Hannon Armstrong and Clearway Power Inc. are collectively investing about $950 million in a virtually 2 gigawatt portfolio of present and new wind, photo voltaic and vitality storage tasks, capping off a 12 months of record-setting U.S. renewables progress with a watch on even better progress to come back.
Hannon Armstrong’s shared funding with Clearway Power Inc., the publicly traded affiliate of Clearway Power Group, will give the climate-focused infrastructure investor a most well-liked fairness curiosity in a seven-project portfolio together with 874 megawatts of onshore wind, 192 MW of utility-scale photo voltaic, and 557 MW of utility-scale photo voltaic mixed with 395 MW of co-located storage.
The overall finance worth of the portfolio is about $2.eight billion, together with tax fairness and everlasting fairness curiosity within the tasks, Clearway Power Group CEO Craig Cornelius mentioned in an interview. Two of the tasks are already constructed: the 419 MW Mesquite Star wind undertaking in Texas and the 192 MW Rosamond Central photo voltaic undertaking in California.
Two others — the 345 MW Mesquite Sky wind undertaking in Texas and the 110 MW Black Rock wind undertaking in West Virginia — are breaking floor this month and are anticipated to be operational by the top of 2021.
The three remaining tasks — the Daggett Photo voltaic undertaking in California with 482 MW of photo voltaic and 320 MW of co-located storage, and the 36 MW Waiawa photo voltaic undertaking and the Mililani 39 MW photo voltaic undertaking with 75 MW of co-located storage, each in Oahu, Hawaii — are set to begin building in mid-2021 and enter operation in 2022.
It’s a combined portfolio with “a whole lot of pure diversification inside it,” Cornelius mentioned. “You’ve received wind assets and photo voltaic assets spanning actually hundreds of miles of longitude. You’ve received income tasks and contract money flows that stability themselves out over time, with totally different combos of contracted income durations and open service provider durations.”
About 90 % of the tasks’ energy is contracted to counterparties in a portfolio with a better than 14-year blended common contract size. Offtakers embody utilities equivalent to Hawaiian Electrical and AEP and California neighborhood alternative aggregators together with East Bay Neighborhood Power and Clear Energy Alliance, in addition to company offtakers equivalent to Toyota, EcoLab, Intuit and Lowe’s, he mentioned.
Renewable vitality investing in a maturing U.S. market
Clearway Power Group, the corporate fashioned by International Infrastructure Companions’ 2018 acquisitions of NRG’s renewable vitality enterprise and SunPower’s utility-scale photo voltaic undertaking pipeline, is among the largest clear vitality builders within the U.S.. It has about $13 billion in property starting from utility-scale renewables to distributed photo voltaic and battery tasks, and a undertaking pipeline of 9 GW by 2023.
U.S. utility-scale photo voltaic, wind and vitality storage installations are set to interrupt data in 2020, with frequently falling prices making renewables cheaper than fossil fuel-based technology throughout many markets. Clearway competes with main renewable vitality builders equivalent to NextEra Power Sources, Invenergy, Engie, EDF, Enel and Iberdrola.
The scope and number of tasks within the newly introduced funding portfolio “is an indication of the maturity of the business,” Hannon Armstrong CEO Jeff Eckel mentioned in an interview. “You can also make repeat investments with totally different counterparties and proceed to realize efficiencies every time.”
The publicly traded climate-focused investor has greater than $6 billion in managed property as of September. Its utility-scale renewable investments embody an analogous 50-50 partnership with Engie North America in July, directing greater than $500 million to a 2.three GW portfolio of utility-scale wind and photo voltaic tasks, in addition to about $300 million in onshore wind tasks.
It has additionally invested greater than $50 million in distributed photo voltaic, about $40 million in neighborhood photo voltaic, and about $30 million in residential photo voltaic leases; $85 million in a Marine Corps microgrid undertaking, greater than $100 million in Engie’s 50-year vitality companies contract with the College of Iowa, and roughly $80 million in vitality effectivity tasks.
As renewables develop to make up a bigger and bigger portion of whole electrical energy technology, the combination of assets wanted to combine them into the grid are altering, Cornelius famous. The battery capability included in its Daggett and Mililani tasks “is configured with the purpose of taking photo voltaic output in the midst of the day and have or not it’s dispatched at a special time of day” — the identical crucial that’s driving many of the new solar energy in Hawaii and California to incorporate vitality storage.
The incoming Biden-Harris administration has made clear vitality a centerpiece of its local weather change mitigation technique, with plans for government actions to spice up federal clear vitality buying and renewables improvement on public lands, and a $2 trillion local weather motion plan that features decarbonizing the U.S. electrical energy sector by 2035.
Eckel additionally highlighted the potential for federal insurance policies that might develop the worth of renewables. Hannon Armstrong makes use of a “CarbonCount” rating to evaluate the affect of its investments, measuring the metric tons of discount of carbon dioxide equivalents per $1,000 invested.
The tasks will Clearway rank a CarbonCount rating of 1.06, which is “a pretty quantity — and if there have been a worth on carbon, it will have way more which means.”