Wind Energy

Orrick, Herrington & Sutcliffe LLP's experience as counsel in the wind power sector is virtually unparalleled.  Since the early 1980s in the pioneering days of wind energy in California, Orrick has been active in the development and financing of wind projects.  In fact, in the late 1980s our lawyers represented the sponsors of a 160 MW undertaking, the largest wind project developed in the United States at that time and the first to be financed institutionally.

In Europe, our involvement began with early movers in the industry, serving as counsel to sponsors of the very early wind projects in the United Kingdom, Italy, Spain and Greece, including an Italian project that was then the largest project financed worldwide.  Today, Orrick is active in the early stage development of wind energy in Japan and we are also advising on many projects now underway in the United States and Europe.  We served as counsel to the sponsor of two projects in Spain that Project Finance recognized as the "European Renewables Deal of the Year" for 2003.

For the last 25 years, Orrick has addressed every aspect of the wind business and has represented nearly every player in the industry.  Whether the issues relate to power contracts, transmission interconnection, government permitting and regulations, real estate, equipment supply and performance, construction, tax structuring, or debt and equity financing, Orrick lawyers bring a wealth of knowledge and experience.

Our track record in the development of wind energy projects hinges on a sophisticated knowledge of project development and finance techniques, the energy industry and wind power projects in particular, as well as of available tax incentives and regulatory issues.

The firm's Wind Energy Group comprises more than 20 lawyers located across our U.S. offices, as well as in London, Milan, Rome, Paris and Tokyo.  Collectively, the group provides advice under U.S., English, European Union, French, German, Italian and Japanese law.  Our lawyers have significant experience developing and financing wind power projects all over the world, and they routinely draw upon the experience of members of the firm's securitization, real estate, bankruptcy, regulatory, environmental and litigation practices when handling such matters.

Wind Power Grows Globally

United States.  In the United States, the move to environmentally friendly power production is strong, leading to development of larger wind farms around the country.  Improvements in technology and falling equipment costs, combined with continuing availability of the production tax credit ("PTC") and other financial incentives, make wind power fully competitive with fossil-fueled power generation.  In 2006 alone, U.S. wind power capacity increased 27 percent, bringing total installed wind capacity in the United States to nearly 11,603 MW.  With the renewal of the PTC, we expect the U.S. market will remain robust as the emphasis on "green power" grows, fueled by high fossil fuel costs and increasing concerns about global warming.

Europe and Asia.  In Europe, prospects for continued growth of wind power are very favorable. The European Union set the goal of obtaining 40,000 MW of power from wind sources by 2010, and according to the American Wind Energy Association, they achieved this goal in 2005, five years ahead of time.  Wind power now supplies approximately three percent of the European Union's total electricity consumption in a given year.  To achieve this goal, a number of countries have adopted laws with minimum price guarantees for wind-generated electricity.  Europe, Germany, Spain and Denmark collectively account for a majority of European wind capacity.  The United Kingdom, with approximately 1,000 MW, is gearing up development of onshore and offshore projects with wind capacity expected to reach 1,500 MW soon.  Japan and other countries in Asia will also provide areas of growth for wind development projects as commitments to increase the proportion of energyfrom renewable sources continue.

Financing availability is only one factor in wind power development.  Other issues, including technology risk, grid interconnection issues, wind resource analysis, permitting difficulties and transaction costs all play a contributing role.  Each is important in advancing a wind power project, especially as projects are developed with new technologies and in new locations, including offshore.

Project Finance and Other Transactions

Because the electrical output of wind energy projects varies significantly depending on wind speed, and many wind projects are small compared to fossil-fired projects, arranging cost-effective financing is particularly challenging.  Orrick's extensive wind power experience has led us to help develop and become familiar with innovative finance solutions.  These solutions include hybrid-financing structures drawing on securitization techniques and investment structures attractive to investors who are unfamiliar with wind energy projects.  The future of project financing in the wind industry lies in broadening the traditional project-financing paradigm to include structures and techniques that lower overall transaction costs and adapt the terms of the financing to satisfy the requirements of debt and equity participants.

Orrick has also been involved in the acquisition and repowering of existing projects that aggregate to a larger project for financing purposes.  Today, significant buying and selling opportunities exist for wind power projects as numerous new players enter the market and existing participants shift their focus.  New, higher-efficiency turbines, combined with tax and other financial incentives, make acquisition and repowering of projects, as well as development of new projects, attractive.

