Utility Duke Energy has announced a US$500 million commitment to solar energy in the U.S. state of North Carolina. This includes both acquisition of five solar projects from independent developers and power purchase agreements (PPAs) with three more.
In February 2014 Duke issued a request for proposals (RFP) for 300 MW of solar projects in North and South Carolina. At the time developers were given the option to either complete the plants and sell the electricity to Duke or to build the PV plants on a turnkey basis for the utility.
The utility has instead chosen to construct and own three projects, which range from 65 MW to 23 MW in three different counties. This includes Strata Solar’s Warsaw project, which is the largest of the three at 65 MW and expected to be the largest PV plant east of the Mississippi River when complete.
Duke says that this change made sense for both the developers and the utility. When we went out to bid, we gave the developer some flexibility on how they wanted to develop the projects, explains Duke Communications Manager Randy Wheeless.
Obviously as far as financing, it makes sense for the developer to sell us the project now, and we can finance the project as we build it.
The RFP was limited to projects already in Duke’s transmission and distribution queue, and the utility says that through this process it was able to take advantage of the most promising projects in the state. Duke must still obtain regulatory approval for the acquisition, and will be responsible for completing all three by the end of 2015.
Four of the five projects from which Duke will purchase electricity are built by different developers. All are in different counties, and range from 15 MW to 48 MW in capacity. Duke estimates that it previously held PPAs with 460 MW of PV projects in the state.
Duke estimates that the state currently has around 500 MW of solar PV, and with this commitment the utility will be increasing North Carolina’s solar capacity by more than 50%. This is Duke’s largest single solar power procurement to date.
North Carolina’s market has been growing very rapidly, and the state became the third-largest solar market in the United States in 2013 with 335 MW installed. It is also the first market of this size in the U.S. South.