{"id":14739,"date":"2015-11-30T13:47:59","date_gmt":"2015-11-30T18:47:59","guid":{"rendered":"http:\/\/www.l-a-k-e.org\/blog\/?p=14739"},"modified":"2015-11-30T13:49:07","modified_gmt":"2015-11-30T18:49:07","slug":"southern-company-buys-157mw-roserock-solar-farm-in-texas","status":"publish","type":"post","link":"http:\/\/www.l-a-k-e.org\/blog\/2015\/11\/southern-company-buys-157mw-roserock-solar-farm-in-texas.html","title":{"rendered":"Southern Company buys 157MW Roserock Solar Farm in Texas"},"content":{"rendered":"

\nThat’s great, but how about more of those hundreds of construction jobs
\nand operation money right back here to Georgia?
\nBut since you’re buying solar power,
\nwhy do you need
\n
\nto buy a pipeline company<\/a>?
\nHow about
\n
\nhelping us against Sabal Trail<\/a> invading us from Texas
\nthrough Southern Company territory?<\/p>\n

\nSouthern Company PR, 30 November 2015,
\n
\nSouthern Company subsidiary acquires first solar project in Texas<\/a>,<\/p>\n

\n
\n<\/a>\n<\/p>\n

<\/p>\n

\n

\nSouthern Company subsidiary Southern Power today announced the
\nacquisition of a controlling interest in the 157-megawatt (MW)
\nRoserock solar facility—the company’s first solar project in
\nTexas—from Recurrent Energy, one of North America’s largest
\nsolar developers. The latest addition to one of America’s largest
\nrenewable portfolios, the facility is being developed by Recurrent
\nEnergy, a subsidiary of Canadian Solar Inc., which will retain the
\nremaining interest in the project.\n<\/p>\n

\n
\n<\/a>
\n“Southern Power’s first solar project in Texas helps further the
\ncompany’s robust wholesale business and further expands our solar
\nfootprint,” said Southern Power President and CEO Oscar C. Harper.
\n“With strategic acquisitions nationally, the continued development
\nof industry-leading assets aligns with our company’s low-risk
\nstrategy and enhances one of America’s largest renewable
\nportfolios.”\n<\/p>\n

\nRepresenting Southern Power and Recurrent Energy’s second
\npartnership arrangement, the project, currently under construction,
\nis expected to enter commercial operation in the fourth quarter of
\n2016.\n<\/p>\n

\n“Cost-competitive, large-scale solar power has enormous potential in
\nTexas,” said Canadian Solar Inc. Chairman and CEO Shawn Qu. “The
\nRoserock project and Recurrent Energy’s solar project pipeline in
\nthe state are each important steps forward as Texas approaches the
\nmore than 13 gigawatts (GW) of solar that has been forecasted across
\nthe state.”\n<\/p>\n<\/blockquote>\n

\nTexas will end up with a lot more solar power than that, but this is a good
\nstep forward.<\/p>\n

\nThis seems a bit odd:<\/p>\n

\n

\nThe electricity and associated renewable energy credits generated by
\nthe facility will be sold under a 20-year power purchase agreement
\nwith Austin Energy.\n<\/p>\n<\/blockquote>\n

\nIs Southern Company realizing it has the deep pockets to build solar plants
\nand sell the power for profit to customers?
\nThat’s a good thing, if so.<\/p>\n

\nLook at the price AustinEnergy is paying.
\nCynthia Shahan, CleanTechnica, 21 May 2014,
\n
\nAustin’s Super Cheap Solar Agreement (5¢\/kWh) Goes To Recurrent Energy, Not SunEdison<\/a>,<\/p>\n

