Ares Management Corp, NYSE: ARES, acquired a portfolio of three wind farms located in West Texas from BP in Dec 2018. The wind farms total 366MW of generating capacity.
Ares acquired the properties with the intent of repowering the wind farms via the establishment of Phoenix Wind Repower, LLC.
Wind repowering enables owners to retrofit power plants on existing sites with new and/or refurbished technology, including erecting taller, more efficient wind turbines to increase productivity. Repowered projects can often gain further cost-saving advantages, relative to new greenfield (or vacant-lot) developments, by using existing grid connections and infrastructure.
Owners of wind energy facilities have the opportunity to repower wind farms that are past or approaching the end of their 10-year production tax credit (“PTC”) period.
Repowering involves replacing components of wind turbine generators with new technology resulting in increased output and efficiencies. −Complete vs. partial repowers.
Facilities are considered placed in service anew, restarting the 10-year PTC period if the cost of the new property is 80% or more of the sum of the cost of the new property and the fair market value of the used property (“80-20 Rule”).
In May 2019, Ares announced the sale of a 49.9% in Phoenix Wind Repower to UBS Asset Management. (UBS-AM)
Tommaso Albanese, Head of Infrastructure, UBS Asset Management, says: “Phoenix Wind is a highly attractive investment opportunity given the project’s ability to deliver reliable income streams, its long-term environmental contribution and the expertise of our partner, Ares. This unique asset is aligned with our strategy of providing clients with access to diversified, mid-market infrastructure investments in developed economies across the globe, whilst being at the forefront of the technological advancements transforming the renewables sector.”
Keith Derman, Partner of Ares and Co-Head of Ares Infrastructure and Power, says: “We are excited to partner with UBS-AM on Phoenix Wind – another project that fits our longstanding investment strategy of applying our structuring, construction and operational expertise to add value to a critical source of renewable energy, attract high-quality partners and ultimately deliver returns for our investors. Phoenix Wind features a first-of-its-kind repowering, and we are proud that an investor of UBS’ caliber recognizes our value-add capabilities.” Keith Derman | Ares Management (aresmgmt.com)
Generation Graphs of the Wind Farms are located below
Sherbino II Wind Farm Net Generation (MwH)
Average Monthly Capacity Factor pre-repowering:(30%)
Dec 2017-Dec 2020 Average Monthly Capacity Factor: (16%)
Map of Sherbino II Wind Farm with Transmission Lines
Using Turbine Hub.com
Silver Star I Wind Farm Net Generation (MwH)
Average Monthly Capacity Factor pre-repowering: (35%)
Dec 2017-Dec 2020 Average Monthly Capacity Factor: (20%)
Map of Silver Star I Wind Farm with Transmission Lines
Using Turbine Hub.com
Trinity Hills Wind Farm Net Generation (MwH)
Average Monthly Capacity Factor pre-repowering: (30%)
Average Monthly Capacity Factor post-repowering: (47%)
Satellite Imagery of Trinity Hills Wind Farm Repower in progress