Southern Company issues $1.2 billion in green bonds

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On Monday, Southern Company subsidiary Southern Power announced that it had completed the issue of €1.1 billion in Green Bonds, and that it will allocate the U.S. dollar equivalent of that amount (US$1.2 billion) to financing and investing in solar and wind projects in the United States.

At the end of the first quarter of this year Southern Power owned 595 MW of operational utility-scale solar PV, as part of 1.16 GW of operational large-scale renewable energy projects. And while most are located in the Western United States, the company has deployed 156 MW in Georgia.

Southern Power also owns another 861 MW of solar PV that is under construction in California and Texas, and the majority of capacity both owned and under construction is based on First Solar thin-film PV modules mounted on the company’s trackers. When you throw in projects under development and/or contract, Southern has more than 26 solar, wind and biomass projects across the United States, representing over 2 GW of capacity.

This does not mean that Southern Company is wedded to renewable energy. The company is building two of the few nuclear reactors that have begun construction in recent decades in the United States, and Southern CEO Thomas Fanning has stated that he sees nuclear as the main component of a future low-carbon energy mix in the United States.

And while Southern Power has made significant investments in utility-scale solar, solar advocates say Southern Company has played a role in stifling the rooftop solar market in its home state of Georgia. And it has done so despite launching a rooftop solar consultation and owning a PV installation business.

According to Greentech Media, only 273 residential PV systems were installed in Southern subsidiary Georgia Power’s territory at the end of the first quarter of 2016. Additionally, Georgia Power’s installation service has only installed five PV systems in eleven months.

The most likely reason for this extremely low rate of installations is that unlike 41 other states and the District of Columbia, there is no mandatory retail-rate net metering in Georgia. Instead, Georgia Power offers an “avoided cost” rate for surplus electricity from distributed PV systems in its service area.

This is the renumeration system that many utilities have called for across the United States, and Georgia serves as a clear example of what could happen to other solar markets if utilities are able to control the regulatory landscape and replace retail-rate net metering with payments based on avoided cost.

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