Project Development, Wind Power

Wind Power is Breaking Down International Border Barriers

In an important “model of collaboration” between the U.S. and Mexico, the first ever cross-border wind farm has been officially inaugurated in Tecate, Baja California. Customers of San Diego Gas & Electric (SDG&E) will be the beneficiaries of a pioneering partnership that has been in the making for nearly two years.

The wind farm, named Energía Sierra Juárez 1, went into official operation in June. It has an installed generation capacity of 155 MW and is expected to generate the equivalent of the yearly consumption of some 70,000 homes. The total footprint of the site occupies 13,100 acres and is comprised of 47 wind turbines and a transboundary transmission line nearly five miles long.

Generated electricity from the wind farm is transmitted to SDG&E via a purchase arrangement that will also enable the power company to receive renewable energy credits pursuant to California’s renewables portfolio standard.

The project, which cost about $300 million, included the involvement of numerous sponsor organizations, including IENova, SDG&E, the Border Environment Cooperation Commission, and the North American Development Bank (NADB).

Although there are many other U.S.-Mexico energy collaborations in existence – mainly in the arena of natural gas pipelines – Energía Sierra Juárez 1 is unique for being the first cross-border renewable energy project. Juan Antonio Flores, associate director of public affairs for NADB, called it a “breakthrough” that will likely lead to others similar projects.

“This project reinforces the collaboration between both countries within the context of the energy reform in Mexico,” Flores said.

Construction of the wind farm, which began in 2013, employed a work force in excess of 600. The vast majority of those employed comprised of professionals residing in the communities surrounding Tecate. Operation of the wind power plant has resulted in the creation of 20 permanent jobs, which have also been filled by locals.

According to Flores, completion of the project was a delicate balancing act that required strict adherence to U.S. and Mexico regulatory requirements. It involved securing a presidential permit from the U.S. Department of Energy for the installation of the cross-border transmission line, in addition to an environmental impact permit from the Mexican EPA, SEMARNAT.

Flores said the project’s feasibility also hinged greatly on “in-depth due diligence from the lending participants to make sure that all legal and technical components of the project were in place.” The financing was made more challenging due to the fact that it was a “syndicated transaction” involving two Japanese banks, one German bank, the NADB, and Mexican development bank NAFIN.

The Tecate wind farm is a first for renewable energy, but likely not the last. Hinting at the potential for Energía Sierra Juárez 1 to inspire further U.S.-Mexico renewable energy collaborations, Flores pointed to the Sierra Juarez Mountain Range as a possible resource for future wind energy project development. “IENova continues to work with the local Ejidos (agricultural lands) to secure land rights for the development of future projects,” Flores said.

According to an Aug. 19 NADB statement, the electricity generated by the wind farm will result in the yearly displacement of more than 125,000 metric tons of CO2 and nearly 190 metric tons of nitrogen oxides.