\n

\nIt was announced in March that Austin Energy would likely be buying
\nelectricity from a SunEdison solar power plant for less than 5¢\/kWh
\nunder a 25-year power purchase agreement (PPA). If you’re not
\nfamiliar with electricity prices, that’s really low. The final deal
\nwas just completed last week but with an unanticipated move —
\nAustin Energy closed negotiations with Recurrent Energy. The
\nRecurrent Energy press release explains that it received “an
\naward from Austin Energy for 150 MW of solar capacity in West Texas.
\nThe power will be delivered to Austin Energy pursuant to a 20-year
\nPower Purchase Agreement.”\n<\/p>\n<\/blockquote>\n

\nColquitt EMC pays me 4.5¢\/kWh for solar electricity I generate,
\nsaying that’s their avoided cost, meaning that’s that Colquitt claims
\nthey would have to pay to generate the same power through other means,
\nmost likely via burning natural gas.
\nSo 5¢\/kWh is down in that range.<\/p>\n

\n

\nLarry Weis, Austin’s Energy General Manager, and Arno Harris,
\nRecurrent Energy’s Chairman and CEO, further explain:\n<\/p>\n

\n

\n“With our largest utility scale solar award, we are taking an
\nimportant step towards meeting our goal of acquiring 200 MW of solar
\nenergy by 2020,” said Larry Weis, Austin Energy General
\nManager. “Solar power has reached a price that is competitive
\nin the ERCOT market, allowing us to further diversify our energy
\nportfolio with renewable resources.”\n<\/p>\n

\n“The Texas market represents one of the most exciting
\nopportunities for the solar industry,” said Arno Harris,
\nChairman and CEO of Recurrent Energy. “The industry’s growing
\nscale and decreasing costs are enabling us to successfully compete
\nagainst conventional energy in deregulated markets like ERCOT. This
\naward from Austin Energy further proves solar’s ability to move into
\nthe mainstream energy mix.”\n<\/p>\n<\/blockquote>\n<\/blockquote>\n

\nThe CleanTechnica article adds that Austin Energy, after initially looking for a 50 MW solar power plant,
\nwent with 150 MW for a reason.
\nPrice could be part of that reason; the article says the previous low price
\nsolar plant record was 5.8¢\/kWh.
\nSolar prices are falling so fast there’s no reason to build anything else
\n(except wind for balancing).<\/p>\n

\nMeanwhile, also in Pecos County, Texas,
\nFirst Solar (FSLR) has the existing 22MW Barilla solar farm which it is expanding to 50 MW,
\nand
\n
\nthe Pecos County Commission heard 30 October 2014<\/a>
\nthat FSLR plans to build another one near Girvin for 100 MW.
\nThat Girvin FSLR plant is near the Roserock CSIQ one.<\/p>\n

\nAnd apparently even Texas has realized that solar power is a better deal even than wind power, and both together are better yet.
\nBob Seal,
\nFort Stockton Pioneer, 30 October 2014,
\n
\nCounty approves new solar site, eyes golf fees<\/a>,<\/p>\n

\n

\nDuring his presentation to the court, Doug May, Executive Director
\nof the Fort Stockton Economic Development Corporation, which
\ncontracts with the county, discussed a report by Texas Comptroller
\nof Public Accounts Susan Combs. May said that the report did not
\ninclude the photovoltaic industry in its recommendation that local
\ngovernments no longer offer tax abatements to wind farm
\ndevelopments.\n<\/p>\n

\nCombs’ rationale for that recommendation was that wind power
\ngeneration is intermittent and that the renewable energy industry
\nneeds to concentrate on power storage technology “so that it
\ncan provide reserve capacity available to the grid during peak
\ndemand.”\n<\/p>\n

\nPhotovoltaic plants generate peak power at about the same time as
\nthe peak demand for electricity, that is, on sunny summertime
\nafternoons.\n<\/p>\n

\nThe Comptroller’s State Energy Conservation Office web site states,
\n“Because solar and wind generation in west Texas generally
\noccur at different times (solar during the day, wind generation at
\nnight), combining solar power plants with wind farms has the
\npotential to result in fuller utilization of transmission capacity
\nand improved matching of generation to utility loading, including
\npeak loading conditions.”\n<\/p>\n<\/blockquote>\n

