California Wind Company Plans IPO
Pattern Energy, a wind and transmission company with two major projects in California, is planning to go public. The San Francisco-based company has informed the Securities and Exchange Commission of its intent to hold an Initial Public Offering (IPO) "as soon as is practicable." But do the numbers work out?
Pattern owns a number of wind power facilities in the Americas, but the ones most likely to be familiar to ReWire readers are the 101.2 megawatt Hatchet Ridge Wind Farm in the Shasta County town of Burney, near Mount Shasta, and the controversial 315-megawatt Ocotillo Express Wind facility in western Imperial County near the town of Ocotillo.
Pattern also owns the 152-megawatt Spring Valley wind installation near Ely, Nevada, in the news recently due to eagle mortality there.
As ReWire's pal Pete Danko points out over at greentechmedia, companies filing IPOs are required by law to detail potential risks to their would-be investors, and Pattern's declarations of risk are interesting to wildlife watchers, including phrases like:
If our projects do not comply with applicable laws, regulations or permit requirements, we may be required to pay penalties or fines or curtail or cease operations of the affected projects. Violations of environmental and other laws, regulations and permit requirements, including certain violations of laws protecting wetlands, migratory birds, bald and golden eagles and threatened or endangered species, may also result in criminal sanctions or injunctions.
It's boilerplate crafted by an attorney and not a wildlife biologist, but it's interesting.
Even more interesting is Danko's numbercrunching at Greentechmedia with regard to Pattern's income projections:
Pattern expects to sell 2,422,600 megawatt-hours of electricity this year at an average price of $86/MWh. That's with 828 megawatts operating, although later in the year, another 42 megawatts will go on-line at the Ocotillo plant in California. So that's a capacity factor of around 33 percent.
As we explain in the info box above, "capacity factor" is the percentage of a generator's theoretical maximum possible output that actually gets put out in the real world. A 1-megawatt wind turbine in perfect conditions would operate at full capacity 24/7, putting out 24 megawatt-hours a day and 168 megawatt-hours a week. But that assumes the wind blows at a perfect speed non-stop, and that turbines never go down for maintenance. In the real world, the wind stops blowing sometimes, and turbines break down and need reppair and maintenance.
Ironically, both those conditions hold at Pattern''s Ocotillo Express Wind facility. Wind speeds have been reported to be far below what Pattern had hoped, and a blade throw in May shut the entire project down for weeks.
Given that all of Germany's wind turbine fleet enjoyed a 2012 capacity factor about half what Pattern is claiming to expect, it will be interesting to see what financial analysts make of Pattern's IPO bid.