Fortis acquires UNS Energy for $4.3 billion; EdF sells half of Texas wind project to UBS; SunEdison sells $1.2 billion in bonds and redeems $750 million in debt; plus equity and debt transactions totaling nearly $7 billion.
SCE&G acquires larger share of VC Summer nuclear project; APS buys SCE's share of Four Corners power plant; Allete (Minnesota Power) acquires from AES 231 MW of wind farms in four states; EdF acquires 194-MW Texas wind project; NRG issues $1.1 billion in bonds; ComEd floats $650 million in two tranches; plus transactions involving TransCanada, Alterra, PSEG, and others totaling $3.4 billion.
Calpine acquires Texas combined-cycle plant from MinnTex; FirstEnergy sells 11 hydro stations to LS Power; Alterra Power acquires 202-MW wind farm; plus deals and debt issues totaling $1.8 billion.
Sunrun acquires AEESolar and SnapNrack; FirstEnergy completes sale of hydroelectric power stations to Harbor Hydro Holdings; Alterra acquires Shannon wind project from Horn Wind.
Energen signs stock purchase to sell Alagasco to The Laclede Group; Calpine agrees to sell six power plants to LS Power; Exelon agrees to buy Pepco Holdings Inc.; GE offers to acquire power and grid businesses from Alstom.
Electric utility mergers loom as the next step in restructuring.
Mark C. Beyer is chief economist of the New Jersey Board of Public Utilities (NJ BPU). This article expresses his views and not necessarily those of the NJ BPU, its commissioners, or its staff.
Despite the cost advantages enjoyed by large producers, at present the electric utility delivery system resembles a "cottage industry," consisting of many relatively small firms. Mergers and acquisitions of electric utilities, in which smaller companies combine to form larger ones, have been noticeably lacking.
Yet under a true rationalization of the industry, mergers would be expected to play a role similar in effect to electric industry restructuring. Mergers would produce benefits in terms of more efficient and effective organizations, resulting in increased productivity and as a consequence lower prices. And given the large size of the electric utility industry, the macroeconomic gains could be substantial.
Why have we not seen more electric utility mergers?
In fact, the electric utility industry in the United States is comprised of a large number of relatively small firms most of which were formed years ago based on factors such as geographic boundaries, legal concerns or political considerations, but usually not based on economic efficiency. The graph labeled "Distribution of Investor-Owned Electric Utilities by Market Capitalization" (see Figure 1) will illustrate this fact. It is based on data from the Edison Electric Institute and includes data on United States based investor-owned utilities.
Figure 1 shows that approximately 45 percent of the companies have a market capitalization of between $1 billion and $5 billion. That's a size very much suitable for a merger or an acquisition by private equity or an infrastructure or sovereign wealth fund. Approximately 20 percent of the companies have a market capitalization between $10 billion and $20 billion - a size suitable for a merger of equals with another electric utility or an acquisition by an entity such as Berkshire Hathaway.
Even though not every company would be available to merge, the current structure of the electric industry (which is primarily comprised of relatively small firms) is not economically efficient. Given the large overall size of the electric utility industry, consolidation of the industry resulting in better resource allocation and lower prices for utility services has the potential to materially increase income, output and economic growth.1
There are two primary reasons for this lack of consolidation - why the industry has tended to maintain its current inefficient structure:
• The pricing mechanism, known as cost of service, which has prevailed in the industry for many years; and
• Regulatory protectionism, with effects similar to trade protectionism.
The first factor, cost-based regulation, sets prices based directly on the costs of the regulated firm. It is meant to produce prices that would exist in a properly functioning market. Rate of return regulation, the predominant form of cost-based regulation, establishes the return on equity a utility can earn.
Depending on the jurisdiction, the rate of return on equity can be used to set rates initially, as a cap with earnings above the cap returned or shared with ratepayers, or as a guarantee with rates adjusted upward if necessary to enable the company to earn the approved return. The objective is to ensure that prices are set at a level that allows the utility to provide service and invest appropriately in new facilities, but not so high as to allow excessive profits. A fair return on utility investment, although not guaranteed, is reasonably assured through the rate-making process. Cost-based pricing does not necessarily produce rates for utility services that are efficient, least cost, or beneficial to the consumer. Markets are much more efficient at allocating resources and determining prices; however, cost-of-service pricing limits their effectiveness.
The second factor is what we might term "regulatory protectionism." Regulatory and trade protectionism both refer to policies that restrict or restrain trade or competition, and thereby retain relatively inefficient producers in the market. The reasons for such protectionism may be varied, but they include a desire to retain local control, as well as a misunderstanding as to the benefits of creating more efficient companies (perhaps because the benefits are poorly explained by the merging companies).
While regulatory protectionism may appear beneficial in the short term, in the long run, such barriers are counter-productive. They create less efficient firms and retard productivity gains. Nevertheless, bigger utilities (e.g., Duke Energy) are more efficient and effective enterprises, just as Home Depot is a more efficient and effective enterprise than the local hardware store. Regulatory protectionism leads to higher prices plus an inefficient use of resources.
In recent years, approximately one-half of the states in the United States have adopted some level of deregulation or restructuring of the electric utility sector designed to enhance competition and eliminate inefficiencies in the supply market. The goal of restructuring was to increase competition in both wholesale and retail markets in order to reduce electric rates and expand consumer choice; consumers did not want to pay for excess capacity and utility inefficiency.
Utility generation was required either to be divested or transferred to an unregulated subsidiary. The cost of energy and capacity was eliminated from the retail rate such that retail suppliers could compete directly in supplying electricity to the consumer. Electricity would be bought or sold in the wholesale market either through an auction process or through bilateral contracts. In contrast to efforts to expand electricity supply options, transmission and distribution would continue to be regulated under traditional cost of service regulation.
Restructuring eliminated cost-of-service regulation in generation and replaced it with a system of prices and markets that allowed producers to keep the profits from efficiency gains in electricity generation. After all, cost-of-service pricing had imposed the majority of cost overruns on captive retail customers, providing few incentives for production efficiency or technological innovation. The economics of rate-regulated utilities are such that the larger the rate base, the greater the earnings and the higher the stock price. This regulatory paradigm tends to encourage excessive capital spending: utility earnings are determined largely by the size of the rate base, which does not encourage the efficient allocation of capital.
In contrast, if investments are made outside the utility, the incentive is to minimize costs, so as to maximize profits. The profit incentive resulted in a dramatic increase in capacity factors at existing coal and nuclear plants. The efficiency gains were especially pronounced at nuclear plants as can be seen in Figure 2.
Prices for utility services based on the low capacity factors that were commonplace prior to restructuring appeared reasonable and cost-based at that time, despite the fact that the prices are not reasonable when compared to the prices determined by producers operating in competitive markets. Prices determined by competitive markets are often much lower than prices thought to have been reasonable under regulation. Although restructuring has produced dramatic productivity increases in generation, similar productivity increases have not been realized in transmission and distribution.
Mergers of electric utilities can provide numerous benefits to both ratepayers and shareholders, similar to those that have come from industry restructuring. Mergers can create the large organizations with economies of scale that can provide utility services in an effective and efficient manner. New technologies such as smart grid and advanced renewables can save costs and create environmental benefits; yet producers need volume to spread the costs of these complex and expensive fixed assets.
That the benefits of the merger must exceeds the costs - including the cost any premiums paid by the acquiring company - underscores the need for effective execution of the merger plan to assure that all stakeholders benefit. Only an adroit management team can fully realize the synergies; it requires much more than simply combining two organizations and eliminating redundant costs. The lower cost structure provides additional funds for investment in rate base without an increase in prices, further increasing profitability and shareholder value.
Mergers of electric utilities can lead to significant cost savings through personnel reduction, purchasing efficiencies, administrative consolidation, reduction in corporate overhead, avoided capital expenditures, lower cost of capital, stronger credit profile and improved access to capital, and streamlining of data processing functions. In addition to cost savings, mergers may yield other important benefits, such as the acquisition of management, geographic and regulatory diversification, opportunities for growth in infrastructure investment, more resilient risk management, new products and services, acquisition of skills (i.e., nuclear and data processing expertise), better customer experience, returns to scale, etc. More importantly, over time, all of the factors of production can be adjusted to optimal scale, further reducing costs and improving the overall efficiency of the organization. (See Figure 3.)
In the longer run, large, highly efficient utilities will produce lower rates for consumers and higher returns for shareholders. Profitability and shareholder wealth increase relative to the status quo as inefficient firms are not rewarded in the market. The lower cost structure could be used to finance additional energy efficiency or renewable investments without raising electricity prices to the consumer. Conversely, small, parochial producers cannot produce either competitive rates for consumers or adequate returns for shareholders.
