Looking for partners with deep pockets? Try the nearest $336-billion company.
Norway’s Scatec Solar, helped in part by backing from Google’s renewable energy initiative, finalized $157 million in financing agreements this week for the $188-million, 104-MW Red Hills solar power plant in Utah. The project joins a portfolio of solar investment locations both Scatec and Google in Africa, Europe, Asia and the Middle East.
Google will provide tax equity, Prudential Capital Group will provide debt financing and Scatec Solar providing sponsor equity. The power plant will be wholly-owned by a partnership jointly owned by Google and Scatec Solar, which structured and executed the financing for the project. Scatec Solar will manage and operate the plant when it goes into operation.
"We are very pleased to finalize financing for the Red Hills project and start construction on our largest project in North America," said Scatec Solar CEO Raymond Carlsen on Jan. 7. The project will be eligible for a 30-percent US solar investment tax credit.
Google has signed agreements to fund over $1.5 billion in renewable energy investments across three continents with a total planned capacity of more than 2.5 GW (gigawatts). This agreement represents the 18th renewable energy investment project for Google.
The Utah Red Hills Renewable Energy Park, set to be built on a site with excellent solar irradiation, will generate around 210 million kilowatt-hours (kWh) of electricity per year, which will be fed into the grid under a 20-year Power Purchase Agreement (PPA) with PacifiCorp's Rocky Mountain Power, according to the utility's obligation under the federal Public Utility Regulatory Policies Act.
When operational by the end of 2015, the plant will be Utah's largest solar energy generation facility, generating enough energy to power approximately 18,500 homes annually. Based on U.S. Environmental Protection Agency estimates, it will produce enough renewable power to prevent nearly 145 thousand tons of carbon dioxide emissions annually — the equivalent to not burning 156 million pounds of coal each year.
"This investment from industry leaders Google and Prudential Capital Group represents a major step forward in providing Rocky Mountain Power access to the superb solar power potential available in Southern Utah," said Luigi Resta, Managing Director of Scatec Solar North America.
The ground-mounted photovoltaic solar facility being developed on approximately 650 acres of privately-owned land in Parowan, Utah, will deploy approximately 325,000 PV modules on a single-axis tracking system and will interconnect to an existing transmission line.
Scatec Solar, headquartered in Oslo since its formation in 2001, develops, builds, owns and operates solar power plants, and as of 2014 delivers power from 220 MW worldwide, including an 8.5-MW plant in Rwanda; two phase-2 projects totaling 115 MW in South Africa after grid connection of the 75-MW Kalkbult project there in 2013; and several large scaled rooftop projects in the US, as well as installations in the Czech Republic and Italy. The South African projects, like Utah’s, operated under 20-year PPAs.
In the first quarter of 2014, Scatec signed a 20-year PPA with the Jordanian power company NEPCO for a 10-MW solar plant. And the company is currently developing a pipeline of utility-scale projects under the Feed-in-Tariff program introduced in Japan in 2012..
How important are government programs to such projects? Scatec’s own account of its business in the Czech Republic says it all:
“A generous support scheme for solar led to very strong growth in installations in 2009-2011. In the same period Scatec Solar developed and built four utility-scale solar plants in the country,” including one on a former heavy-metal waste dump. “A generous support scheme created a strong boom in the Czech solar market in the period 2009 to 2011. As consequence the Czech government retroactively established a revenues levy on renewable energy plants, and from early 2014 removed the Feed-in-Tariff for large-scale solar projects. We therefor see limited growth opportunities in this market in the near term.”