Month: January 2019

Notice

BEFORE THE PUBLIC SERVICE COMMISSION OF MARYLAND

IN THE MATTER OF THE APPLICATION OF MORGNEC ROAD SOLAR, LLC FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO CONSTRUCT A 45 MW SOLAR PHOTOVOLTAIC GENERATING FACILITY IN KENT COUNTY, MARYLAND

CASE NO. 9499

POSTPONED HEARING NOTICE

Regarding the captioned matter, the pre-hearing conference that was previously scheduled for Wednesday, January 23, 2019 at 9:00 a.m. at the Maryland Public Service Commission is now cancelled. It will be rescheduled for a date to be determined. The pre-hearing conference will concern Morgnec Road Solar, LLC’s application for a Certificate of Public Convenience and Necessity (CPCN) from the Maryland Public Service Commission. The application in this matter is available on the Commission’s website at www.psc.state.md.us. To access the application, select “Case/Docket No.” on the left side of the home page, and enter “9499”.

Types of Power Purchase Agreements For Offsite Renewable Energy Projects

The increased attention to carbon footprints and the adoption of sustainability commitments have led to major increases in demand for renewables among commercial, industrial, and institutional customers. Innovations in the structuring of renewable energy power purchase agreements have drastically increased the accessibility of renewable energy projects to corporate energy buyers. The main advancement in corporate renewable energy procurement has been the creation of new and creative structures known as Power Purchase Agreements (PPAs), that allow for renewable energy purchases from large, off-site projects. This article focuses on describing the most common types of power purchase agreements —the Virtual PPA (Synthetic PPA), the Retail PPA, and the Utility Sleeved PPA.

What Are Renewable Energy Power Purchase Agreements?

A Power Purchase Agreement (PPA) is a long-term contract between a renewable energy project and a power buyer, in which the buyer agrees to purchase the project’s energy for a fixed price during the contract tenor. Earlier renewable energy PPAs had terms of 20 years, but tenors have declined to 15, 12 and even 10 years to meet buyer demands.

How do PPAs Work?

Under the PPA structure, a third party provides the upfront investment to pay for the project and in return, receives a contracted long-term revenue stream from the energy buyer as well as all other available incentives. The corporate energy buyer receives a fixed rate for energy, usually at a discount to what they are already paying, without having to put up capital to build the project.

Types of Power Purchase Agreements for Offsite Renewable Energy Projects

There are a few different types of power purchase agreements to be aware of; Virtual PPAs, Retail PPAs, and the Utility Green Tariff Program.

What is a Virtual PPA (Synthetic PPA)?

The Virtual Power Purchase Agreement (VPPA), also known as a synthetic PPA) is a contract structure under which a buyer (or offtaker) agrees to purchase the project’s renewable energy for a fixed price, while the project receives the floating market price. If the fixed VPPA price is greater than the actual market price, then the project pays the difference to the offtaker. If the market price is greater than the VPPA price, then the project company keeps the difference. In this way, a VPPA is a financial hedge against volatile electricity prices. In a Virtual PPA, the buyer typically receives the project’s Renewable Attributes but does not take physical delivery of the energy. The buyer/offtaker continues to purchase its electricity through their local utility. A utility-scale solar VPPA enables large electricity consumers with fragmented/distributed electric loads to realize the benefits of renewable energy.

What is a Retail/Direct/Sleeved Power Purchase Agreement?

Another offsite power purchase agreement structure in use today is the Retail PPA. Also called a “Direct PPA” or “Sleeved PPA” this structure is suitable in de-regulated electricity markets where customers have retail choices, such as Maryland. Under this structure, the buyer enters a power purchase agreement with its retail electricity supplier and takes both the delivery and title to a project’s energy. The benefit of this structure is that the retail electric supplier takes on the market risks associated with wholesale electricity, and the customer gets a fixed price for the energy. Unfortunately, because these contracts are only available to customers in deregulated markets, the amount of renewable energy procurement is restricted to the buyer’s total load within those markets.

What is a Utility Green Tariff Program?

A utility green tariff program is another form of a Sleeved PPA that has been gaining momentum over the last year in regulated electricity markets. Typically, PPA sleeving programs are set up through a regulated utility’s rate structure. The utility, with approval from the state public utility commission, offers customers renewable energy through a “Green Tariff”. Like the Retail PPA, with a Sleeve PPA, the utility wears the whole market pricing risk and delivers renewable energy and in many cases the Renewable Energy Credits (RECs), to the customer for a fixed rate. Often the greatest downside to this structure is that customers will pay a premium for renewable energy in exchange for the utility taking on the market risk.

