Block ip Trap

Two Charlotte Developers Among those Awarded Duke Energy Contracts for Nearly $1B in Solar Construction

17 Feb 2021

Duke Energy has signed power-purchase agreements with 11 solar projects, including two by Charlotte developers, chosen in the most recent round of competitive bidding for new solar construction in the Carolinas.

Ten of the projects, totaling 589 megawatts, will sell power to Duke Energy Carolinas. A single 75-megawatt project will sell power to Duke Energy Progress. According to figures from the independent administrator of the competitive bidding process, that would represent $680 million to $990 million in solar construction over the next few years.

The utilities will own none of the projects. All of the developers of winning projects in this second tranche of projects opted to keep the solar farms and sell only the power and the Renewable Energy Credits. None of the winning projects is built by either utility or Duke Energy Renewables, the Duke Energy Corp. (NYSE: DUK) commercial subsidiary.

“We’re still pleased with the process,” says Duke Energy spokesman Randy Wheeless. “The purpose of the (Competitive Procurement for Renewable Energy) process is to get the best projects online at the least cost to our customers.”

The CPRE’s independent administrator, The Accion Group, estimates in a new filing with the N.C. Utilities Commission that the power price resulting from the bids will save Duke customers about $100 million over the next 20 years.

The price Duke will pay for the electricity appears to be lower than it was in the first round of bids, awarded in 2019. The average price for each megawatt-hour of power purchased under the newly awarded contracts would be $36.80 for Duke Carolinas. In 2019, the utility paid an average of $37.94 for each megawatt hour.

Duke and Accion are not disclosing the results for Duke Progress contracts this year. There was only one project there, so disclosing that purchase price would reveal proprietary information, they say. But it appears likely that price would be lower than 2019’s $38.30 per megawatt-hour.

The savings are not so large as in 2019, when Accion projected close to $260 million over 20 years. But the first round of bids brought about a larger drop in average prices than the second round of bids. Once the initial price is set, it is paid by Duke for the duration of the 20-year contracts.

Charlotte’s NARENCO, or National Renewable Energy Co., won a power-purchase agreement for its 50-megawatt Stanley Solar project in Albemarle. Solterra Partners, also based here, won a contract for the 75-megawatt Wilkes Solar project in Wilkesboro. Both will sell electricity to Duke Energy Carolinas.

The big winner in this round is the relatively small family company Renewable Energy Services of Pittsboro. RES won power-purchase agreements for three projects totaling 155 megawatts. They are the 70-megawatt Hornet Solar project in Stanley, the 35-megawatt Branch Bear Solar in Walnut Cove and the 50-megawatt Hunters Cove Solar in Rutherfordton.

RES, run by John, Matt and Tom Delafield, has completed 20 utility-scale projects to date for a total of 207 megawatts.

The more established Pine Gate Renewables, based in Asheville, got power-purchase contracts for its proposed Brookcliff Solar in Cherryville and Aquadale Solar in Mooresboro. Both are 50-megawatt projects. 

Misenheimer Solar, a 74-megawatt project to be built by California-based Orion Renewables Group, may have the most twisted history. The project was rejected in the 2019 bidding round, when it was proposed as an 80-megawatt project. Orion filed a complaint with the N.C. Utilities Commission contending that Accion used an improper standard in determining that Misenheimer did not qualify. The company wants to force Duke to sign a contract at the 2019 price, which is higher than the prices awarded in 2020.

Stanley Solar was also in the 2019 round of bids and won a contract. But it withdrew from the bidding process after the award was made.

The only project in the current round slated for South Carolina is the 75-megawatt JSD Flatwood Solar in Spartanburg. It is being built by JSD Management, which is based in Spartanburg. JSD is the only repeat contract winner from 2019.

California-based Cypress Creek Renewables, one of the Carolinas' most active developers, received a power-purchase agreement to sell Duke Carolinas power from its 55-megawatt Healing Springs Solar in Denton.

The only project awarded a contract for Duke Progress is the 75-megawatt Marley Solar in Kinston. That will be built and operated by California-based Birch Creek Development.

Accion had initially recommended 11 projects for Duke Carolinas. But the developer of 25-megawatt project that won in the competitive bids withdrew after the award, forfeiting a $500,000 security guaranty.

The Competitive Procurement for Renewable Energy process was mandated by the N.C. General Assembly at Duke’s request as an orderly way to develop solar power in the state. North Carolina had risen as high as second place nationally for solar on its grid under the previous procedures for development. They allowed solar developers fairly broad authority to build projects as large as 80 megawatts when and where they wanted and required utilities to buy the power at a state-determined avoided-cost rate.

Duke is allowed to award contracts or purchase the solar projects outright under the CPRE program. And Duke companies are allowed to build projects for themselves, as long as they win in the competitive process. Wheeless noted that Duke Carolinas and Duke Renewables had won two bids each in the past, and Duke expects to be competitive in future rounds.

Charlotte Business Journal (John Downey) | https://http://www.bizjournals.com/charlotte/