Mergers are most beneficial among distribution utilities and among vertically integrated (distribution and generation) companies that are subject to rate of return regulation. Mergers among companies with regulated distribution and unregulated generation are less beneficial. That's because investors value regulated assets at a higher multiple of earnings and because potential market power concerns factor into the regulatory decision-making process. In addition, competition has already led to greater efficiency in unregulated generation markets, reducing the potential for further savings.
Furthermore, inherent conflicts exist in a holding company structure that contains both a distribution utility charged with providing safe, adequate and proper service at a regulated return, and a generation company seeking to maximize profits in competitive markets. In this type of situation, investors can always seek to maximize profits through a merger where the unregulated generating affiliate is spun-off, sold or merged with another unregulated generation company. And that is true especially if the holding company contains diversified investments that also could be sold or spun-off. History shows that diversified investments traditionally produce substandard returns based on the axiom: it is hard enough to make money in a business you understand, but almost impossible to make money in a business that you don't. And even when diversified investments are successful, such success usually is not reflected in the price of a company's stock.
In addition, some financial observers believe that investors prefer "pure play" securities, such that shareholder value would be increased if there were separate distribution and generation companies, especially when the generation company operates in competitive markets. The thinking goes that traditional utility investors prefer the earnings stability associated with the ownership of regulated assets rather than the higher risk and higher return associated with competitive markets. In this view, merchant generation affiliated with utilities could be pulling down the valuation of the parent company, making it a propitious time to sell, merge or spin-off the unregulated generation.2
The need for regulatory approval may account for the lack of mergers, either by imposing costs, or causing utility management to shy away from certain deals if regulatory approval appears too difficult to obtain. Nevertheless, numerous mergers have been approved that preserved economic benefits for both ratepayers and investors.
Thus, the decision as to what degree of jurisdiction to exercise with respect to mergers ought to depend on the nature, scope and relative riskiness of the particular transaction and its impact on customers and other parties. The focus of the review should be to not micro-manage the affairs of the company or its affiliates, but to assure a fair allocation of the costs and benefits between ratepayers and shareholders.
Most jurisdictions require that the transaction must produce positive benefits, or else produce no harm. However, the difference between these two ideas - the positive benefits test versus the no-harm standard - appears to be more form than substance.
In both cases, cost/benefit analyses provide guidance as to the desirability of the proposed transaction. Under the positive benefits test, the expected benefits must exceed expected costs for the transaction to be approved, while under the no-harm standard the expected benefits can be equal to or exceed the expected costs for the transaction to be approved. In other words, only in the case where the expected benefits are equal to the expected costs do the two standards produce different conclusions. From a practical viewpoint, there is no significant difference between the positive benefits test and the no-harm standard. However, states that do not review and approve mergers frequently lose out by not having a seat at the bargaining table.
State commissions evaluate mergers based on statutory criteria such as the impact on (1) competition, (2) rates, (3) employees and (4) service quality. The evaluation process provides a forum for stakeholders such as employees, unions, public advocacy groups, ratepayers, environmental organizations as well as debt and equity investors to have input into the process, which leads to greater public confidence in the decisions that result.
Let's consider these four criteria in detail.
1. Impact on Competition. The concern here is to what extent a combined entity would have the ability to influence the market price of electricity. Market power refers to the ability of a firm to raise the price of electricity above levels that would prevail in a competitive market. Even a market distortion of one, two or five percent could cost consumers hundreds of millions of dollars for a large utility. Available evidence indicates that power markets are often less competitive post merger.
Whether a merger of utilities that own generation will raise market power issues depends on whether the generation assets are regulated. Market power is less of a concern in cases where electric utilities are vertically integrated and prices are based on rate of return regulation. If the generation assets are subject to cost of service regulation, the matter can normally be resolved with behavioral mitigation and consideration of future entry and exit. If the merger involves unregulated generation assets where the merged company will have a significant share of the market, such that market power could be exercised, expect considerable regulatory intervention including possible divestiture of assets. Market power would affect not only the price paid by merged companies' customers but also the customers of all other utilities which buy power in the wholesale power market.
Mergers that lead to higher electricity prices as a result of market power are generally difficult to get approved, even with significant concessions. A large increase in the price of electricity harms residential customers, particularly low-income consumers. Higher electricity prices weaken overall industrial competitiveness and retard economic growth; expect strong opposition from large power users. Horizontal mergers of distribution companies make the most economic sense and encounter the least regulatory resistance.
2. Impact on Rates. A merger should produce a reduction of costs at all levels of the company - particularly at the corporate level, where various departments such as investor relations and communications can be reduced or eliminated. These "synergy savings" are estimated by the company and its consultants, argued over with regulators, and ultimately split between ratepayers and shareholders with 50 to 75 percent going to ratepayers, presumably in the form of lower rates.
The goal is to develop a reasonable estimate and split such that the basic economics of the transaction remain intact. Unrealistically low estimates of merger savings are counter-productive to the approval process. So, too are assertions that all the savings will occur in the non-regulated portion of the business, and therefore cannot be passed along to ratepayers. Adroit management will estimate synergy savings and include such cost sharing in the initial pricing of the transaction.
Nevertheless, despite considerable regulatory scrutiny, company management skilled in integrating new companies frequently exceeds the initial estimates, which benefits the company only until the next base case, when rates are reset based on the cost of service. And it's important to note here that the reset rates tend to be lower than the rates would have been without the merger, thereby further benefiting the consumer. Incorporating regulatory incentives for efficient behavior and technological innovation into the rate setting process will help to ensure that the benefits from economies of scale are fully realized and reflected in the prices charged to customers.
An important related question is the mechanism by which the synergy savings are returned to ratepayers. An immediate bill credit has a high present-value cash cost without necessarily being appreciated by the recipients. Other uses of the synergy savings including new call centers in the service territory particularly if jobs are returned from offshore, enhanced severance packages for employees which are especially attractive to older workforces close to retirement, new office buildings or green energy projects, may have lower cash costs but higher public appeal. Any base rate cases should be filed and settled prior to the merger. A merger followed by a large base rate request will likely prove unsalable.
The rate impact issue usually includes a thorough review of multiple issues, such as (a) the financial management of the company, (b) money pool and ring fencing questions, in the case of a multi-jurisdictional holding company, and (c) dividend policy consistent with the maintenance of investment grade credit ratings, etc. All equity transactions preserve credit quality and the merged company can buy back stock at a later date depending on cash flow and credit metrics. Complicated transactions that only financial professionals can evaluate may receive a poor reception from individual investors.
3. Impact on Employees. Job reductions occur mostly at the corporate level, in such staff areas as personnel, investor relations, legal, corporate finance, etc. Line operations are much less impacted. Yet any loss of jobs, although unfortunate, is not likely to have a significant long-run negative impact on the state's economy. In the longer term, the benefits from lower-priced utility services contribute to regional economic growth far exceeding any initial loss of jobs.
Nevertheless, the review process does include determining potential job loss, and making sure the employees are treated fairly (and in the case of multi-jurisdictional mergers, that each state bears a proportionate share of the costs and benefits). Some mergers have been structured such that an extremely small minority of individuals becomes rich leaving other employees to defenestration. Such an approach assures that almost every employee, whether manager or craft, will be working against the transaction.
Other general areas of concern involve honoring union contracts, adequacy of pension funding and review of actuarial reports, and retention of adequate personnel to perform regulatory functions. It is strongly recommended that the acquirer retain existing regulatory personnel who possess knowledge that is difficult for outsiders to duplicate except over a long period of time.
4. Impact on Reliability. The maintenance and improvement of service quality is also generally considered in the context of the merger, especially with utilities experiencing service quality issues. Service quality encompasses such standard reliability measures as Customer Average Interruption Duration Index (CAIDI) and System Average Interruption Frequency Index (SAIFI) as well as OSHA based safety measures. Performance on such measures may be compared with other utilities, and the use of financial penalties and rewards may be considered. Additional regulatory oversight may be required to assure appropriate allocation of resources within the holding company structure.
The issue of reliability generally depends on the quality and reliability of service prior to the merger. And because many transactions involve holding companies with operations in multiple jurisdictions, those states that have a review process are better able to advocate for additional investment, service quality improvements and jobs. In the case of companies that already provide high-quality service, the concern lies with any possible future deterioration. In the case of companies with a poor record on reliability, a major selling point of the merger may be the improvement plan presented by the acquirer, which may include detailed engineering and financial commitments.
In all cases, the public must be assured there will be no deterioration in service quality. Call center performance is frequently considered in this context, as is restriction on the future location of call centers. The adequacy of financial and manpower resources dedicated to operations are also part of the review process.
The smart money should bet on a rise in mergers in the electric utility sector. And here's one key reason: the electric industry today shows parallels with other American industries that have lately seen their fair share of restructuring and consolidation.
