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Released August 13, 2018 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Pattern Energy Group (NASDAQ:PEGI) (San Francisco, California) benefited from new capacity and recent acquisitions in second-quarter 2018, while odds improved for a major wind-energy project in New Mexico. Industrial Info is tracking $4.25 billion in active projects involving Pattern, more than $1.5 billion of which are set for Texas or Louisiana.
Click on the image at right for a graph detailing active Pattern projects, by U.S. state or Canadian province.
One of Pattern's early-phase projects got a boost earlier this month when the company announced it has signed 15-year power purchase agreements (PPAs) with Silicon Valley Clean Energy (SVCE) and Monterey Bay Community Power (MBCP) to supply energy from the proposed, $200 million Duran Mesa Wind project near Corona, New Mexico. SVCE signed a 15-year PPA for 110 MW, while MBCP signed a 15-year PPA for 90 MW. The Duran Mesa project remains in its planning phase, where plenty of factors can increase, reduce or eliminate the projected spending. For more information, see Industrial Info's project report.
"It's a very positive sign for our industry that these two important public agencies are making their first long-term wind power purchase agreements," said Mike Garland, the chief executive officer of Pattern Development, in a press release accompanying the announcement. "We are making strong progress on our extensive development projects in New Mexico, where the wind resource is one of the strongest in the country and ... an ideal complement to California solar power. These contracts will increase Pattern Development's contribution to California climate goals to well over a gigawatt of wind energy serving California customers."
The Duran Mesa project is part of Pattern Development's 2,200-MW Corona Wind program in New Mexico. The program includes the $330 million Grady Wind Facility in Clovis, which is under construction and is expected to generate 220.8 MW from 96 turbines, also to be sold to California customers. The Grady Wind Facility is expected to wrap up in the first quarter of 2019, as is a related 34.5-kilovolt, $12 million substation, also in Clovis. For more information, see Industrial Info's reports on the Grady Wind Facility and substation.
Pattern is facing steeper challenges in neighboring West Texas, where transmission development has not always kept pace with the rapid construction of renewable-energy facilities, creating congestion problems in the Electric Reliability Council of Texas (ERCOT) service area. Pattern has been struggling to get its proposed Southern Cross Transmission Project off the ground, in an effort to link wind-energy facilities in the area to the grid and customers in the Southeastern U.S., but has faced years of setbacks.
The project's largest component, an estimated $1 billion, high-voltage direct current (HVDC) transmission line with a base-load capacity of 2,000 MW, has been mired in permitting and site-selection processes since 2015. For more information, see Industrial Info's project report.
Pattern also is evaluating the proposed, $330 million Panhandle Wind Project Phase III expansion in Panhandle, Texas, which would generate 200 MW from 87 turbines. The first two phases of the project began operations in 2014 and have a total capacity of 400 MW. For more information, see Industrial Info's project report.
"Our two primary operating challenges are congestion in ERCOT and returning to full operations in Puerto Rico," Garland said in an earnings-related conference call. "In the Panhandle of Texas, we continue to be affected by the overbuild situation and transmission repairs, which create a few challenges--the prime ones being higher-basis costs and low spot prices, which lower our revenues for the projects in that region." He added that "some progress is being made" on congestion issues in the region, but "we do not think it will be resolved soon."
Hurricane Maria's devastation of Puerto Rico curtailed output at Pattern's Santa Isabel Windfarm, which has a capacity of 101.2 MW. This affected Pattern's profits for the quarter, as did increased transmission costs following recent acquisitions, and increased interest and liabilities payments. For more information, see Industrial Info's plant profile.
For second-quarter 2018, Pattern reported a net loss of $1.78 million, compared with a net loss of $14.68 million in the same period last year; the improvement was driven in part by new capacity at existing facilities. During the second quarter, the company entered the Japanese market by taking ownership of operational solar assets from renewables developer Green Power Investment, in which Pattern owns a majority stake. Pattern is looking to further expansions into the solar market in coming years.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Click on the image at right for a graph detailing active Pattern projects, by U.S. state or Canadian province.One of Pattern's early-phase projects got a boost earlier this month when the company announced it has signed 15-year power purchase agreements (PPAs) with Silicon Valley Clean Energy (SVCE) and Monterey Bay Community Power (MBCP) to supply energy from the proposed, $200 million Duran Mesa Wind project near Corona, New Mexico. SVCE signed a 15-year PPA for 110 MW, while MBCP signed a 15-year PPA for 90 MW. The Duran Mesa project remains in its planning phase, where plenty of factors can increase, reduce or eliminate the projected spending. For more information, see Industrial Info's project report.
"It's a very positive sign for our industry that these two important public agencies are making their first long-term wind power purchase agreements," said Mike Garland, the chief executive officer of Pattern Development, in a press release accompanying the announcement. "We are making strong progress on our extensive development projects in New Mexico, where the wind resource is one of the strongest in the country and ... an ideal complement to California solar power. These contracts will increase Pattern Development's contribution to California climate goals to well over a gigawatt of wind energy serving California customers."
The Duran Mesa project is part of Pattern Development's 2,200-MW Corona Wind program in New Mexico. The program includes the $330 million Grady Wind Facility in Clovis, which is under construction and is expected to generate 220.8 MW from 96 turbines, also to be sold to California customers. The Grady Wind Facility is expected to wrap up in the first quarter of 2019, as is a related 34.5-kilovolt, $12 million substation, also in Clovis. For more information, see Industrial Info's reports on the Grady Wind Facility and substation.
Pattern is facing steeper challenges in neighboring West Texas, where transmission development has not always kept pace with the rapid construction of renewable-energy facilities, creating congestion problems in the Electric Reliability Council of Texas (ERCOT) service area. Pattern has been struggling to get its proposed Southern Cross Transmission Project off the ground, in an effort to link wind-energy facilities in the area to the grid and customers in the Southeastern U.S., but has faced years of setbacks.
The project's largest component, an estimated $1 billion, high-voltage direct current (HVDC) transmission line with a base-load capacity of 2,000 MW, has been mired in permitting and site-selection processes since 2015. For more information, see Industrial Info's project report.
Pattern also is evaluating the proposed, $330 million Panhandle Wind Project Phase III expansion in Panhandle, Texas, which would generate 200 MW from 87 turbines. The first two phases of the project began operations in 2014 and have a total capacity of 400 MW. For more information, see Industrial Info's project report.
"Our two primary operating challenges are congestion in ERCOT and returning to full operations in Puerto Rico," Garland said in an earnings-related conference call. "In the Panhandle of Texas, we continue to be affected by the overbuild situation and transmission repairs, which create a few challenges--the prime ones being higher-basis costs and low spot prices, which lower our revenues for the projects in that region." He added that "some progress is being made" on congestion issues in the region, but "we do not think it will be resolved soon."
Hurricane Maria's devastation of Puerto Rico curtailed output at Pattern's Santa Isabel Windfarm, which has a capacity of 101.2 MW. This affected Pattern's profits for the quarter, as did increased transmission costs following recent acquisitions, and increased interest and liabilities payments. For more information, see Industrial Info's plant profile.
For second-quarter 2018, Pattern reported a net loss of $1.78 million, compared with a net loss of $14.68 million in the same period last year; the improvement was driven in part by new capacity at existing facilities. During the second quarter, the company entered the Japanese market by taking ownership of operational solar assets from renewables developer Green Power Investment, in which Pattern owns a majority stake. Pattern is looking to further expansions into the solar market in coming years.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
