Maintaining momentum in its renewable energy investing, GE Energy Financial Services, a unit of GE, announced February 16 it had made an equity investment in a wind farm CPV Renewable Energy Company is developing in Oklahoma.
GE Energy Financial Services is making a $65 million preferred equity investment to fund construction of the CPV Keenan II wind farm, with an option to invest $100 million more in partnership equity upon commencement of commercial operations. CPV Renewable Energy Company – an affiliate of Competitive Power Ventures Inc. – plans to begin construction this month of the 152-megawatt wind farm, 12 miles southwest of Woodward, Oklahoma. The project is scheduled for completion by year’s end.
The project, estimated to cost $319 million, will also be financed with a $212 million senior secured credit facility jointly arranged by The Bank of Tokyo-Mitsubishi and Union Bank. Participating in the lending syndicate are The Bank of Tokyo-Mitsubishi, Union Bank, Key Bank, Helaba, LBBW, Natixis and Rabo Bank. The project has secured a 20-year power purchase agreement with Oklahoma Gas & Electric Company. It is expected to generate enough electricity to power approximately 45,000 average Oklahoma homes and – according to U.S. Environmental Protection Agency methodology – avoid approximately 413,000 short tons a year in greenhouse gas emissions, the equivalent of taking nearly 72,000 cars off the road. The project is expected to receive a production tax credit, a federal government incentive in the form of an income tax credit for each kilowatt-hour of electricity produced for the first 10 years of operations.
“CPV REC is focused on building a bridge to a better energy future through the development of leading-edge projects like Keenan II and working with forward-looking companies like GE,” said Sean Finnerty, CPV REC senior vice president.
Wind comprises nearly 80 percent of GE Energy Financial Services’ renewable energy portfolio. The portfolio includes equity investments in 47 wind farms with a total capacity to produce 6 gigawatts of electricity, as well as loans to 36 wind farms totaling 1.3 gigawatts.
GE Energy Financial Services’ renewable energy investments reinforce GE’s ecomagination initiative, a program to help its customers meet their environmental challenges while expanding its own portfolio of cleaner energy products.
GE Energy Financial Services' renewable energy investments have helped 20 states meet their renewable portfolio standards, regulations requiring increased electricity generation from renewable sources.
“Coupling our private investments with government incentives such as state renewable portfolio standards and federal grant and loan programs has proven to be a powerful driver of renewable energy and job creation in the United States,” said Kevin Walsh, managing director and head of Power and Renewable Energy at GE Energy Financial Services. “It’s exciting to imagine how much more quickly the country could reap these benefits if the US government adopted a strong national renewable electricity standard, and extended and streamlined the U.S. Treasury grant and US Energy Department loan guarantee renewable energy programs.”
A study the Renewable Electricity Standard Alliance for Jobs released this month estimates that setting a strong, near-term federal target requiring that 25 percent of US electricity be generated from renewable sources by 2025 would support the creation of 274,000 American renewable energy jobs. This target would complement efforts to reduce U.S. greenhouses gases by 17 percent by 2020.