HOUSTON - Sempra Infrastructure, part of Sempra (NYSE: SRE) (BMV: SRE), has made a final investment decision to proceed with the Cimarron wind project, the latest phase of the Energía Sierra Juarez (ESJ) wind complex. The project, which is expected to generate about 320 megawatts (MW) of wind energy, has secured a 20-year power purchase agreement with Silicon Valley Power to provide renewable energy to Santa Clara, California.
The Cimarron wind project, with an estimated capital expenditure of $550 million, is slated to begin energy production in late 2025. It will feature 64 wind turbines supplied and installed by Vestas under a fixed-price contract. Additionally, Elecnor has a similar agreement for the balance of plant construction. The project will connect to the California Independent System Operator system via Sempra Infrastructure's existing cross-border, high-voltage transmission line.
Justin Bird, CEO of Sempra Infrastructure, expressed confidence in the project's potential for strong financial returns and its alignment with the company's goal to lead North America's energy infrastructure sector. The Cimarron wind project is anticipated to produce energy equivalent to the consumption of over 84,000 homes annually while reducing greenhouse gas emissions by approximately 210,000 metric tons of CO2e each year.
The construction phase is expected to create over 2,000 direct and indirect jobs and will involve community investment initiatives. The ESJ wind complex, including the first two phases with 263 MW capacity, currently has long-term agreements with San Diego Gas & Electric. The Cimarron addition will bring the complex's total capacity to over 580 MW, making it one of the largest commercial wind projects in Mexico.
Sempra Infrastructure has also filed an interconnection request for an additional 300 MW at the site, with the potential to exceed 650 MW in future expansions. This could bring the company's total installed wind capacity in Baja California to over 1,200 MW.
The project reflects Sempra Infrastructure's commitment to low-carbon solutions, which includes its existing portfolio of over 1,000 MW of clean energy infrastructure and other technologies under development such as hydrogen fuel production and advanced carbon capture.
This initiative is based on a press release statement from Sempra Infrastructure.
InvestingPro Insights
As Sempra (NYSE: SRE) forges ahead with its Cimarron wind project, financial indicators from InvestingPro underscore the company's robust fiscal stature. With a market capitalization of $44.77 billion and a P/E ratio that stands at 14.75, Sempra is positioned favorably in the market. The adjusted P/E ratio for the last twelve months as of Q4 2023 is closely aligned at 14.79, suggesting stability in the company's valuation relative to its earnings.
InvestingPro Tips highlight Sempra's financial resilience and potential for growth. Notably, the company has a track record of raising its dividend for 13 consecutive years, indicating a reliable return for investors. Furthermore, two analysts have recently revised their earnings estimates upwards for the upcoming period, which may signal confidence in Sempra's financial prospects and its strategic initiatives like the Cimarron wind project.
In terms of growth, Sempra's revenue has increased by 15.8% over the last twelve months as of Q4 2023, a testament to its expanding operations. The company's commitment to renewable energy infrastructure, as seen in the ESJ wind complex, aligns with a broader market trend favoring sustainable and low-carbon energy sources. This strategic direction could further bolster investor confidence and the company's financial performance.
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