SunPower Corp., a solar company majority-owned by Total S.A., sold what will be the largest utility-scale solar photovoltaic project in the United States that use tracking technology to NRG Energy Inc.
NRG, the country’s largest independent power producer, completed the acquisition last Friday shortly after the Energy Department announced that it agreed to guarantee $1.24 billion in debt for the project should creditors default.
The department finalized seven deals under the Loan Guarantee Program in the past three days before its deadline last Friday, equal to around $6 billion to cover loans in more than 2 gigawatts’ worth of solar projects and a large biofuel plant.
Financial details about the present deal weren’t disclosed.
California Valley Solar is the largest solar power plant of its kind in the country that uses solar panels that can track the sun. With the ability to realign itself to capture sunlight more efficiently, the Energy Department said the solar farm’s annual energy output is 25 percent higher compared with fixed PV installations.
Construction on the 250-megawatt California Valley Solar project began this month. Part of the solar PV farm’s capacity will be reached by year-end, with the entire plant becoming fully operational by 2013.
Once complete, the plant will generate enough electricity to meet the power demands of about 100,000 homes – almost all of San Luis Obispo County.
Pacific Gas and Electric Company, California’s largest utility, will buy all of the power supplied by the project under a 25-year power purchase agreement.
SunPower, through its power plants business, will complete the project’s design and construction together with engineering group Bechtel. NRG will jointly operate and maintain the project with SunPower for two years, then assume full responsibility of operations.
Comeback
NRG had said it would bounce back from significant first quarter losses with more utility-scale solar power plants in the coming months following its decision to abandon the development of two nuclear plants in Texas.
Affected by the write-down, the company incurred a net loss of $262 million, compared with a net income of $56 million a year earlier for the same period.
Even before the first quarter, NRG had already invested $300 million in the 392-MW Ivanpah solar thermal project last October, giving it ownership equal to 50.1 percent of the project, along with Google and BrightSource.
New Jersey-based NRG plans to invest more into solar projects – $800 million for the 290-MW Agua Caliente Solar PV project over the next three years and $450 million in California Valley for the next four years starting in the third quarter of 2011 at the latest.
The three plants have all secured loan guarantees from the Energy Department. Ivanpah was approved for $1.6 billion guarantee in April while Agua Caliente was given the green light for a $967 million guarantee last August.
In its latest quarterly report, NRG did manage report a second quarter net income of $621 million compared with a net income of $210 million year-on-year.
Utility mandates
California law requires utilities to derive a portion of the electricity they produce from renewable sources by 2020. Governor Jerry Brown signed the bill into law at the opening of SunPower’s new facility last April 12.
The state’s three largest utilities have been required to procure 20 percent of their power from renewable sources by 2010.
Currently, most utilities rely on hydropower, biomass and geothermal.
NRG owns and operates power plants that provide 25,000 megawatts of electricity from a mix of natural gas, coal, nuclear and renewable energy sources. It provides electricity to more than 1.8 million customers through its retail subsidiaries in Texas and the Northeast.
