North American independent power producer Tenaska is partnering with renewables developer Soltage in the acquisition of a portfolio of solar generation assets across several US states.
The investment is Tenaska's first at the portfolio level with Soltage. It comes on the heels of a corporate investment by Tenaska in March that secured its controlling interest in the renewables company. Tenaska's first investment into Soltage was in 2008.
With 85 megawatts (MW) of generation capacity under management to date, Soltage says it is planning to deploy $250 million for roughly 125MW of solar projects through 2015 and 2016, which the two companies will own jointly and Soltage will operate. Soltage will utilise most the capital it got from Tenaska for the construction of new assets.
Power generation from the new facilities is expected to be sold to a combination of municipal and healthcare offtakers under net metered credit (NMC) and power purchase agreements (PPAs). Some assets are already in operation in the northeast US. Commercial operation dates for assets under development are set for late 2015 and early 2016.
According to GTM Research, roughly 16.6 gigawatts (GW) of utility-scale solar PV capacity is currently in development across the US. Project costs are forecast to fall 40 percent by 2020.
The US Energy Information Administration (USEIA) projects a 2.6 percent annual growth in electricity prices. It also foresees annual growth in power consumption of 0.7 percent for industrial customers and 0.5 percent for commercial customers through 2040.
“Distributed solar generation empowers government and corporate consumers to lock in electricity costs well below utility rates, even if they can't host onsite systems,” said Jesse Grossman, Soltage co-founder and chief executive, in a statement. “Rising electricity prices and falling project costs continue to make solar a smart investment for forward-looking utilities and consumers.”
Tenaska is one of America's largest privately held companies, with 18 plants generating roughly 11,000MW of power under management. This includes about 450MW of utility-scale photovoltaic (PV) and distributed solar generation projects either in operation or under construction. The company posted $9.5 billion in gross operating revenues in 2013.