Dive Brief:
- Duke Energy Renewables (DER) announced Monday an acquisition for a 200 MW solar project, which will be the largest in its fleet.
- The Holstein solar project, located in Nolan County, Texas, began construction this year and is expected to be complete in the summer of 2020 under developer 8minute Solar Energy.
- Energy from the project will be sold through a 12-year hedge agreement to a subsidiary of Goldman Sachs, J. Aron & Co. LLC. Duke officials say it is the first time they have utilized such an agreement with a solar project.
Dive Insight:
Duke says the Holstein solar project will be capable of powering 40,000 homes, though much of the energy generated will be sold through a hedge agreement to the Goldman Sachs subsidiary.
Hedge agreements have been more common with wind projects, but appear to be growing in the solar sector. They allow energy to be sold to a buyer of last resort in the event wholesale power prices fall below a certain point.
More typically, solar projects are supported by power purchase agreements — but PPAs have been getting shorter in length to allow for more of the energy to be sold into wholesale markets, PV Magazine notes.
Developer 8minute brought a range of counterparties to the project. SunTrust is providing a tax equity investment in the project, and CIT Group and a consortium of banks are providing a construction loan, letter of credit and term loan facility for the project, according to the company.
The project requires more than 709,000 solar panels across approximately 1,300 acres.
Duke Energy, the parent company of DER, says it is now on track to own or purchase 8,000 MW of wind, solar and biomass energy by 2020. As Duke's unregulated business unit, DER operates 3,000 MW of domestic wind and solar generation facilities.
