Project Development, Solar, Utility Scale

From the Editor: Solar Growth Continues

Issue 1 and Volume 2.

GE Energy Financial Services – the financial investment arm of the world’s largest energy company – has revealed it has more than doubled its global solar power commitments in the last year, reaching some US$1.4 billion.

Indeed, 2011 was a record year for the company after it agreed to invest in a 50 MW portfolio of solar PV farms in Canada, a 10 MW project in Australia, a 550 MW US project, and a 20 MW installation in Italy.

Its latest $100 million investment – in this case in LS Power’s $550 million, 127 MW Arlington Valley Solar Energy II project – brings the company’s solar energy portfolio to 1 GW and some $5 billion in projects spanning in six countries.

Alex Urquhart, president and CEO of GE Energy Financial Services, explained the company strategy saying: ‘We started last year with the goal of increasing our investments in solar power given improving solar technologies and decreasing costs, and have exceeded our own expectations by doubling our portfolio, investing in attractive projects across the globe.’

Furthermore, in addition to GE Energy Financial Services’ equity investment, Prudential Capital Group – an investment business of Prudential Financial, Inc. – Banco Santander S.A., and other commercial banks and institutional investors provided debt financing for the Arlington Valley project.

The fact that a company as entrenched in the energy matrix as GE is not only making such massive commitments to large-scale solar power development but rapidly increasing its level of investment suggests that a major transition is underway. This transition appears even more striking when considered in the context of the on-going financial turmoil and policy uncertainty which has dogged the U.S. and elsewhere. Fundamentally, this type of industry engagement eloquently demonstrates an alliance of financial interests with those of utility supply companies and, ultimately, policymakers.

Indeed, output from the Arlington facility is to be purchased by California utility San Diego Gas & Electric, a unit of Sempra Energy, when it becomes operational, due at the end of 2013.

And, in the days following the GEFS announcement, the group had reported that 20.8% of the energy delivered to its retail customers in 2011 was provided by renewable energy sources. 2011 was also a year in which the company signed 17 new power contracts with mostly solar and wind energy sources representing 1482 MW.

SDG&E also recently announced a 25-year power purchase agreement for 200 MW of capacity from the Mount Signal Solar project in Imperial Valley, California, with a subsidiary of 8minutenergy Renewables – which is working with AES Solar to develop and build the plant. The first 100 MW of this PV installation is expected to be on-line by mid-2013 with completion of the plant slated for late 2013.

Evidently, this type of engagement in solar suggests that large scale, utility-backed development is becoming a rapidly growing sector and in this edition of Large Scale Solar we explore some of these themes with, for instance, a look at US utility strategies for developing a solar power portfolio. We also consider options for securing such significant investments with an in-depth article on systems security – after all, such projects are often in remote locations and represent a considerable temptation to the unscrupulous. In addition, we take a look at a major PV project in Thailand as well as a strategy that will see solar supporting sports stadia in South America.