The U.S. utility market continues its roll.
AEP Ohio, a unit of American Electric Power (NYSE: AEP), has entered into a "participation agreement" with Turning Point Solar, a joint venture of Agile Energy and New Harvest Ventures. The Turning Point Solar Project, at close to 50 megawatts, is one of the largest solar generating facilities east of the Mississippi River.
Despite the scale of recent "loan-guaranteed" PV projects from First Solar and SunPower in the 200-megawatt to 550-megawatt range, 50 megawatts is still a lot of solar power and requires almost 250,000 photovoltaic panels (which will be made in Ohio by Isofoton).
The 49.9-megawatt commercial solar facility will be built on approximately 750 acres of reclaimed land once mined for coal in Noble County, Ohio. Construction and commercial operation of the facility will be phased in over three years with construction expected to begin in the summer of 2012 and slated to be finished in 2015.
According to Glen Davis, CEO of Agile Energy, one of the co-developers of the project, more than 600 direct jobs will be created, including approximately 300 during the construction and installation phase of the project.
The "participation agreement" defines (a) how Turning Point Solar and AEP will cooperate in the development of the project, and (b) the terms under which the project assets will be transferred from Turning Point Solar to a new company that AEP will control.
AEP Ohio intends to invest $20 million in the development of the project.
Ohio Substitute Senate Bill 221 requires that AEP Ohio supply 0.06 percent of its load in 2012 with generation from solar resources, 0.09 percent in 2013, and 0.12 percent in 2014. The benchmark requirements ramp up annually to a total of 0.5 percent by the end of 2024.
American Electric Power is one of the largest electric utilities in the U.S., delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation's largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S.
Agile Energy, a developer of utility-scale renewable power generating projects, recently closed a $24 million second round of investment from Good Energies Capital, bringing the total amount of the investment by Good Energies to $37 million.
As the developer, Agile's role is to act as both conductor and stagehand in order to get the project ready for construction. This includes negotiating the lease, doing the land and environmental permit work, setting up the interconnection application, selecting an EPC contractor, working with a design engineering firm and setting out the construction plans so that all of the details of the project are laid out clearly and ready to be financed. A 50-megawatt project of this type will require in the neighborhood of $200 million in order to complete construction.
Agile is working with Ohio venture firm New Harvest Ventures on this enterprise. Agile provides capital and the solar and project development know-how, while New Harvest, which originated the project, provides local knowledge and, crucially, the human network and political connections required for a project of this scope.
The deal with AEP is a develop-transfer structure, rather than a PPA. When the project has received financing, Agile could still maintain management of the project.