The impetus for the change includes continuing pressure from deregulation, rising investor expectations, increasing capital requirements, declining allowed returns on equity, new entrants into the market, and slow revenue growth.3 The lack of revenue growth is the result of economic weakness, increased energy efficiency, net metering and falling natural gas prices.4 Some of these pressures are cyclical but others appear to be secular in nature. Even where there is no direct competition in the provision of services such as with distribution and transmission suppliers, competition among buyers which use those services as inputs in the production process creates pressure to reduce costs and lower prices.
Market forces and technological change have caused the consolidation and restructuring of numerous industries in the United States. IBM's hegemony was shattered by the personal computer while Digital Equipment, Prime, Wang and many other computer companies did not survive. Wal-Mart's efficiency in distribution produced a list of casualties in retail too numerous to mention. Large pharmaceutical companies have merged to maintain earnings growth because of patent expirations and a paucity of successful new drugs. The railroad industry has become much more efficient through restructuring and consolidation. The wireless telecommunications industry continues to consolidate as have the chemical and oil industries.
Increasing transparency and intense competition throughout the economy assure that high cost producers cannot survive when lower cost alternatives exist. Once profit margins decline and/or markets for products become commoditized, industry consolidation frequently results because only large, low cost producers can create shareholder value in low margin businesses.
For all these reasons, consolidation in the electric utility industry is inevitable as customers demand better products at lower prices. The continuing need to reduce costs, enhance competitiveness and increase shareholder value will lead to further industry consolidation despite cost of service pricing and regulatory protectionism. Electric utilities are characterized by low revenue growth; cost cutting and a low level of revenue generating investment do not produce significant earnings growth and stock price appreciation. Mergers can have a salutary impact on earnings growth, innovation, investment, rates and shareholder value as a result of economies of scale, better resource allocation and lower cost structure.
1. Developing a list of merger candidates is beyond the scope of this paper, however, a merger between Consolidated Edison, Inc. and Public Service Enterprise Group, Inc. would have the potential to produce synergy savings, lower rates and fund innovation in distribution and transmission which could produce extraordinary benefits for both ratepayers and shareholders.
2. This discussion is not meant to imply that merchant generation is an inferior business just that investors value the business based on different metrics, and that competitive businesses require different management and financial skills to maximize shareholder value.
3. Well capitalized new entrants such as Google or IBM in energy management or smart grid could negatively impact utility revenues while large, well capitalized entrants such as oil companies could invest downstream in generation which would erode energy and capacity revenues in merchant markets but could maximize the value of their gas assets.
4. The impact of low natural gas prices on merchant generation is important as even some nuclear plants are having trouble recovering fixed costs in markets where prices are determined based on marginal costs. In addition, low gas prices encourage distributed generation thereby depriving distribution utilities of revenue especially if combined with net metering.
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Lead image © Can Stock Photo Inc. / javarman
Wisconsin Energy to acquire Integrys in a transaction valued at $9.1 billion; Dominion to acquire the CID Solar Project from EDF Renewable Energy; Landis+Gyr to acquire GRIDiant Corp.; PPL Corporation and Riverstone Holdings LLC to merge merchant power generation businesses into a new company Talen Energy Corporation; plus debt offerings totaling $1.5 billion.
PPL Corporation and Riverstone Holdings LLC announced a definitive agreement to combine their merchant power generation businesses into a new stand-alone, publicly traded independent power producer. The new company, which will own and operate 15,320 MW of generating capacity, will be called Talen Energy Corporation. Based on current generating capacity statistics, Talen Energy would be the third-largest investor-owned IPP in the nation. Under the terms of the agreement, at closing, PPL Corporation will spin off PPL Energy Supply, the parent company of PPL Generation, and PPL EnergyPlus, to shareowners of PPL and then immediately combine that business with Riverstone's generation business to form Talen Energy Corporation, an independent publicly traded company expected to be listed on the New York Stock Exchange. The transaction is subject to approval by the Nuclear Regulatory Commission, the Federal Energy Regulatory Commission and others.
Wisconsin Energy and Integrys Energy Group entered into a definitive agreement under which Wisconsin Energy will acquire Integrys in a transaction valued at $9.1 billion. Upon completion of the transaction, the combined company will be named WEC Energy Group, Inc. The combined entity is projected to have a regulated rate base of $16.8 billion in 2015, serve more than 4.3 million total gas and electric customers across Wisconsin, Illinois, Michigan and Minnesota, and operate nearly 71,000 miles of electric distribution lines and more than 44,000 miles of gas transmission and distribution lines. The combination brings together Wisconsin Energy's electric and gas utility (We Energies), plus a number of electric and gas utilities owned by Integrys (Wisconsin Public Service, Peoples Gas, North Shore Gas, Minnesota Energy Resources, and Michigan Gas Utilities).
Terra-Gen Power (Terra-Gen), an affiliate of ArcLight Capital Partners and Global Infrastructure Partners, signed a purchase and sale agreement with NRG Yield for the sale of its 947-MW Alta Wind I-V, X & XI, and Realty projects (Alta Wind). Terra-Gen expects to close the transaction in the third quarter of 2014, pending customary closing conditions, including the receipt of regulatory approval by FERC and the U.S. Department of Justice and the Federal Trade Commission. The sale of Alta Wind will divest Terra-Gen of its remaining phases of the Alta Wind Energy Center (AWEC). Terra-Gen originally acquired the AWEC development platform from Allco Finance in June 2008.
Dominion plans to acquire the CID Solar Project from EDF Renewable Energy (EDF RE). The asset sale agreement will close upon completion of installation, after which EDF RE will manage the commissioning and place the project in service. CID Solar Project, located on 200 acres of private land in eastern Kings County, California, was developed by EDF RE and is designed as a 27 MWp / 20 MWac ground-mount facility comprised of First Solar Series 3 solar photovoltaic modules with horizontal single-axis trackers. Construction commenced on June 12, 2014 with an anticipated date of operation in the fall 2014. The project's energy will be delivered to Pacific Gas and Electric under a 20-year PPA.
First Wind finalized seven 20-year PPAs with Rocky Mountain Power, a division of PacifiCorp. As part of the purchase agreements, Rocky Mountain Power will buy the output of the planned 20-MW Seven Sisters projects under its obligation from the federal Public Utility Regulatory Policies Act (PURPA). The Seven Sisters portfolio includes seven separate solar photovoltaic projects, four of which are to be sited in Beaver County and three to be located in Iron County, Utah. The start of major construction is slated to begin in late 2014 with a target completion date of July 2015.
Vista Solar completed a 118-kW high efficiency SunPower solar power system for national builder DPR Construction. The system, which was designed, engineered and installed by Vista Solar, is expected to generate at least 158,000 kW hours of energy each year. To generate the maximum amount of power within limited roof space, Vista Solar installed high-efficiency SunPower X21/345 solar panels. Additionally, Vista Solar installed Solar Edge inverters which pair DC optimizers with each panel to produce as much power as possible, as well as Silverback Solar racking for a custom design solution.
Seattle City Light, the Woodland Park Zoo and the Phinney Neighborhood Association (PNA) installed Washington state's largest community solar project to date. The Community Solar on Phinney Ridge project is designed for a 73 to 74 kW system on the roofs of two buildings at the zoo and PNA's Phinney Center. Anyone with a Seattle City Light account can purchase part of the array's output and the cost of which can be added to a participant's electric bill. Participants receive credit for their units' production on their City Light bills through June 30, 2020, along with all state renewable energy production incentives.
Petra Systems, along with its partner Caspian Renewable Energy, completed the installation of the largest smart solar power plant in the Middle East. The 5-MW project will be owned by Bahrain Petroleum Company (BAPCO), a wholly owned subsidiary of National Oil and Gas Authority (NOGA) and will deliver in excess of 8,000 MWh of renewable energy. Inaugurated June 25th at the Awali Township, the 5-MW BAPCO project marks the first phase of the 'Let Bahrain Shine' initiative, a consortium led initiative to assist the Kingdom of Bahrain meet up to 10% of its energy demands by 2010 through clean renewable energy.
First Solar received board approval from the Overseas Private Investment Corporation (OPIC), the U.S. Government's development finance institution, and IFC, a member of the World Bank Group, for financing to support construction of the 141-MW Luz del Norte solar power plant in Chile's Atacama Desert. The loans, which are expected to close late this summer, clear the way for First Solar to proceed with construction planning at the site. Terms of the deals were not disclosed. The OPIC board approved a loan of up to $230 million; the IFC board approved a $60 million loan.