\nIncluded in some discussion of subsidies (wind and solar get far less
\nthan fossil fuels), there’s this gem:<\/p>\n

\n

\nAccording to the Comptroller web site, Texas state high-cost natural
\ngas severance tax exemptions in 2006 alone totaled $1.1 billion.\n<\/p>\n<\/blockquote>\n

\nAnd of course there’s a reason why Southern Power might find Texas
\nan especially good place to build solar power and sell the electricity.
\nTexas has its own electrical grid, with no need to mess with FERC:<\/p>\n

\n

\nSolar facilities here feed their power into the Electricity
\nReliability Council of Texas (ERCOT) grid. Pecos County lies in the
\nwestern — sunny — part of that grid. The ERCOT grid
\nsupplies power to about 90 percent of Texas’ electric load. All the
\nstate’s major urban areas benefit from the renewable energy produced
\nhere.\n<\/p>\n<\/blockquote>\n

\nNot being a financial expert (although I do own stock in both Southern Company and CSIQ), I have to wonder about this additional press release from
\nRecurrent Energy today,
\n
\nCANADIAN SOLAR SUBSIDIARY RECURRENT ENERGY SECURES DEBT FINANCING FOR 157 MW TEXAS SOLAR PROJECT<\/a>,<\/p>\n

\n

\nGUELPH, Ontario, Canada, November 30, 2015 — Canadian Solar
\nInc. (the “Company”, or “Canadian Solar”)
\n(NASDAQ: CSIQ), one of the world’s largest solar power companies,
\ntoday announced that its wholly owned subsidiary, Recurrent Energy,
\none of North America’s largest solar project developers, has closed
\non a combined construction and term debt facility, with a syndicate
\nof five banks, for the 157.5 megawatt (MW)ac\/ 212 MWp Roserock solar
\nproject in Texas. The project, developed by Recurrent Energy, is
\ncurrently under construction. The electricity generated by the
\nfacility will be delivered to Austin Energy pursuant to a 20-year
\nPower Purchase Agreement.\n<\/p>\n

\nWith KeyBank as the Coordinating Lead Arranger, five banks,
\nincluding Rabobank, Santander, NORD\/LB, and CIT will provide
\nproject-level construction debt, LC facilities and a back-leveraged
\nterm facility, totaling approximately $275 million.\n<\/p>\n

\n“This top tier group of financiers’ attraction to the Roserock
\nsolar project is a clear indication that large-scale solar can
\ncompete and succeed in competitive energy markets like Texas,”
\nsaid Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian
\nSolar. “This agreement is a testament to our broader team’s
\nability to deliver bankable solar projects with strong
\nfundamentals.”\n<\/p>\n

\n“This is our fourth transaction with Recurrent Energy in 2015.
\nWe are proud to continue our working relationship and view Roserock
\nas a strong investment in the fast growing Texas solar
\nmarket,” said Andrew Redinger, Managing Director and Head of
\nKeyBanc Capital Markets Utilities, Power & Renewables Group.\n<\/p>\n<\/blockquote>\n

\nSo Southern Power let CSIQ do all the financial organizing and
\nthen bought into a lucrative project after it was already financed?
\nOr did Southern Power have some role in the financing that’s not
\nspelled out in these obviously coordinated press releases on the same day?<\/p>\n

\nAh, Recurrent’s other PR of today sheds a little light,
\n
\nCANADIAN SOLAR SUBSIDIARY RECURRENT ENERGY PARTNERS IN 157 MW TEXAS SOLAR PROJECT<\/a>,<\/p>\n

