McDonald's and Lightsource BP team to ramp Louisiana's utility scale solar expansion

Lightsource BP has signed a long-term virtual power purchase agreement (VPPA) with fast food giant McDonald’s, the second such deal between them in carbon-heavy Louisiana where solar is gaining traction at commercial scale.

The transaction – terms were not disclosed – covers the full annual output of 327,000MWh from the planned $170m Prairie Ronde solar photovoltaic project in central Louisiana. Commercial operation will begin in late 2024.

This is equivalent to the amount of renewable electricity necessary to power 630 average-size McDonald’s restaurants.

Lightsource BP will finance, build, own, and operate the facility in St. Landry Parish which will have nameplate capacity of 180MW on a direct current basis.

“Growing our partnership with Lightsource BP reaffirms our commitment to building a more sustainable McDonald’s system at a meaningful scale,” said Elaine Strunk, senior director, global sustainability.

Last year, McDonald’s announced a VPPA involving Lightsource BP’s 345MW Oxbow solar project under construction in adjacent Point Coupee Parish that will be the state’s largest solar farm.

VPPAs allow corporate renewable buyers to commit to green energy without taking physical delivery of the electricity and are based on variable-priced cash flow and renewable energy certificates or credits (RECs).

In the US, each REC is evidence that 1MWh of electricity was produced from an eligible renewable energy facility. RECs have variable value based on market factors such as demand and are tradable.

By locking in a fixed price over a decade or more, VPPAs, if structured properly, can help shield companies against rising power prices and yield financial benefits. These contracts typically add new renewable energy facilities to the grid.

Lightsource BP said the Prairie Ronde and Oxbow projects represent a cumulative $500m private investment in the state which aspires to reach net zero greenhouse gas emissions by 2050. That is the biggest commitment by a commercial-scale solar developer in Louisiana.

About 13% of Louisiana’s emissions come from power generation and 66% from industry dominated by chemical and fertiliser plants and oil refineries. Both sectors are seen as large potential users of solar energy. The state's only large solar project is a 74.5MW capacity.

Last 30 September, Louisiana had 216MW of solar capacity installed with about two-third rooftop. Solar provided a miniscule 0.4% of the state’s electricity in 2021.