MidAmerican’s Topaz solar financing proves that bond investors have an appetite for green investments.
When MidAmerican Energy Holdings issued $850 million in bonds in February 2012 to finance construction of the massive 550-MW Topaz Solar photovoltaic (PV) farm, it raised more than a few eyebrows in the financial and renewable energy communities.
In the intensifying search for sustainable power options, solar energy is emerging as a viable solution. Many utility companies are investing in utility-scale solar plants, and the growth outlook looks strong -- especially for PV plants, which promise rapid and steady improvements in price and performance.
What’s driving your investment in renewables right now?
Lewis “Lew” Hay III intends to retire from NextEra Energy at the end of 2013 as part of a planned leadership succession process. Hay will serve as executive chairman from July 1, 2012, until his retirement, and James L. Robo, currently president and CEO of NextEra Energy, will succeed Hay as CEO, effective July 1.
(May 2012) Entergy Louisiana starts construction on gas-fired power project; Virginia Commonwealth University and Dominion partner on a test site for efficient energy technologies; Burlington Electric Department selects Siemens for meter data management platform; IKEA commissions four Blink electric vehicle charging stations; Edison Mission Energy, TIAA-CREF and Cook Inlet Region Inc. form partnership, and others.
Making room on the local grid for small-scale PV.
For the first time, perhaps, the electric utility industry may need to keep track not only of peak load, but also of minimum load, as the Federal Energy Regulatory Commission reviews a proposal by the Solar Energy Industries Association to employ a new definition of minimum load under a new, relaxed threshold test that would govern eligibility for fast-tracking of applications by generation developers to interconnect new, small-scale solar energy projects to the local utility distribution grid.
(April 2012) MidAmerican Energy awarded a contract to Siemens Energy to supply wind turbines for its 407-MW project expansion. American Electric Power began operating the 580-MW Dresden natural gas-fired combined-cycle power plant. Duke Energy and ChinaHuaneng Group signed a three-year agreement expanding their research cooperation to include coal and carbon capture and sequestration technologies. And others...
Renewable M&A lives on despite death of Treasury cash grants.
The U.S. Treasury cash grants for new renewable power projects expired at the end of 2011. These incentives, which were implemented under Section 1603 of the American Recovery and Reinvestment Act of 2009, helped to support continued capacity additions throughout the recession. The impending expiration of these grants caused a wave of merger and acquisition (M&A) activity during 2011 as developers and financiers rushed to get deals done and to begin construction in order to meet the Section 1603, 5-percent safe harbor threshold by the Dec. 31, 2011 deadline.
(March 2012) DTE Energy awards contract to URS; Exelon and Constellation reach an agreement with Electricite de France; Dominion and Lockheed Martin enter a joint marketing and development alliance; plus deals involving Nissan North America, CenterPoint Energy Field Services, Honeywell, Silver Spring Networks, and others.
With meters running backwards, utilities seek a niche.
As states implement renewable energy mandates, and as solar photovoltaic (PV) technology becomes more economical, the market for distributed rooftop solar is growing. As a result, various players are taking different approaches to finance PV development—from net-metered residential systems financed by third-party leases, to grid-scale, utility-owned projects. Fortnightly Contributor William Atkinson talks to some major players in solar PV finance and examines the implications for investor-owned utilities.