Avangrid Sells Kitty Hawk North, Saudi Arabia Localizes Towers

The Uptime Wind Energy Podcast

This week on Uptime News Flash, Avangrid sells the Kitty Hawk North lease area to Dominion Energy. In Saudia Arabia, the government signed two major localization agreements for wind energy steel towers. And Enerjisa Üretim has secured a major 1 billion 10 year term loan for the development of the YEKA 2 wind power plant.

Welcome to Uptime News Flash. Industry news lightning fast. Your hosts, Allen Hall, Joel Saxum, and Phil Totaro discuss the latest deals, mergers, and alliances that will shape the future of wind power. News Flash is brought to you by Intelstor. For market intelligence that generates revenue, visit www.intelstor.com.

Allen Hall: Well, Phil, Saudi Arabia has taken a significant step forward in its wind energy sector with the signing of two major localization agreements for wind energy steel towers. The agreements were signed by the Kingdom’s Local Content and Government Procurement Authority with Al Yamama Steel Industries and Arabian International Company for Steel Structures.

These deals are part of a large initiative that saw 107 agreements and memorandums of understanding signed during the Energy Localization Forum in Riyadh, valued at approximately 27 billion. I didn’t realize there was that much money in steel towers, Phil, but wow. These agreements are impressive.

Philip Totaro: Yeah, that that’s for all agreements that they sign, not just the steel tower ones to, to clarify for everybody.

But the, the interesting tidbit with this is the fact that, they obviously have a couple of, wind farms now in Saudi Arabia, one that’s operational, one under construction, as well as a demo turbine from GE from, from a few years back. And they’re, they’re at a point where they’re really looking at the future of renewable energy for themselves in, in their domestic market so that they can, have more control over, how much oil they export and, and where they export it to moving forward.

So this gives them another knob to turn if they can use this renewable power for the power generation. Industry instead of leveraging their own oil abundant though it may be, they all recognize that there’s a finite amount. So this is part of their efforts at domestication of part of the industry that they see as, as being an important element for them moving forward.

So much so that their public investment fund has, has, Also made moves in the past to, put money behind renewable ventures in in Europe and Asia and even looking at the United States as well. So, this is them taking a step forward in terms of their renewable energy market.

Joel Saxum: Yeah, Saudi Arabia keeps on basically reinventing itself and, and morphing into something that it wasn’t in the past, which is very interesting. I, for one, I follow the, the Neom project very closely because it’s really interesting to me. So they’re spending a lot of money. I mean, they even went as far as to lure a lot of the PGA players away for their own golf league.

And now they’re setting up with Dana White from the UFC, they’re setting up their own boxing league. So they’re doing a lot of things. They’re taking advantage of, of course, the money they have now to try and build what their economy is for the future. And, they have been a classically oil and gas economy.

And, and that’s where a lot of their sovereign wealth comes from. So they have the capabilities to make large structures and invest in, in, in industry. So going to steel towers for wind makes absolute sense for them.

Allen Hall: Avangrid has successfully closed the sale of its Kitty Hawk North offshore wind lease area to Dominion Energy.

The transaction was completed for 160 million dollars, comprising a lease acquisition payment of 117 million plus development cost reimbursement. While selling the northern section, Avangrade retains ownership of Kitty Hawk South, which has the potential to deliver 2. 4 gigawatts of power to North Carolina, Virginia, and other states and private companies.

Well, Phil, Dominion Energy is now a big player in offshore wind with the Coastal Virginia offshore wind project, and now Kitty Hawk North.

Philip Totaro: Yes, and this is really interesting for Avangard’s sake as well, because it gives them an extra 160 million of which they just recently committed a few million up in Maine.

So it gives them some cash to, to redeploy in other lease areas and, and other development sites that they’ve got on the queue for the United States. They were intending to bid in the Oregon lease auction that also got postponed. So it’s interesting to note that, they, they obviously still went forward with this lease area asset sale to Dominion that has clearly, got their act together when it comes to getting the capital together and necessary for, for building major projects and, and moving forward with with building major projects.

So, Dominion’s off and running, and this gives VonGrid a little bit extra cash so that they can hopefully pursue additional project developments here and, and take the, the U. S. offshore wind sector into, the, the next phase that we’ve all anticipated for a number of years.

Joel Saxum: Yeah, one thing to talk about Dominion here as we follow the offshore wind play in the United States is they’re, they’re quietly getting it done. Down in Virginia. That coastal Virginia offshore wind is one of the largest projects that’s continuously been being built. Hasn’t had any interruptions. They’ve got a lot of steel in the water down there.

They’re, they’re up and running. So Dominion starting to, has having that success. They’re looking to another play just north of them. So they’re keep keeping your assets close. And also doing a build on the success that they’ve had in construction right now. So good for them.

Allen Hall: Enerjisa Üretim has secured a major 1 billion 10 year term loan for the development of the Yeka II wind power plant.

The loan will finance nine wind power projects across three of Turkey’s provinces, with completion targeted for the first quarter of 2026. The loan structure includes an 18 month grace period with six month interval payments extending through 2034. Boy, that’s Getting financing for wind projects in Turkey just got a lot easier, Phil.

Philip Totaro: Well, and so there’s a couple of things that are important and noteworthy with this this deal. First is that, for those that don’t know, Enerjisa is a joint venture between Sibanki Holding, which is a Turkish company, and E. ON, the, the German utility company. And they’ve been doing a lot of project development in Turkey for a number of years.

I forget precisely how many megawatts they own at this point, but it’s it’s over a hundred megawatts. Let’s put it that way. And this, this new finance part of which is actually coming from the U. S. International Development Finance Corporation, which is kind of the upgrade and replacement to our overseas.

Private Investment Corporation, OPIC. So the, the DFC again, the, the International Development Finance Corporation, they have, the opportunity to make investments with different. Companies are in different, projects, including renewable energy of which their, their predecessor company OPEC and the DFC have, have done over the years.

And this actually is, in my mind, a bit of a good sign. Although they could have been investing in, maybe a U. S. based company that wanted to go overseas, but different, different topic. But we talk all the time on the show about how the Chinese government is subsidizing Chinese companies in their foreign investments and through their Belt and Road Initiative and other subsidies they receive.

This is the U. S. government getting out their wallet and supporting at least a company that, to Energisa’s credit, they, they do source turbines from Germany’s Enercon and Nordex Essiona. So, the, we’re, we’re at least not contributing to China’s growth in the Turkish market with, with this investment, but.

Besides the, the DFC you’ve got J. P. Morgan HSBC, KFW, IPEX from Germany, the German Investment Corporation Act Bank which is Tur Turkish bank and pro Parco who have also invested in this. So, this, billion dollar fund for, for 750 megawatts is, is a great thing that they’re gonna be able to, to deploy that capital for.

Building additional wind energy capacity in, in Turkey.