Biden vision in action as DE Shaw solar farm piggybacks on coal power transmission link
'Capacity replacement' | The developer closes financing and begins construction of San Juan I PV facility in New Mexico adjacent to shuttered fossil generator
Developer DE Shaw Renewable Investments (DESRI) has achieved financial close and begun construction of its San Juan I solar and battery storage facility in the US state of New Mexico that will interconnect to the electric grid using existing infrastructure from a retired coal-fired power plant.
San Juan 1 with 200MW nameplate capacity on an alternating current basis and 100MW of battery storage is located adjacent to the former San Juan plant in northwestern New Mexico. Its last two of four generating units were retired in 2022.
DESRI plans to further leverage the plant’s electrical infrastructure to double solar plant capacity to 400MW later this decade.
President Joe Biden’s administration has been encouraging independent power producers and utilities to do exactly that at retired fossil sites where feasible to help accelerate the country’s transition to a net-zero carbon grid by 2035.
San Juan I will be eligible for federal subsidies in the 2022 climate law. The production tax credit (PTC) this year is worth $27.5/MWh for power sent to the grid in the first decade of operation, while the investment tax credit (ITC) value is 30% of capex.
Those values decline to $6/MWh and 6%, respectively, if the developer does not meet new apprenticeship and wage requirements.
On the flip side, both credits are increased 10% if the project meets certain domestic content requirements for steel, iron, and manufactured products and if located in an energy community, which are former brownfield or coal sites.
“As a capacity replacement for a retired coal generator, the project is an important part of New Mexico’s transition to state of the art, cost-effective renewable energy, firmed by battery storage,” said Thomas de Swardt, chief commercial officer at DESRI.
A consortium of lenders provided financing for construction of the project including Societe Generale as lead arranger.
DE Shaw is known for its use of mathematical modeling and qualitative analysis to make private equity investments in clean power.
DESRI said its portfolio of contracted, operating, and in-construction renewable energy projects currently includes 69 solar and wind farms representing more than a cumulative 8GW of capacity.
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