Wind to Wire: SunZia’s Role in Transforming the Southwest
By bringing DNV into the process early Pattern was able to secure USD 11 billion in financing.
Connecting the electricity generated by wind farms to the people and businesses that will use it has long been a challenge. Given their large scale, wind farms need a lot of open space—something that is not usually associated with population centers. The need to build wind generation capacity in the U.S. to accelerate the energy transition and provide more carbon-free energy is driving continued investment and creative solutions. But the interconnection bottleneck and the need to expand and modernize the U.S. transmission system is a persistent obstacle for energy project developers of all types.
To overcome this obstacle, Pattern Energy’s SunZia project tackles both issues: more wind generation and more transmission. It combines a 550-mile high-voltage direct current (HVDC) transmission line with two wind farms that will generate a total of more than 3,500 megawatts, or enough electricity to power more than 3 million homes.
Currently under construction, the HVDC transmission line will be capable of moving 3,000 MW of electricity from the wind farms in New Mexico to south-central Arizona, and where existing transmission infrastructure can make a significant portion of the electricity available for contracted and merchant sales in other locations in Arizona and California.
Challenge
With a project of this scale and scope, obtaining financing is a complex endeavor. Moreover, the HVDC transmission line, which more efficiently carries electricity over long distances, is less common in North America, adding complexity to the financing. In fact, this is one of the first times HVDC transmission of this length has undergone financing in the U.S. Building on a long-established relationship, Pattern turned to DNV for support early in the process, accompanying them for more than a year and a half from the start of work through the financial close. Often technical due diligence is performed when the project design is very mature; however, DNV’s early involvement in this project helped Pattern to identify and mitigate risks early in the design phase, promoting a smoother financing and construction process. DNV’s network of experts was crucial to the process—having expertise in all aspects of the project in house, especially HVDC transmission, ensured that Pattern had the technical support it needed.
The size of the project—the largest wind project developed in the Western Hemisphere—drew interest from investors from across the globe. The involvement of international lenders, combined with the project size, led to the need for an expanded environmental and social review. Lenders demanded a thorough due diligence review of the recently expanded Equator Principles, which serves as a risk management framework to assess and mitigate environmental and social risks when financing infrastructure projects. This required extensive and iterative reporting to provide the level of granularity needed to secure financing for topics ranging from human rights to biodiversity to community consultation.
The wide-open spaces of Arizona and New Mexico that made the scale of this project possible also increased the scale of the permitting process. Much of the project abutted or, in the case of the transmission line, bisected land administered by the United States Bureau of Land Management, which required a more stringent permitting and stakeholder management process that Pattern supplemented with extensive voluntary engagement and collaboration with communities and conservation organizations, even after construction had commenced.
Results
As one of the world’s largest developers and operators of renewable energy transmission, Pattern Energy is distinctly positioned to manage the largest clean energy infrastructure project in U.S. history. By bringing DNV into the process early, selecting partners and contractors that work as an integrated team, and ensuring that SunZia met stringent sustainability and environmental standards, Pattern was able to secure USD 11 billion in financing. While the project won’t deliver clean energy until 2026, it is already delivering value via economic development and jobs for New Mexico and Arizona.