First Wind finalized four 20-year PPAs with Rocky Mountain Power, a division of PacifiCorp and part of Berkshire Hathaway Energy. As part of the PPAs, Rocky Mountain Power will buy the output of the planned 320-MW Four Brothers solar development, which includes four 80-MW project sites. Rocky Mountain Power's purchase is made in connection with its obligation under the federal Public Utility Regulatory Policies Act (PURPA), and follows seven similar PURPA agreements for First Wind's 20-MW Seven Sisters projects. Once complete, the combined generating capacity of the four projects will be more than 800,000 MW-hours per year. Construction is slated to begin in 2015 with a target completion date in 2016.
Southern Research Institute completed the Southeastern Solar Research Center (SSRC), a facility to study solar PV systems. The facility will house numerous research efforts beginning with an EPRI project focused on solar PV system orientation, tracking and aging. The SSRC includes multiple configurations of photovoltaic solar panel arrays, microinverters and an advanced energy-monitoring system, including trackers that follow the sun throughout the day, as well as southwest-facing solar PV systems to evaluate the utilization of afternoon sun. The SSRC will be located on the campus of Southern Research Institute in Birmingham, Ala.
Landis+Gyr signed a definitive agreement to acquire GRIDiant Corporation, a utility analytics company focused on the electric distribution grid. GRIDiant's analytics suite will be integrated into Landis+Gyr's advanced metering infrastructure (AMI), distribution grid management and cloud-based solutions for utility customers. The influx of data from advanced metering, intelligent sensors and other distribution devices can challenge a utility's ability to utilize data for planning and operational performance. Landis+Gyr's advanced analytic offering will help correlate data collected from the smart grid network with other enterprise data to improve efficiency, streamline operations and facilitate a more rapid decision making process.
The U.S. Department of Energy (DOE) awarded The University of Texas at Austin a $12 million grant to fund carbon storage research aimed at reducing greenhouse gas emissions. The four-year DOE grant will fund a carbon storage research project at the university's Center for Frontiers of Subsurface Energy Security. This grant is a renewal of the department's five-year, $15.5 million research grant to the center in 2009. The goal of UT Austin's research is to improve geologic CO2 storage, especially from coal and natural gas used to generate electricity. A multidisciplinary team from the Cockrell School, UT Austin's Jackson School of Geosciences and Sandia National Laboratory in Albuquerque, New Mexico, will collaborate on the project.UT Austin's research project will begin this fall.
Abengoa, together with the National Renewable Energy Laboratory (NREL) and the Colorado School of Mines (CSM), has been selected by the US Department of Energy (DOE) to develop a new solar storage technology for thermo-electric plants. The program will last for two years and will require an investment of $1.76 million by the US Department of Energy. Abengoa will be responsible for leading the systems integration work and the technical-financial analysis, focusing on the commercial potential of this technology in future solar plant projects. This project is part of the SunShot Initiative carried out by the US Department of Energy, which seeks to promote innovation in order to make the cost of solar power more competitive.
Pacific Future Energy plans to build and operate the world's greenest refinery on British Columbia's north coast. The $10 billion refinery is being designed to be built in modules, each processing 200,000 barrels of bitumen per day. The bitumen will be converted into gasoline, diesel, kerosene and other distillates. When all of the project modules are complete, the facility will process up to 1,000,000 barrels per day, starting with the first phase of 200,000 barrels per day.
Tollgrade Communications partnered with DTE Energy in a Clinton Global Initiative (CGI) commitment to action for a comprehensive grid modernization project in Detroit that will roll out over the next three years. DTE Energy is deploying Tollgrade's LightHouse MV smart grid sensors and predictive grid analytics platform at key substations and feeders within its distribution network. With this CGI commitment, Tollgrade and DTE Energy are targeting to reduce nearly 500,000 customer outage minutes over the next three years in the DTE Energy service territory where Tollgrade's LightHouse system is deployed.
The Energy Department announced more than $10 million for projects to improve the reliability and resiliency of the U.S. electric grid and facilitate quick and effective response to grid conditions. This investment which includes six projects across five states - California, Hawaii, Missouri, North Carolina and Washington - will help further the deployment of advanced software that works with synchrophasor technology to better detect quickly-changing grid conditions and improve grid reliability. The six awards announced, subject to final negotiation, include: Pacific Gas & Electric ($2.9 million DOE investment; $3.9 million recipient cost-share), Quanta Technology ($998,920 DOE investment; $1 million recipient cost-share), Electric Power Group ($908,613 DOE investment; $931,788 recipient cost-share), Burns& McDonnell Engineering Company ($1.4 DOE investment; $1.5 million recipient cost-share), Hawaiian Electric Company ($500,000 DOE investment; $500,000 recipient cost-share), and Peak Reliability ($3.9 million DOE investment; $4.8 million recipient cost-share).
The government of Equatorial Guinea selected MAECI Solar, a division of Management and Economic Consulting, in collaboration with GE Power & Water and Princeton PowerSystems, to install a 5-MW solar microgrid system on Annobon Province, an island off Equatorial Guinea in west central Africa. The solar microgrid will feature 5-MW solar modules and system integration by MAECI, an energy management system and controls from Princeton Power Systems and energy storage from GE. The island-wide microgrid will provide reliable, predictable power, supply enough electricity to handle 100 percent of the island's current energy demand and be the largest self-sufficient solar project on the continent of Africa.
Itron and Milsoft integrated Itron's smart grid and AMI software and Milsoft's outage management system (OMS). This collaboration enhances Itron Total Grid, a combined managed services and smart grid offering, and expands capabilities for the public power sector. The integrated systems enable Milsoft's OMS to request data from all AMI meters from Itron's multi-commodity systems. Furthermore, Milsoft OMS, through MultiSpeak, can determine the communication status of Itron's meters. Itron's systems actively detect outages and restorations as they occur and pushes them immediately to Milsoft's OMS.
Florida Power & Light Company (FPL) plans to invest in long-term natural gas supplies, which the company believes will save customers money and keep fuel costs lower. FPL is partnering with PetroQuest Energy, to develop up to 38 natural gas production wells in the Woodford Shale region in southeastern Oklahoma. PetroQuest will oversee and operate those wells. FPL will receive a portion of the natural gas produced from each well for its use. As part of its petition, FPL asked the Florida Public Service Commission (PSC) to approve guidelines for future natural gas production projects to allow the company to take advantage of future natural gas investment opportunities.
The California Independent System Operator (ISO) and PacifiCorp announced that the Federal Energy Regulatory Commission (FERC) granted conditional acceptance of tariff amendments to expand the ISO's real-time energy scheduling market across multiple states in the Western Interconnection, for participation on a voluntary basis by balancing areas falling outside the ISO's control. The new market, known as the energy imbalance market (EIM), is expected to increase resource efficiency, reduce costs and more effectively use renewable and conventional resources. Under the EIM, the California ISO will automatically dispatch the best resources to meet immediate changes in energy demands. The scheduled EIM go live is set for October 1, 2014 (see, Docket No. ER14-1386, June 19, 2014, 147 FERC ¶61,231). In addition, Las Vegas-based NV Energy has applied with their state regulator to begin participation in the new market beginning in October 2015, and FERC has accepted an implementation agreement between NV Energy and the ISO (see, Docket No. ER14-11729, June 13, 2014, 147 FERC ¶61,200).
Duke Energy Progress agreed to purchase $1.2 billion of certain generating assets from North Carolina Eastern Municipal Power Agency; Acquisitions by PSEG Solar Source and SunEdison; Exelon will provide equity financing for 21 MW of Bloom Energy fuel cell projects; Debt issues from Calpine and NRG Yield Operating.
NextEra Energy Partners' Bluewater Wind Energy Center in Huron County, Ontario has begun commercial operation. The project is comprised of 37 turbines and is capable of generating up to 60-MW of electricity. The Bluewater Wind Energy Center is owned by Bluewater Wind, LP, an indirect subsidiary of NextEra Energy Canada Partners Holdings.
Siemens Energy secured an order for a total capacity of 36 MW in Nordfriesland, Germany to supply twelve direct-drive wind turbines, eleven model SWT-3.0-113 and one model SWT-3.0-101 turbine, for the Süderlügum publicly-operated wind farm. Siemens has also been contracted for a 20-year service and maintenance agreement. Süderlügum has the ability to utilize renewable energy sources during calm weather by the "Reactive Power at No Wind" technology from Siemens. This option enables the wind turbines to stabilize the alternating current power grid when no wind is blowing, by producing reactive power and feeding this power into the grid. Installation for the Süderlügum wind farm is scheduled for late 2014.
The city of Palmdale completed an aggregate 976-kW DC solar generation project. Located at Palmdale's Civic Center, DryTown Water Park and Marie Kerr Park, the system is designed to generate more than 1,580 MW-hours of electricity per year and meet nearly 70 percent of the electricity needs for the three sites. Constellation financed the project's development and will own and operate the system. Palmdale will purchase the electricity generated by the system at a fixed-rate through a 20-year purchased power agreement (PPA) with Constellation. The solar power arrays are comprised of approximately 3,200 PV panels.
