Sempra U.S. Gas & Power, a subsidiary of
) and BP Wind Energy, a unit of
), announced that their Auwahi Wind facility on Maui has come
online and has started to provide commercial operation. The
project includes eight new
) wind turbines.
Located on the southeast ridge of the Haleakala volcano at
Ulupalakua Ranch, the power project has an electric generation
capacity of 21 megawatt ("MW"). In May 2012, Sempra and BP Wind
had teamed up to develop the wind farm. Post-completion, Sempra
will operate the project.
An important feature of this project is its 10 MW battery with a
capacity of storing 4.4 megawatt-hours of power. The battery
allows MECO grid to regulate and sustain power even when the wind
is low. Under a 20-year agreement, the power generated from the
Auwahi Wind facility will be sold to Maui Electric Company
(MECO), a subsidiary of
Hawaiian Electric Industries Inc.
). The clean electricity generated will be sufficient to power
Currently, under a strategic partnership between the two
companies, more than 1GW of wind generating capacity is in
operation or under construction in the U.S. Projects under
construction include the 419MW Flat Ridge 2 wind farm in Kansas
and the 141MW Mehoopany wind farm in Pennsylvania.
The project will help Hawaii to achieve its goal of securing 40%
of its energy from renewable sources by 2030. Besides assisting
other states in procuring renewable energy, the company itself is
also moving toward more renewable energy resources. On one hand,
the company is providing renewable energy with its wind farms
while it is buying solar energy on the other. Recently, it
clinched two deals with Diverse Business Enterprise ("DBE")
entities to purchase 40 MW of renewable power to supply its
customers in Imperial Valley, California.
The first contract includes a 20-year deal to procure 20 MW of
solar power from the Seville solar facility, a joint venture
initiative with Sempra's DBE associate Tallbear Seville and
Regenerate Power. The facility is located northwest of Brawley in
Imperial County and consists of photovoltaic single-axis modules.
The second 20-year agreement entails Sempra to purchase 20 MW of
solar output generated from the Calipatria Solar Farm, which is a
fixed-tilt photovoltaic facility also located in Imperial Valley.
The project is a partnership between 8minutenergy Renewables'
ancillary, 70SM1 8ME, LLC and Gestamp Solar. The twin projects
are scheduled to be completed in 2015 and will deliver power via
its 117-mile Sunrise Powerlink transmission line.
Sempra Energy is a southern California-based energy services
holding company involved in the sale, distribution, storage, and
transportation of electricity and natural gas. The company's
businesses are broadly divided into Sempra Utilities, Sempra
International and Sempra U.S. Gas & Power.
Sempra's geographic disparity in its assets frees the company
from any region specific risk. Key growth drivers for the company
include stable utility earnings, steady progress at its LNG
terminals, renewable power projects in the Pacific Southwest, the
Sunrise Powerlink transmission line and ongoing installations of
However, we are concerned due to a lack of any near-term positive
triggers, along with near-term trepidation in natural gas prices
and pending regulatory cases. The company presently retains a
short-term Zacks #3 Rank (Hold) that corresponds with our
long-term Neutral recommendation on the stock.
BP PLC (BP): Free Stock Analysis Report
HAWAIIAN ELEC (HE): Free Stock Analysis
SIEMENS AG-ADR (SI): Free Stock Analysis
SEMPRA ENERGY (SRE): Free Stock Analysis
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