operates through affiliated companies with offices in Amsterdam, Bermuda, Dubai, Liechtenstein, London, New York and Zurich. Its client base spans across all industry sectors and its solutions are most effective for clients facing unusual or complex risks, where traditional (re)insurance or financial products are inadequate. As of today, ART AG is rated AA- by Standard & Poor’s and A+ by A.M. Best. www.art.allianz.com

About Black Hills Corp.

Black Hills Corp. (NYSE: BKH) is a customer-focused, growth-oriented utility company with a tradition of improving life with energy and a vision to be the energy partner of choice. Based in Rapid City, South Dakota, the company serves 1.2 million natural gas and electric utility customers in eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The company also generates wholesale electricity and produces natural gas, oil and coal. More information is available at www.blackhillscorp.com.

About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more. 

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at https://news.microsoft.com/microsoft-public-relations-contacts.

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