EDF Renewable Energy's 61- MW Spinning Spur II Wind Project in Texas has reached commercial operation. Spinning Spur II commenced construction of 87 GE 1.85-MW, 87-meter rotor wind turbines 40 miles west of Amarillo in June 2013. The power is sold pursuant to an 11-year purchase agreement. The project is one of the first to feed into the new CREZ (Competitive Renewable Energy Zone) transmission infrastructure. EDF Renewable Services will provide long-term operations and maintenance for the facility, balance of plant, project oversight, and 24/7 remote monitoring from its NERC compliant operations control center (OCC).
The Department of Energy (DOE) took the first step toward issuing a $150 million loan guarantee to support the construction of the Cape Wind offshore wind project with a conditional commitment to Cape Wind Associates. If constructed, the project would be the first commercial-scale offshore wind facility in the U.S., with a capacity of more than 360 MW of clean energy off the coast of Cape Cod, Massachusetts. The proposed Cape Wind project would use 3.6-MW offshore wind turbines that would provide a majority of the electricity needed for Cape Cod, Nantucket and Martha's Vineyard. Under the proposed financing structure for the Cape Wind project, the DOE would be part of a group of public and private lenders.
SunEdison acquired the 156-MW Comanche Solar project from renewable energy developer Community Energy. SunEdison is partnered with Community Energy to complete the final development stage of the project by structuring the financing and providing procurement expertise for the project, following which SunEdison will manage the construction, operation, and maintenance of the solar power plant. Construction will begin in 2015 with commercial operation targeted for early 2016. The Comanche Solar project is one of the TerraForm Power call-right projects, whereby TerraForm has the option to purchase the project from SunEdison once it achieves commercial operation. Xcel Energy will purchase electricity generated from the solar PV power plant under a 25-year PPA with SunEdison. Once operational, the solar power plant will be managed by the SunEdison Renewable Operation Center (ROC).
SheerWind announced field tests of multiple turbines used in a row or series has even greater electrical power output. The INVELOX system, a new concept in wind power generation, is a large funnel that captures, concentrates, and accelerates wind before delivering it to turbines located at ground level. By placing 2 turbines in a series in an INVELOX system, power showed an increase of 1.7X when compared to single turbine. Multiple turbines in a single INVELOX tower means nearly zero operational downtime because maintenance can be done on one turbine while the other continues energy production.
The Keeyask Hydropower Limited Partnership (KHLP) broke ground on the 695-MW Keeyask Generating Station in northern Manitoba. The project is a collaborative effort between Manitoba Hydro and four Manitoba First Nations - Tataskweyak Cree Nation, War Lake First Nation, York Factory First Nation, and Fox Lake Cree Nation - working together as the KHLP. Manitoba Hydro provides administration and management services for KHLP and will own at least 75 percent of the equity of the partnership. The four First Nations together have the right to own up to 25 per cent of the partnership. The first generator unit in-service date is targeted for 2019 with all units being commissioned by 2020 at a total cost of $6.5 billion.
AEP Energy began installation of a 101-kW solar array on the roof of The Ohio State University's Student Life Recreation and Physical Activities Center (RPAC). AEP Energy will fund, build, own and operate the approximately 10,000-square-foot array, made up of 367 solar panels. The solar array is valued at approximately $400,000, and the electricity produced by the array - approximately 116,000 kWh annually - will be supplied to Ohio State at a rate of $.04 per kWh throughout the next eight years. After eight years, Ohio State and AEP Energy may opt to enter into a renewal agreement or allow the agreement to terminate.
New York Governor Andrew M. Cuomo awarded $3.3 million to seven research teams to develop technologies that add resiliency and efficiency to New York State's electric grid. The projects were awarded support from the New York State Energy Research and Development Authority's (NYSERDA) Electric Power Transmission and Distribution Smart Grid Program.
The funded projects include:
• Brookhaven National Laboratory ($250,000) - Using radar in real-time response for restoration of electric utility systems;
• Clarkson University ($381,000) - Design of a resilient underground microgrid;
• ClearGrid Innovations ($100,000) - Using computer vision to analyze pictures of electric distribution problems;
• Con Edison, ($2 million) - Demonstrating gridlink, a non-synchronous microgrid solution; Cornell University ($227,000) - Advanced microgrid integration with distributed energy resources;
• Lockheed Martin Mission Systems Training ($300,000) - Integrated aerial weather damage assessment system; and
• Rochester Institute of Technology ($78,000) - Microgrid solutions for improving economic and environmental cost and grid resilience.
The U.S. Court of Appeals for the District of Columbia Circuit has denied various petitions seeking review of Federal Energy Regulatory Commission (FERC) Order 1000, concluding that FERC had authority under the Federal Power Act to compel the various transmission sector reforms initiated by the Order.
Among other conclusions, the D.C. Circuit upheld FERC's authority to (1) remove Rights of First Refusal (ROFRs) from federal approved transmission tariffs, (2) require transmission providers to participate in regional planning to consider regional grid needs, (3) require such planning to include an ex ante allocation of costs of approved grid projects to project beneficiaries, and (4) require regional planning to consider transmission needs driven by public policy requirements, such as state laws or local ordinances.
The parties seeking review of FERC Order 1000 had included some 45 petitioners and 16 intervenors, including state regulatory agencies, electric transmission providers, regional transmission organizations (RTOs), and electric industry trade associations. (So. Caro. Pub. Serv. Auth. et al., No. 12-1232, Aug. 15, 2014.)
Six U.S. nuclear utilities have established a technical advisory board for the deployment of GAIA, AREVA's next generation pressurized water reactor (PWR) fuel assembly design. These six utilities - including Dominion, Duke Energy, Exelon and PSEG - share a common interest in ensuring the technical advancement and demonstration of the new design for the U.S. market. As part of this program, one of the utilities will operate a set of eight lead test assemblies starting in spring 2015. The GAIA fuel design provides utilities cost-savings through better thermal performance and increased tolerance to earthquakes.
CB&I awarded contract orders by Entergy Operations valued in excess of $100 million for project services related to implementation of Nuclear Regulatory Commission (NRC) ordered modifications and upgrades at multiple nuclear energy facilities throughout the U.S. Since the Fukushima Daiichi incident in 2011, the NRC has required U.S. nuclear plants to evaluate and upgrade equipment and safety plans to reduce the likelihood of damage from overheating and containment failure in the event of a complete loss of power.
Babcock & Wilcox Power Generation Group (B&W PGG) was awarded a contract to design and manufacture two coal-fired boilers to be installed in the Dominican Republic, at the Punta Catalina Power Plant, for Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE).
The contract, booked in the second quarter of 2014, was awarded by Italian engineering and procurement contractor Tecnimont S.p.A, which is developing the project as part of a consortium which includes Tecnimont, Constructora Norberto Odebrecht S.A. and Ingeniera Estrella S.r.l. B&W PGG will supply two 360-MW boilers, coal pulverizers, air heaters, fans and structural steel for the plant. Project management and front-end engineering for the project are underway in B&W PGG's U.S. operations. The project is scheduled to be completed October 2017.
The Sacramento Municipal Utility District obtained a 50-year renewal to operate its hydroelectric projects on the upper American River. The utility operates 11 reservoirs and eight powerhouses, which generate 688 MW of electricity, representing about 15 percent of SMUD's annual power. Part of the new license from FERC calls for SMUD to make some changes. The utility will make several recreational upgrades to reservoirs and it will increase the volume of water it releases into streams.
Mitsubishi Heavy Industries (MHI) received an order for a world's largest post-combustion CO2 capture system for the enhanced oil recovery (EOR) project in Texas, which is primarily promoted by NRG Energy and JX Nippon Oil & Gas Exploration (JX Nippon) of Japan. The system will capture CO2 from flue gas from an existing coal-fired power generation plant and will have a CO2 capture capacity of 4,776 metric tons per day (mtpd). MHI received the CO2 capture system order from Petra Nova CCS, a special purpose company (SPC) of NRG and one of the companies implementing the project, through Mitsubishi Heavy Industries America (MHIA), a wholly owned subsidiary of MHI in the U.S. The system is slated for completion in the fourth quarter of 2016.
Minnesota Power, a utility division of ALLETE, reached a settlement agreement with the Environmental Protection Agency (EPA) and the Minnesota Pollution Control Agency that resolves alleged violations of the Clean Air Act. The agreement does not include any admission of wrongdoing on the part of the company. Minnesota Power is one of many utility companies in the U.S. whose investments in electric generation facilities were reviewed as part of the EPA's Coal-Fired Power Plant Enforcement Initiative that began in 1999. The initiative has resulted in more than 25 related settlements nationwide. Under the terms of the settlement, ALLETE will pay a $1.4 million civil penalty. In the second quarter of 2014, ALLETE recorded an after-tax expense of $2.5 million, or $0.06 per share, to reflect a liability associated with the conservation and clean energy projects.
