CPS Energy Partners with OCI Solar Power on 400-MW Project

Five months after greatly widening its solar PV scope, Texas municipal utility CPS Energy has found a partner in OCI Solar Power to bring 400 MW of capacity to its customers — and the potential to add a significant number of solar-related jobs to the region.

Last summer, the nation’s largest municipally owned utility (natural gas and electricity) announced it would expand its initial 50-MW solar plans eightfold to 400 MW, taking advantage of more attractive pricing and putting its stake in the ground as a national leader in utility-scale solar. Bidding on the RFP closed in early December. 

The deal is not yet final and it is still subject to PPA negotiations, but as it is proposed the project would become phased into operation over the next five years; no date is set to get the project underway, though Oci pegs 2013 for construction of the first solar facility and additional facilities built through 2016. Some of the facilities reportedly might end up in western parts of the state. Part of the deal includes Oci and subcon partner Nexolon relocating their domestic headquarters to the area. Nexolon would also build a panel manufacturing plant there.

Beyond generating 400 MW of solar PV power, officials expect a number of economic contributions to come from this project:

  • Multiple manufacturing facilities in the area to supply “proven components” for the new plants.
  • More than $1 billion in construction investment and $100 million in capital investment.
  • Create 800-plus jobs and a $40 million annual payroll, and tie up with a 25-year PPA.
  • Projected annual economic impact at $700 million ($177 million for construction alone).
  • “Good faith effort” to use local firms for some EPC aspects, and sourcing manufacturing components/processes. 

Details about the PPA including rates were not made available, but CPS president Doyle Benegy said the overall rate will be “among the most competitively priced” of any U.S. solar project, according to published reports. A local media outlet also reported the rates could be 30 percent cheaper than the $0.15-$0.16/kWh currently paid for its existing 14-MW “Blue Wing” solar farm (via Duke Energy). That compares to an $0.09 average that CPS customers paid as of last summer.

For Oci, a division of Korean conglomerate OCI formed one year ago with the absorption of Chicago-based Cornerstone Power Development, this is also a big step up in scale. Among its 20 projects in the U.S. and Canada totaling 150 MW, nearly all are single-digit-megawatt sized. 

This massive solar project also puts San Antonio itself in the spotlight — completing the city’s “Vision 2020” or “SA2020” goal to source 20 percent of its energy (1.5 GW) comes from renewable energy by the end of the decade. Already under its belt are the 14 MW “Blue Wing” solar farm and a 30-MW contract with SunEdison, plus roughly 1.06 GW of contracted wind energy.

“This accelerates San Antonio’s leadership in the New Energy Economy, and provides the kind of good-paying, brainpower jobs that are becoming the staple of our local job-creation efforts,” said San Antonio Mayor Castro.

CPS recently revised the terms of that 30-MW PPA with SunEdison, pledging to provide about 60 percent of the project’s long-term capital in the form of prepayments, a move that it says will save taxpayers $32 million over 25 years. That project, expected to be online this summer, involves two 10-MW installs on 200 acres at the Dos Rios Water Recycling Center and a third facility located to the southwest in nearby Somerset, Texas.

CPS/Oci’s proposed 400-MW plant, assuming it is finalized and completed, would be bigger than all but a handful of solar [PV] plants now on the drawing board across the U.S., according to SEPA in list updated in early December. Those projects include:

  • Solar Millenium’s 500-MW Blythe Phase 1 (California)
  • First Solar’s 550-MW Desert Sunlight (CA)
  • MidAmerican (FSLR) 550-MW Topaz Solar Farm (CA)
  • Acciona’s 500-MW Ft. Irwin project (CA)
  • BrightSource Energy’s 500-MW Hidden Hills (CA)
  • Solar Millenium’s 500-MW Blythe Phase 2
  • K Road’s 663-MW Calico Solar Project I (CA)
  • AES’ 700-MW Imperial Valley (CA)
  • Sempra’s 500-MW Mesquite Solar (AZ)
  • Solar Millenium’s 500-MW Palen project
  • Needle Mountain’s 1.2-GW Sterling project (CA)
  • Westside Holdings’ 2.7-GW Westlands Solar Park (CA)
  • Fotowatio’s 500-MW install for the USAF in Lancaster, CA
  • Brightsource’s 750-MW Rio Mesa (CA)
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Jim is Contributing Editor for RenewableEnergyWorld.com, covering the solar and wind beats. He previously was associate editor for Solid State Technology and Photovoltaics World, and has covered semiconductor manufacturing and related industries, renewable energy and industrial lasers since 2003. His work has earned both internal awards and an Azbee Award from the American Society of Business Press Editors. Jim has 17 years of experience in producing websites and e-Newsletters in various technology markets.

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