Avangrid Sells Kitty Hawk North, Saudi Arabia Localizes Towers

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.