Press Releases
09/27/2023
Avangrid and Vitol Reach Landmark Transfer Agreement for $100 Million of Production Tax Credits
Avangrid and Vitol Reach Landmark Transfer Agreement for $100 Million of Production Tax Credits
Deal cements Avangrid as an early mover in single-year as-generated credit transfers
ORANGE, Conn. — September 27, 2023 — Avangrid, Inc. (NYSE: AGR), a leading sustainable energy company and member of the Iberdrola Group, and Vitol Inc. today announced that they have reached a landmark transfer agreement for an estimated $100 million of 2023 production tax credits (PTCs) from eight operating wind farms, totaling 1,134 megawatts of generating capacity. The agreement marks one of the largest publicly announced deals to date since the passage of the Inflation Reduction Act (IRA), and it cements Avangrid as an early mover in single-year as-generated credit transfers.
“The Inflation Reduction Act offers an unprecedented stable framework, enhancing the attractiveness of renewables,” said Pedro Azagra, Avangrid CEO. “It has created a tax credit transfer process that is streamlined and removes the bottleneck that existed with the tax equity investment structure. We expect this transaction to serve as a reference point in this rapidly expanding market. The transfer ensures that we receive greater value from our renewable energy projects, and it will allow us to pay down debt and make further capital investments to benefit our customers.”
“We are delighted to partner with Avangrid through this tax credit investment, part of Vitol’s broader strategic investment in renewable resources and the energy transition,” said Rick Evans, CFO of Vitol Inc. “This new tax credit transfer mechanism promises to unlock significant pools of new capital to support investment in renewable resources.”
The IRA created a new transferable credit framework to help developers monetize PTCs. Under the IRA, renewable energy owners like Avangrid who qualify for tax credits but are not able to use them immediately can transfer credits to a third-party investor, such as Vitol. Prior to the IRA, this was only possible through a tax equity partnership, which requires a lengthy diligence and negotiation process as well as significant transaction costs.
The 2023 PTCs included in the transfer agreement with Vitol are from eight of Avangrid’s wind farms:
- Baffin Bay
- Deerfield
- Desert Wind
- Klondike II
- La Joya
- Tule
- Trimont
- Twin Buttes II
Avangrid expects to continue active participation in PTC transfers and will continue to push at the edges of this developing market.
Avangrid is the third largest wind operator in the United States with 8.6 gigawatts of installed capacity and is leading the development of the country’s large-scale offshore wind market. Avangrid operates a robust portfolio of 75 wind and solar facilities in the country and has a presence in 24 states. These facilities are not only helping states reach their environmental goals by generating clean electricity and reducing carbon emissions but are also constantly bringing important benefits to the communities where we operate by creating local jobs and boosting economic growth.
About Avangrid: Avangrid, Inc. (NYSE: AGR) aspires to be the leading sustainable energy company in the United States. Headquartered in Orange, CT with approximately $44 billion in assets and operations in 24 U.S. states, Avangrid has two primary lines of business: networks and renewables. Through its networks business, Avangrid owns and operates eight electric and natural gas utilities, serving more than 3.3 million customers in New York and New England. Through its renewables business, Avangrid owns and operates a portfolio of renewable energy generation facilities across the United States. Avangrid employs approximately 8,000 people and has been recognized by JUST Capital in 2021, 2022, 2023 and 2024 as one of the JUST 100 companies – a ranking of America’s best corporate citizens. In 2024, Avangrid ranked first among utilities and 12 overall. The company supports the U.N.’s Sustainable Development Goals and was named among the World’s Most Ethical Companies in 2024 for the sixth consecutive year by the Ethisphere Institute. Avangrid is a member of the group of companies controlled by Iberdrola, S.A. For more information, visit www.avangrid.com.
About Iberdrola: Iberdrola is one of the world's biggest energy companies and a leader in renewables, spearheading the energy transition to a low carbon economy. The group supplies energy to almost 100 million people in dozens of countries. With a focus on renewable energy, smart networks and smart solutions for customers, Iberdrola’s main markets include Europe (Spain, the United Kingdom, Portugal, France, Germany, Italy and Greece), the United States, Brazil, Mexico and Australia. The company is also present in growth markets such as Japan, Taiwan, Ireland, Sweden and Poland, among others.
With a workforce of nearly 40,000 and assets in excess of €141.7 billion, across the world, Iberdrola helps to support 400,000 jobs across its supply chain, with annual procurement of €12.2 billion. A benchmark in the fight against climate change, Iberdrola has invested more than €130 billion over the past two decades to help build a sustainable energy model, based on sound environmental, social and governance (ESG) principles.
