Cannon spins off its Mexico wind-power developments

Cannon Power Group, the San Diego renewable energy developer, is spinning off some of its rights to wind development projects in Mexico to a new company formed by its chairman.

Gerry Monkhouse, who founded Cannon more than three decades ago, will head Mexico Power Group. Monkhouse, who lives in Mexico, will also stay on as Cannon’s chairman.

The new entity will develop wind projects in the states of Baja and Zacatecas, as well as elsewhere in Mexico, with the goal of selling power to Mexican purchasers. The new entity will seek to form public-private partnerships.

Cannon says the reorganization is “due to the substantially increased volume of activity of its Mexico projects”.

Cannon has been bullish on prospects for renewable energy in Mexico.

“That’s going to be a real up and coming market over the next four to five years,” Gary Hardke, Cannon Power president and co-principal with Monkhouse, told Recharge in an interview earlier this year. “...We’re thinking that that could be a better short-term opportunity than we had previously thought.”

Cannon retains rights to develop “a portion” of the Aubanel Wind Project, which was described in a news release last year as having the potential for 1GW of turbines, though the company now says the total project size at the site just south of the US-Mexico border is expected to be about 300MW, and that it is developing possible solar projects there as well. Cannon announced a partnership with Spanish turbine manufacturer Gamesa in the effort.

As of this reorganization, Cannon will focus on cross-border power sales into California rather than the Mexican market.

Hardke said that cross-border transmission raises a host of challenges, but that the long-tenured company has learned to focus on its projects and let the markets for their energy take care of themselves.

“You do have to make judgments about is there going to be demand there, are you in a market where there is demand or demand will develop? Certainly, with our Mexico project, that’s really a no-brainer because it’s near very large population centers, Tijuana and Mexicali, on the Mexico side; San Diego and the greater LA basin on the US side,” he said. “There’s a lot of off-takers in the market. Transmission is an issue, but that tends to be the case pretty much everywhere. And the prices on the US side and the Mexico side are usually good.”

In addition to Aubanel, Cannon is advancing a broad wind and solar development portfolio including:

  • A 120MW first phase of a wind project in Croatia for which permits are expected this year;
  • A 100MW expansion of its Windy Point/Windy Flats project in Washington to be built this year or next;
  • A solar project in San Bernardino County called Valle del Sol that Cannon says could have 750MW of capacity.