Which PPA is Right For Your Renewable Energy Goals?

Today, PPA’s are a key driver in the widespread deployment of utility-scale solar projects in the United States. While there are trade-offs and varying risks among the types of power purchase agreements, a solar PPA requires no capital investment, carries no maintenance costs, and locks in energy prices for up to 25 years. Renewable energy PPAs put clean energy into the electric grid, and the offtaker owns all the environmental benefits associated with its portion of the project. This is great news in a volatile energy market and for buyers looking to meet renewable energy and sustainability goals.

If you’d like to discuss how a utility-scale solar PPA could help you meet your corporate renewable energy goals, call us at (866) 256-0912 .

Understanding the Solar Project Development Process Steps

The development of utility-scale solar projects is a long and complex process, requiring extensive expertise. Urban Grid provides fully integrated solutions to bring a utility-scale solar project from conception to construction which involves six key steps discussed below.

Key Steps of the Utility-Scale Solar Project Development Process

When discussing the utility-scale solar project process, there are seven key steps to be aware of:

Identify Optimal Site: The foundation of the successful development of a utility-scale solar power project is identifying a site suitable for hosting a project. Key characteristics of a feasible site include:

Access to electric utility infrastructure
Land that is flat and cleared of trees
No wetland or floodplain impacts
No impact on protected ecosystems and organisms
No impact on cultural or archaeological resources, and

Locations where utility-scale solar development will provide net gains to the local community. The majority of this work is done as a “desktop analysis” using the best available mapping tools.
Land Acquisition: Once a site is deemed to be a quality location for a utility-scale solar project, we will enter into an Option to Purchase or Option to Lease Agreement to secure the land. The “Option” portion of the agreement allows the utility-scale solar developer to complete their studies and approvals without the fear of losing the property in the meantime. It is during the Option Period, that the solar project development process occurs. This process, which can take around 3-4 years, involves significant investment from the developer. It is, therefore, important to maintain a solid partnership between the landowner and the developer. The landowner can continue to use their land as they wish during the Option Period, and the solar project developer compensates the landowner for the Option on the land.
Interconnection Design and Application: The next step in the solar project development process involves managing interconnection to the electric grid. Proper interconnection with the electric grid is crucial to a successful solar project. Once a site is under Option, our experienced team of interconnection engineers assesses interconnection at the target location and develops necessary applications. Interconnection is one of the most critical, difficult and costly aspects of project development and as solar project development continues to expand, grids will become more congested leading to increased difficulties.
Site Environmental and Cultural Assessment: Even with an extensive desktop environmental review, utility-scale solar projects require extensive studies to be completed to ensure the project has no negative impact on existing ecosystems, threatened and endangered species, and cultural and archaeological resources. As a solar developer, we dedicate resources to evaluating our project sites to ensure that a solar project will not negatively impact the existing environment. Further, the soil conditions and topography are evaluated to ensure the project can be constructed efficiently.
Local and State Permits and Approvals: One of the most challenging aspects of the utility-scale solar development process is achieving all required state and local approvals. At the local level, a significant amount of time is spent either progressing a project through an existing process for zoning approvals, or in some cases, working closely with the local government to develop and implement new zoning ordinances to address utility-scale solar. Additionally, most states require projects to complete state-level approval. Urban Grid prides itself on quality solar project development while being a good neighbor, which requires working closely with local stakeholders to ensure their concerns are addressed. More and more, the success of a utility-scale solar project hinges on a developers’ ability to navigate the local permitting process which requires a strong relationship with local government, as well as community business interests and residents.
Project Construction: From ground-breaking to final deliverable of the completed, operational plant, a solar project developer must deploy a stellar construction management crew to assemble and direct skilled tradespeople for efficient and expedited plant construction. The team should complete the project within 6-12 months, depending on project size.

Ongoing Operation & Maintenance: Once a utility-scale solar project is placed in service, it requires very little in terms of operations and maintenance to continue efficiently producing clean, renewable energy. In most cases, a separate operations and maintenance provider is hired to monitor, perform ongoing maintenance, troubleshoot and correct problems, and even maintain the grounds. Compared to other generation sources, the total cost and time invested in operations are very low, making solar one of the most efficient energy generation resources available.

When it’s time to realize your dream of green business operations with clean energy, partner with the leader in utility-scale solar project development. Contact Urban Grid today.