Supported by the U.S. Agency for International Development (USAID), seven senior executives from the government of Haiti and Electricité d'Haïti participated in an executive exchange with their counterparts from Colombia's energy sector to review best practices in electricity sector reform and governance. The exchange, conducted by the U.S. Energy Association as part of its Haiti Energy Policy and Utility Partnership Program (HEPP), a two-year project conducted jointly with the government of Haiti and Electricité d'Haïti to encourage electricity sector reform, encourage private sector participation and investment, and make way for future generation capacity expansion.
Duke Energy Progress (Duke) and the North Carolina Eastern Municipal Power Agency (NCEMPA) approved an agreement for Duke to purchase the Power Agency's ownership in certain generating assets. NCEMPA currently maintains a partial ownership interest in several Duke Energy Progress plants, totaling approximately 700 MW, including: Brunswick Nuclear Plant Units 1 and 2, Mayo Plant, Roxboro Plant Unit 4 and the Harris Nuclear Plant. The purchase price for NCEMPA's ownership interest in the plants, including fuel inventories and spare parts inventory, is $1.2 billion, subject to certain adjustments as set forth in the asset purchase agreement (APA). Under the agreement, Duke Energy Progress and NCEMPA will enter into a 30-year wholesale power supply agreement.
PSEG Solar Source acquired the El Paso Solar Energy Center, a 13-MW solar energy facility near El Paso, TX, from juwi solar (JSI). The project was developed originally by JSI and has a 30-year PPA with El Paso Electric. The $22 million acquisition will increase PSEG's Solar Source's portfolio capacity to 106 MW. JSI is the EPC contractor for the project and will operate the project for PSEG Solar Source upon completion. Construction had commenced already and was expected to be completed by year's end.
SunEdison completed its acquisition of a 50% ownership stake in Silver Ridge Power (SRP) from a subsidiary of AES for approximately $178.6 million in cash. Through its ownership in the SRP joint venture, SunEdison now owns a 50% interest in 36-MW of solar power plant operating projects, including the 266-MW Mt. Signal solar project in California, and a 40% interest in the Tenaska Imperial Solar Energy Center West 183-MW solar power facility to be completed in 2016. The other 50% of the outstanding limited liability company interests of SRP remain held by an affiliate of Riverstone Holdings. SunEdison will provide operations and management (O&M) and asset management for SRP's entire projects portfolio.
ABB won an order worth approximately $400 million from NSP Maritime Link, a subsidiary of Emera, to supply a HVDC power transmission solution creating the first electricity link between the island of Newfoundland and the North American power grid. The Maritime Link Project is a 500-MW HVDC connection that will deploy ABB's HVDC Light Voltage Source Conversion (VSC) technology incorporating a full VSC bipolar configuration to further enhance system availability. In addition to the two converter stations for the ±200 kV HVDC link, the project scope also includes two 230 kV AC substations in Newfoundland, one 345 kV AC substation in Nova Scotia and two cable transition stations. The project is scheduled for commissioning in 2017.
ABB also won an order worth $78 million from Saudi Electricity Company (SEC), Saudi Arabia's national power transmission and distribution operator. ABB will supply transformers for two new combined-cycle power plants that will boost transmission capacity around the capital, Riyadh, and surrounding areas of the central region. ABB will deliver generator step-up (GSU) transformers, power transformers and station service transformers for SEC's combined-cycle power plants. The order was booked in the second quarter of this year.
AMSC, a global energy solutions provider, entered an agreement with ComEd to develop a deployment plan for AMSC's high temperature superconductor technology to build a superconducting cable system that will strengthen Chicago's electric grid. The Resilient Electric Grid (REG) effort is part of work underway by the Science and Technology Directorate of the U.S. Department of Homeland Security (DHS) to secure the nation's electric power grids and improve resiliency against extreme weather, acts of terrorism, or other catastrophic events. The Resilient Electric Grid is a self-healing solution that provides resiliency in the event that portions of the grid are lost for any reason. The ComEd installation would be the first commercial application of this technology in the United States.
Renewable Energy
Xcel Energy, the EPA, and the Colorado State Land Board joined community solar developer Clean Energy Collective (CEC) to officially open Denver County's newest community solar facilities - two 500-kW solar arrays in Denver County. Developed on a 5-acre site at the Evie Garrett Dennis School campus in northeast Denver, the two medium-scale solar PV arrays, consisting of more than 4,000 panels, are the eighth and ninth arrays CEC has brought online as part of Xcel Energy's Solar Rewards Communities program. Through the community solar model, any Xcel Energy ratepayer in Denver County can purchase individual panels in the shared arrays, from one kW up to enough panels to off-set all of their electricity needs.
SunEdison and BlueWave Capital completed a 1.8-MW solar power plant constructed on a remediated EPA Superfund site in New Bedford, Massachusetts. The City of New Bedford is the owner and host of the site and will purchase the net metering credits generated from the system. SunEdison partnered with BlueWave Capital to develop the project, arranged construction financing and permanent financing for the project, and managed local partners to provide EPC services. In addition to owning and hosting the site, the City of New Bedford signed a 20-year net credit purchasing agreement with SunEdison.
ReneSola Ltd will develop a 13-MW solar project in Dorset, England and expects the solar farm to be fully operational and connected to the national energy grid by end of 2014. The company has identified a number of potential buyers for the project, which received planning consent in January 2014 and is eligible for the United Kingdom's support scheme to promote renewable electricity-generating technologies. The project will feature ReneSola PV modules exclusively, specifically the Virtus II.
Duke Energy committed $500 million to a major expansion of solar power in North Carolina. The company will acquire and construct three solar facilities - totaling 128 MW of capacity - including the largest solar PV facility east of the Mississippi River. Duke Energy also signed PPAs with five new solar projects in the state, representing 150 MW of capacity. Together, the eight projects will have a capacity of 278 MW. Duke Energy will own the following projects: 65 MW - Warsaw Solar Facility (developed by Strata Solar); 40 MW - Elm City Solar Facility (developed by HelioSage Energy); 23 MW - Fayetteville Solar Facility (developed by Tangent Energy Solutions). Duke Energy will purchase power from these new projects: 48 MW - Bladen County (developed by Innovative Solar Systems); 48 MW - Richmond County (developed by FLS Energy); 20 MW -Scotland County (developed by Birdseye Renewable Energy); 19 MW - Cleveland County (developed by Birdseye Renewable Energy); 15 MW - Beaufort County (developed by Element Power US).
Duke Energy Renewables will build, own and operate a 110-MW wind power project, Los Vientos V, in Starr County, Texas. Garland Power & Light, Greenville Electric Utility System and Bryan Texas Utilities (BTU) have signed 25-year PPAs produced by the project. Vestas will supply 55 2-MW turbines for the project. The project is expected to be completed in late 2015.
Google agreed to provide $145 million in equity financing for the Regulus, SunEdison's largest developed and constructed project in North America. Located in Kern County, Calif., the Regulus plant will begin operation later this year, and will supply power to Southern CaliforniaEdison through a 20-year PPA. SunEdison developed, designed, executed the structured financing and is constructing the Regulus project, which was contributed to TerraForm Power. The 737-acre 82-MW DC solar PV power plant will be comprised of over 248,000 SunEdison mono-crystalline solar PV modules. This agreement represents the 17th renewable energy investment project for Google.
AWS Truepower was hired to act as independent engineer to support the financing and construction of the Ventika I & Ventika II wind projects in Nuevo Leon, Mexico. The Ventika Wind Project consists of two 126-MW wind projects, for a total capacity of 252 MW, making it the largest wind project in Mexico at the time of financing. The total investment for the projects is $650 million, secured by co-developers CEMEX and Fisterra Energy. AWS Truepower acted as the energy consultant and engineer in the debt financing for the project, and is providing construction monitoring on behalf of the lenders and project sponsors through to substantial completion of the projects, expected in the second quarter of 2016. The Ventika I and Ventika II projects will utilize 84 Acciona AW 3000 wind turbines. Construction began in the second quarter of 2014 and commercial operation is expected by the second quarter of 2016.
PPL Montana has agreed to sell its hydroelectric facilities to NorthWestern Energy. Montana Public Service Commission voted to prepare an order approving NorthWestern Energy's request to purchase the facilities. The agreement includes PPL Montana's 11 hydroelectric power plants, which have a combined generating capacity of more than 630 MW, as well as the company's Hebgen Lake reservoir. PPL The purchase price for the hydroelectric generating facilities is $900 million in cash, subject to certain adjustments.
