Sempra Acquires Hawaii Wind Power Project

Sempra Generation, a subsidiary of Sempra Energy (NYSE: SRE), has acquired Auwahi Wind Energy LLC, a company developing a 22-megawatt (MW) wind energy and battery storage project in Maui, Hawaii, from Shell WindEnergy Inc., a subsidiary of Royal Dutch Shell (NYSE: RDS-B).

The proposed Auwahi Wind Energy project could begin construction in 2011 and commence commercial operations in 2012 on the Ulapalakua Ranch in the remote southeastern region of Maui.

Terms of the agreement were not disclosed.

"Consistent with our growing renewable presence in the southwestern United States, this project further expands Sempra Generation’s footprint in one of the fastest growing renewable energy markets while further advancing the sustainability goals of Maui and the state of Hawaii," said Michael W. Allman, president and CEO of Sempra Generation.

An important component of the Maui wind-power project is the development of a battery energy storage unit. The battery could store as much as 28 megawatt-hours (MWh) of wind energy generated by the project’s windmills during the typically windy morning and night hours. The battery power could be stored until late afternoon, when electricity consumption typically reaches its peak, or could be utilized to regulate and smooth intermittent wind power, providing a valuable source of grid stability for Maui Electric.

Sempra Generation recently submitted a proposal to the U.S. Department of Energy to co-fund costs associated with an expansion of the battery energy storage facility to 72 MWh.

The integrated wind and battery energy storage project could serve as a prototype to help maximize the energy output of other wind power projects in Hawaii and throughout the world.

"Shell WindEnergy Inc. has re-assessed its wind development efforts in Hawaii and will concentrate on projects on the U.S. Mainland and Canada that are more aligned with our strategic direction," said Dick Williams, president of Shell WindEnergy Inc. "Our portfolio consists of eight wind farms on the U.S. Mainland with a total capacity of almost 900 megawatts."

The project would help Maui attain its goal of achieving 95% of its electricity from renewable sources by 2020.

In 2008, the state of Hawaii and the U.S. Department of Energy set goals associated with the state’s Clean Energy Initiative. The goal of the initiative is to increase power conservation and help lower the almost exclusive use of oil for island power generation by accelerating the development of renewable, indigenous energy resources in Hawaii, such as Auwahi Wind. This goal involves employing efficiency and renewable energy resources that meet 70% of Hawaii’s energy demand by 2030.

Sempra Generation has several wind and solar energy projects underway. The company recently announced its 50-50 investment with BP Wind in the second phase of the Fowler Ridge Wind Farm, the Midwest’s largest wind power project. The 200-MW Benton County, Ind., facility is slated for completion in 2010.

Another Sempra Generation wind project slated for completion in 2012 is Energía Sierra Juárez. In its first phase, the wind farm will generate between approximately 100 MW to 125 MW of power from turbines to be installed about 70 miles southeast of San Diego in Baja California, Mexico. Potential future phases of Energía Sierra Juárez could grow to generate as much as 1,000 MW of clean wind energy.

In 2008, Sempra Generation completed the construction of North America’s largest thin-film solar power plant, El Dorado Solar. The plant is located near Las Vegas and is capable of generating 10 MW of solar energy. El Dorado Solar’s output is fully contracted for 20 years. A new 48-MW solar project, located adjacent to El Dorado Solar, is planned and fully contracted pending a decision by the California Public Utilities Commission.