Selected Wind Energy Engagements

United States

• Portfolio Financings. Lead counsel for the sponsor of a $800 million operational phase financing of a portfolio of six wind projects in California, New Mexico, Illinois and Pennsylvania.
• Infrastructure Fund Transfers. Representing the seller in transfers of interests in U.S. wind projects to a publicly traded Australian infrastructure fund.
• GSG. Representing the sponsor in the acquisition, development and construction financing of a 80 MW wind project in Illinois.
• Hawkeye Power. Turbine supply and construction arrangements for an Iowa wind project.
• Buena Vista. Representing the sponsor in the development and construction financing of a 38 MW wind project repowering in California.
• White Creek. Represented the purchaser/borrower in a project finance loan, a portion of which was used to acquire a 205 MW wind project.
• SeaWest. Represented the purchaser in the acquisition of a U.S. wind energy company.
• Kumeyaay.  Representing the sponsor in the development of this 50 MW wind project in California
• Kaheawa.  Project financing worth $70 million of a 30 MW wind power project in Hawaii.
• Mount Storm.  Representing a sponsor in its sale of this 150 MW wind project that is in late-stage development.
• Combine Hills.  Development and financing of a 41 MW wind power facility in Oregon.
• Crescent Ridge.  Development of a 50 MW wind power facility in Illinois.
• Cabazon Pass.  Development, financing and sale of a 41 MW wind power facility in the San Gorgonio Pass near Palm Springs, California.
• Whitewater Hill.  Development and sale of a 60 MW wind power facility in the San Gorgonio Pass near Palm Springs, California.
• Peetz Table.  Subordinated debt financing of a 30 MW wind energy facility in Colorado.
• Foote Creek I. Equity financing of a 41 MW wind power project in Wyoming.
• Pacific Crest Power.  Turbine supply, construction arrangements and interim financing for a 46.8 MW wind project in California.
• Cameron Ridge.  Turbine supply, construction arrangements and interim financing for a 56 MW wind project in California.
• Hawkeye Power.  Turbine supply and construction arrangements for an Iowa wind project.
• Mojave 89.  Development and leveraged lease financing of an 85 MW wind project in California.
• Mojave 90.  Development and leveraged lease financing of a 75 MW wind project in California.
• Mojave 89 Acquisition.  Acquisition of Mojave 89 Project from the lessor and project syndicate lenders.
• Mojave 89 Repower Project.  Repowering of 30 MW of Mojave 89 Project.
• Toyo West II (Sagebrush).  Development and financing of a 220 kV 46-mile transmission line.
• Morewind.  Acquisition and repowering of a 29 MW wind energy project in California, including the sale of a 50 percent interest in the repowered project to an investor.
  

Italy

• Italian Vento Power Corporation.  Development, construction and permanent financing of a 169.2 MW wind project in Campania and Puglia.

Spain

• EuroVento.  Nonrecourse term-loan financing for the sponsor of two 201 MW wind projects located in Asturias and Galicia, Spain.
• Asturias.  Development and financing of a 50 MW wind energy project in Asturias.
• Paxareiras I and IIa.  Development and financing of 39.6 MW wind energy project in Galicia.
• Paxareiras IIb.  Development and financing of a 21.6 MW wind energy project in Galicia.
• Paxareiras IIc and f.  Development and financing of a 43.8 MW wind energy project in Galicia.
• Paxareiras IId and IIe.  Development and financing of a 34.8 MW wind energy project in Galicia.
• Paxareiras IIf.  Development and financing of a 9.1 MW wind energy project in Galicia.
• PEBSA.  Financing of a 29.04 MW wind energy project in Galicia.
• Vicedo.  Development and financing of a 24.6 MW wind energy project in Galicia.

United Kingdom

• P&L.  Financing of a 12 MW wind energy project in Wales.
• RYG.  Financing of a 7.6 MW wind energy project in Wales.

Greece

• Peloponnese, Phase I.  Development of a 48 MW wind project in Greece.

Japan

• Enbetsu.  Development and financing of a 3 MW wind power project in Hokkaido.
• Hamatonbetsu.  Development and financing of a 3 MW wind power project in Hokkaido.
• Iwaya.  Development and financing of a 32.5 MW wind power project in Aomori.
• Shikkari.  Development and financing of a 20 MW wind power project in Aomori.
• Tomamae.  Development and financing of a 20 MW wind power project near Hokkaido.