Sweden's Electrolux AB paid $3.3 billion in cash for General Electric's appliances business. GE's century-old household appliance business could help the Swedish company expand beyond its core European market, where growth has trailed that in North America. The deal will be financed by a bridge facility, and the company plans a rights issue to raise about 25 percent of the price after the deal's expected closing next year. General Electric put the profitable but low-margin appliance business up for sale in 2008, but talks fizzled out as the global recession took hold.
Dominion acquired two solar energy projects totaling 42 MW from EDF Renewable Energy. The acquisitions of the California projects are expected to close in 2015. The 24-MW Cottonwood project, with solar sites located in Kings, Kern and Marin Counties, has secured a 25-year PPA, interconnection agreements and will come online in the first half of 2015. The Catalina Solar 2 project, located in Kern County, has secured a 20-year PPA, an interconnection agreement and an EPC contract. The 18-MW solar energy facility is expected to enter service in the second quarter of 2015.
Bourne Energy successfully field-tested the latest version of its BackPack Power Plant (BPP) portable hydropower system in a shallow remote river in the Pacific Northwest. The BPP device - a zero-fuel power generator (one cubic meter) producing 600 W - brings locally sourced, energy dense and 24/7/365 electricity to applications never before considered for renewable power systems, such as improving overall power efficiencies for fossil fuel plants and reducing power costs for biofuel production.
Itron was selected by ERDF (Électricité Réseau Distribution France), which serves as the electricity distribution network operator in France and distribution subsidiary of the Electricité de France Group (EDF), for its Linky smart grid program. Itron will be a major supplier of Linky smart meters for the first phase of the program. The Linky project aims to improve the distribution of electricity in France with an intelligent metering and communications network. In total, ERDF will replace 35 million meters, meeting the EU directive for 80 percent of meters to be smart by 2020. With this contract, Itron will supply from 1.2 million up to 1.6 million of the Linky smart meters to be deployed by ERDF for the first phase of the program. Itron will deliver the meters from September 2015 through the end of 2016.
Siemens received an order for the turnkey delivery of the grid connection for the Dudgeon offshore wind farm. The customers are the Norwegian Utilities Statoil and Statkraft, which are jointly implementing the wind farm off the coast of the U.K. Siemens will supply the entire power transmission system, including the two transformer substations - one onshore and one offshore - for the 402-MW project. Siemens had previously received an order in August to deliver 67 wind turbines in the new 6-MW class as well as to maintain the wind farm. The grid connection is scheduled to be completed by the end of 2016, and the installation of the wind turbines is expected to begin in early 2017.
ABB won an order worth over $30 million from Public Service Electric & Gas (PSE&G) to supply gas-insulated switchgear (GIS) for substations to boost the reliability of transmission infrastructure in New Jersey. ABB's order includes design, supply and commissioning of ABB's 550 kV GIS type ELK-3, a compact and modular solution. PSE&G is spending $4 billion between 2014 and 2016 to upgrade its electricity infrastructure to meet demand for electricity.
The U.S. Department of Energy, National Energy Technology Laboratory selected a team led by Burr Energy LLC (dba Microgrid Institute) to design, simulate, and test microgrid control systems for two Maryland suburbs served by utility Pepco Holdings. DOE/NETL is expected to provide approximately $1.2 million in funding assistance for the Olney Town Center Microgrid Project during a two-year period beginning in late 2014. The project team - including Microgrid Institute, Green Energy, Schneider Electric, and FREEDM SystemsCenter at N.C. State University, with assistance and cooperation from Pepco Holdings - will design, simulate, and test advanced control systems for community microgrids at Olney and Ritchie Station Marketplace. In addition to modeling a microgrid control system for the Olney Town Center area, the project also will design and simulate a community microgrid centered on the Ritchie Station Marketplace, a multi-use commercial development near the Washington, D.C. beltway.
ComEd, in partnership with Silver Spring Networks and Accenture, hosted its SmartGridExchange Forum, bringing together leading technology and innovation companies, including Oracle, NestLabs, Home Depot, GE Energy, and the Energy Foundry, with other customer and stakeholder organizations, including the City of Chicago, Citizens Utility Board and Smart Grid Consumer Collaborative, to discuss how to leverage the smart grid to deliver increased value to consumers. Forum discussions highlighted the need to build a customer energy ecosystem that will allow businesses to develop new energy products and solutions, and allow utilities to enable this innovation.
The Southwest Power Pool (SPP) has asked to revise its membership agreement to admit three new transmission-owning members: (1) the Upper Great Plains Region (Western-UGP) of the Western Area Power Administration, which operates as a federal PMA (power marketing administration), along with (2) Basin Electric Power Co-op, and (3) Heartland Consumers Power District, a political subdivision of the state of South Dakota, identified in the proposal as the "Integrated Systems," or "IS Parties." The deal as proposed would mark a substantial territorial expansion for SPP, building out its footprint to extend all the way North to the Canadian border, and bringing under SPP operational control some 9500 miles of transmission lines, rated 115kV to 345kV, stretching across a seven-state region, including a large swath of northeastern Montana, small parts of Wyoming, Nebraska, Iowa, and Minnesota, and extending across nearly all of North and South Dakota. If approved by the Federal Energy Regulatory Commission, the move would extend SPP operations into the Western Interconnection. (See FERC Dkt. Nos. ER14-2850, & 2851, filed Sept. 11, 2014.)
In the wake of the D.C. Circuit's controversial ruling in EPSA v. FERC, which overturned FERC Order 745 on how much to pay to suppliers for bidding demand response into energy markets, and which declared demand response to be outside of FERC jurisdiction, the PJM Interconnection has issued an informal white paper throwing out ideas on how it might re-imagine the way in which market participants might bid demand response into the region's capacity market, known as the Reliability Pricing Model, or RPM. The white paper, issued on October 6, 2014 ("The Evolution of Demand Response in the PJM Wholesale Market"), attempts to circumvent the court's ruling by redefining demand response not as a "resource," but as a commitment to curtail, which would be offered by a load-serving entity. PJM then would treat demand response as a reduction in the LSE's capacity obligation, so that a demand response bid in an RPM base residual auction that clears the market would be modeled as having shifted to the left (reducing the quantity term) the RPM's downward-sloping demand curve, otherwise known as the VRR Curve (Variable Resource Requirement). In a press conference held the same day of the release, PJM General Counsel Vince Duane described the initiative not as a formal proposal, but as a sort of thought experiment, floated to guage stakeholder reaction.
NRG Energy acquired Pure Energies Group, a residential solar industry provider; Duke Energy Progress filed with FERC for approval to purchase the North Carolina Eastern Municipal Power Agency’s generating assets for $1.2 billion; Trina Solar Limited signed a share purchase agreement to sell a power plant to funds managed by Foresight Group LLP; AES entered into an agreement to sell its 49.62% equity interest in a joint venture in Turkey; Southern Power acquired the 150-MW Solar Gen 2 solar facility in California from First Solar; SolarCity is planning to launch what would be the first registered public offering of solar bonds in the US; and debt offerings from Dynegy and ComEd.
SunEdison and TerraForm Power agreed to acquire First Wind for $2.4 billion; Emera will sell its 49% interest in Northeast Wind Partners II to First Wind for $223.3 million; Calpine completed its acquisition of Fore River Energy Center from Exelon for $530 million; NorthWestern Energy closed its $900 million purchase of 11 hydroelectric facilities and one storage reservoir from PPL Montana; juwi solar sold ownership interests in a 50-MW solar facility to Dominion; Dominion acquired a 20-MW solar facility from Canadian Solar.
juwi solar (JSI) sold ownership interests in a 50-MW solar energy facility to Dominion. The project was fully developed by JSI and claims a 20-year purchased power agreement with PacifiCorp. Currently named "Pavant Solar," the project will be located in Millard County, Utah on approximately 419 acres of private ranchlands that have been leased to the project. JSI is the EPC contractor for the project and will operate the project for Dominion upon completion. Construction will commence before the end of the year and is expected to be completed by the second half of 2015.
Dominion acquired West Antelope Solar Park, a 20-MW solar energy facility, from Canadian Solar with a 20-year PPA in place. With the addition of West Antelope Solar Park, Dominion has 344 MW of solar generating capacity - about 220 MW of which are in California - in development, under construction or in operation across six states. The company's renewable portfolio also includes approximately 850 MW of capacity generated by biomass, water and wind.
The U.S. Federal Energy Regulatory Commission (FERC) approved the proposed merger of Exelon and Pepco Holdings. The companies announced their proposed merger on April 30. (Docket No. EC14-96, Nov. 20, 2014, at 146 FERC ¶61,148.) The combination of the companies will bring together Exelon's three electric and gas utilities - BGE, ComEd and PECO - with three retail utilities owned by Pepco Holdings (PHI) - Atlantic City Electric, Pepco, and Delmarva Power and Light - to create the leading mid-Atlantic electric and gas utility. The companies anticipate completing the merger in the second or third quarter of 2015.