\n

\nGUELPH, Ontario, Canada, November 30, 2015 — Canadian Solar
\nInc. (the “Company”, or “Canadian Solar”)
\n(NASDAQ: CSIQ), one of the world’s largest solar power companies,
\ntoday announced that its wholly owned subsidiary, Recurrent Energy,
\none of North America’s largest solar project developers, signed a
\npartnership agreement with Southern Power, a subsidiary of Southern
\nCompany. The agreement gives Southern Power a controlling interest
\nin the Roserock solar photovoltaic (PV) project in Texas. The 157.5
\nmegawatt (MW)ac\/212 MWp project, developed by Recurrent Energy, is
\nnow under construction in West Texas.\n<\/p>\n

\nUnder the terms of the agreement, Southern Power will acquire 51% of
\nthe equity in the solar generation project. Canadian Solar will
\nretain 49% ownership and contribute its share of the investment
\nrequired to complete the construction of the project, which the
\nCompany has financed through a construction and back-leveraged loan
\nfacility with a syndicate of five banks.\n<\/p>\n<\/blockquote>\n

\nSo it looks like Recurrent’s consortium of five banks provide 49% of the
\ninvestment, and Southern Power provides 51%.
\nIf so, that must mean Southern Company is finding solar power lucrative
\nenough to invest in even when the resulting electricity does not go to Southern Company customers.<\/p>\n

\nAnd Southern Company’s financing power apparently can make projects like this happen.
\nChristian Roselund, PV Magazine, 30 November 3015,
\n
\nWork begins on 212 MW solar project in West Texas<\/a>,<\/p>\n

\n

\nAs a key component to all of this, Georgia’s Southern Company has
\nacquired a 51% stake in the 157 MW-AC, 212 MW-DC project from
\ndeveloper Recurrent Energy and parent company Canadian Solar, which
\nretain 49% ownership.\n<\/p>\n

\nThe acquisition of this equity stake may have been the final piece
\nfor the others to fall into place, including financing. A syndicate
\nof five banks will supply the project with roughly $275 million in
\nproject-level construction debt, an LC facility and a back-leveraged
\nterm facility.\n<\/p>\n

\nRecurrent Energy notes that while construction of a substation for
\nthe project began in September, securing financing was the signal to
\nbegin major works. “We close financing on a project and then
\nmove forward,” Recurrent Energy Spokesperson Cate Powers told
\npv magazine. “For Recurrent, that’s a pretty common
\ncadence.”\n<\/p>\n<\/blockquote>\n

\nThat article also says Roserock is the biggest solar plant in Texas so far,
\nand that 5¢\/kWh is a record anywhere.<\/p>\n

\nPlus this irony that Roserock is located
\n“atop one of the largest oil fields in the United States.”<\/p>\n

\nSolar power is now so cheap it’s being deployed on top of oil fields.<\/p>\n

\nPS: Here’s RE Roserock LLC’s
\nTexas PUC 150 MW Solar Power Generator registration<\/a>.<\/p>\n

\n -jsq<\/p>\n","protected":false},"excerpt":{"rendered":"

That’s great, but how about more of those hundreds of construction jobs and operation money right back here to Georgia? But since you’re buying solar power, why do you need to buy a pipeline company? How about helping us against Sabal Trail invading us from Texas through Southern Company territory? Southern Company PR, 30 November […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[606,14,24],"tags":[8794,8974,8973,8704,713,8701,8702,12,7,8976,8975,8972,8714,108,237,6],"class_list":["post-14739","post","type-post","status-publish","format-standard","hentry","category-austinenergy","category-economy","category-solar","tag-austinenergy","tag-canadian-solar","tag-csiq","tag-economy","tag-financing","tag-georgia","tag-lake","tag-lowndes-area-knowledge-exchange","tag-lowndes-county","tag-pecos-county","tag-recurrent-energy","tag-roserock","tag-solar","tag-southern-company","tag-texas","tag-valdosta"],"_links":{"self":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/14739","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/comments?post=14739"}],"version-history":[{"count":2,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/14739\/revisions"}],"predecessor-version":[{"id":14741,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/14739\/revisions\/14741"}],"wp:attachment":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/media?parent=14739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/categories?post=14739"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/tags?post=14739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}