SunEdison and TerraForm Power signed a definitive agreement to acquire First Wind for $2.4 billion. SunEdison will purchase over 1.6 GW of pipeline and backlog projects, which have been added to TerraForm Power's call right project list and are expected to be operational in 2016-2017. Included in the transaction is an additional 6.4 GW of project development opportunities.
Montana-Dakota Utilities, a division of MDU Resources Group, signed an agreement to purchase a North Dakota wind farm to be developed by ALLETE Clean Energy. The wind project, located near Hettinger, N.D., and comprised of 43 turbines producing 107.5 MW of electricity, is anticipated to be completed in December 2015. The project's cost is approximately $200 million and the purchase is subject to regulatory approvals.
Calpine completed the acquisition of Fore River Energy Center, a natural gas-fired, combined-cycle power plant located in North Weymouth, Massachusetts. Calpine purchased the 809-MW plant from Exelon for $530 million plus adjustments, or approximately $655 per kW. Built in 2003, the Fore River Energy Center features two combustion turbines, two heat recovery steam generators and one steam turbine. All of Fore River's energy, capacity and ancillary services are sold into the competitive wholesale power markets.
Emera will sell its 49 percent interest in Northeast Wind Partners II (Northeast Wind), to its 51 percent partner, First Wind Holdings (First Wind) for $223.3 million. Northeast Wind owns and operates a 419-MW portfolio of wind generating assets located in the Northeast United States. Emera acquired its interest in Northeast Wind in 2012. Emera's sale is part of a larger deal that will see 100% of First Wind sold to a third party, and is conditional on that transaction closing. Both transactions are targeted to close in Q1, 2015, subject to regulatory approvals.
NorthWestern Energy closed on the previously announced $900 million purchase of eleven hydroelectric facilities representing 633 MW of capacity and one storage reservoir from PPL Montana. NorthWestern previously announced the issuance of equity and debt securities to finance the acquisition from PPL Montana. Also as previously announced, NorthWestern expects that the 194-MW Kerr project acquired as part of this transaction will be transferred to the Confederated Salish and Kootenai Tribes of the Flathead Reservation in September 2015, in accordance with the Kerr project's federal license.
Siemens Energy Management partnered with Microsoft and FuelCell Energy to design, engineer, and install equipment and software, including a power monitoring solution, for the nation's first zero-carbon, waste-to-energy data center, in Cheyenne, WY. The project uses biogas methane produced by common waste byproducts at the nearby Dry Creek wastewater facility to power the fuel cell system. The fuel cell system then converts the biogas into electricity to power the Microsoft datacenter. Siemens engineered and installed intelligent controls, power monitoring hardware and energy management software that is helping to power the first zero-carbon data center that will be entirely independent from the grid.
NRG Home Solar opened two new California offices in Merced and San Diego, adding to the NRG footprint in the state. These offices will add to existing presence and further build on the company's energy operations around the state including the recent expansion of the NRG eVgo electric vehicle charging network. NRG Home Solar is offering solar loans for the first time to homeowners starting in California and expanding to other states. The expansion of NRG Home Solar represents the company's latest move toward expanding the amount of solar power in California and throughout the country.
SunEdison and Renova Energia S.A. created an exclusive joint venture to develop, own, and operate 1 GW of utility-scale solar PV energy to supply the Brazilian Regulated Electricity Market. Renova and SunEdison will each own a 50 percent stake in the joint venture. The joint venture plans to build and operate four utility scale solar power plants in Bahia State, Brazil, by 2017; installing 106.9 MW of solar as part of contracts awarded by the Brazilian Energy Commercialization Authority, Camara Comercializadora de Energia Electrica (CCEE). SunEdison will supply solar modules and trackers for the projects, to be assembled in Brazil, and solar plant construction will be financed by the Brazilian Development Bank (BNDES).
ABB commissioned a power solution that will control the flow of power and enhance grid stability in the State of Michigan. ABB's low-loss and eco-efficient HVDC Light technology controls the power flow between the upper and lower peninsulas of Michigan. The HVDC Light station was commissioned on schedule and handed over to the customer, American Transmission Co. (ATC). ABB designed, supplied, and installed the 200-MW back-to-back HVDC Light station in upper Michigan. An HVDC back-to-back system comprises two HVDC converters connected directly to each other, without any DC transmission line, making it possible to control the power transfer through the connection.
S&C Electric Company established an agreement with Florida Power & Light (FPL) for S&C's TripSaver II cutout-mounted reclosers to be installed throughout the utility's system to reduce momentary outages for its 4.7 million customers. The TripSaver II is an electronically controlled single-phase recloser that can self-clear transient faults on lateral lines, avoiding the need to "blink" or disturb the main feeder and other lateral lines. The first TripSaver IIs will be deployed on FPL's system in January 2015, with additional units being deployed steadily over the next five years.
American Transmission Co. (ATC) completed its work in the Zoo Interchange to relocate and erect new electric transmission infrastructure to accommodate the Wisconsin Department of Transportation's interchange expansion plans. ATC began the transmission line portion of the project in June 2013 to relocate seven overhead 138-kV transmission lines and erect 59 single pole structures to replace 58 lattice towers. Just over 11 miles of new wire were strung from south of Greenfield Avenue along the east side of USH 45/I-894 in West Allis, north to the Zoo Interchange. and then west along I-94 to ATC's Bluemound Substation. The cost of ATC's Zoo Interchange project work totaled $50 million.
Pepco will deploy Itron and ClipperCreek's electric vehicle smart charging pilot solution. The technology, which combines ClipperCreek's charging station with Itron embedded sensing technology, provides the foundation for Pepco's Demand Management Pilot Program for plug-in vehicle charging. The pilot program is to validate electric vehicle smart charging stations to support consumer engagement, demand response, time-of-use rates and embedded revenue-grade metering.
AES Southland was awarded a 20-year PPA by Southern California Edison (SCE), to provide 100 MW of interconnected battery-based energy storage, a 200-MW flexible power resource. This new capacity can deliver 400 MWh of energy and will be built south of Los Angeles at the Alamitos Power Center in Long Beach, California. This selection is an outcome of SCE's 2013 Local Capacity Requirements Request for Offer (RFO), a competitive solicitation for new power capacity in the Western Los Angeles Basin. AES was also awarded contracts by SCE for new combined cycle power plants at its existing Huntington Beach and Long Beach facilities.
Renewable Energy Systems Americas Inc. (RES Americas) developed two grid-scale energy storage projects outside of Chicago that, once completed in 2015, will serve as the largest, fully commercial energy storage projects in North America. RES Americas will develop and construct the two 19.8-MW energy storage systems, each having the ability to store 7.8 MWh of energy. The first project, Elwood Energy Storage Center, will be located in West Chicago and the second project, Jake Energy Storage Center, in Joliet. Construction is expected to begin on both projects this winter with completion by August 2015. The projects are expected to operate for at least ten years. RES Americas acquired the projects during the development phase from Glidepath Power in September of 2014.
Alstom was awarded the $1.2 million Microgrid Research Development and System Design (RD&D) project by the U.S. Dept. of Energy (DOE). Alstom stands as one of seven organizations to receive microgrid funding ($8 million total) from the DOE. The objective of this funding is to perform research, development and testing of advanced microgrid controllers capable of managing and controlling microgrid systems to improve viability, reliability and resiliency of the electric distribution grid. Alstom will research and design community microgrid systems for the Philadelphia Industrial Development Corporation (PIDC) and the Philadelphia Water Department (PWD).
Siemens, in consortium with Bechtel, was awarded an order for turnkey supply for PandaPower Funds' Stonewall Energy Project in Leesburg, Virginia. The natural-gas-fired combined-cycle plant will boast a gross installed electrical capacity of 778 MW. Commissioning of the plant is scheduled for spring 2017. For the Panda Stonewall CCPP, Siemens will deliver the power island equipment, including two SGT6-5000F gas turbines, one SST6-5000 steam turbine, two SGen6-1000A generators, one SGen6-2000H generator and two NEM duct-fired heat recovery steam generators along with the complete electrical system and SPPA-T3000 instrumentation and control system. Bechtel will be responsible for the engineering and procurement for the balance of the plant, and the installation, construction and commissioning of the facility.
Westinghouse Electric, China's State Nuclear Power Technology Corporation (SNPTC), and Electricity Generation Company (EÜAŞ) entered into exclusive negotiation to develop and construct a four-unit nuclear power plant site in the Republic of Turkey based on AP1000 reactor technology. The project also covers all life-cycle activities, including operations, nuclear fuel, maintenance, engineering, plant services and decommissioning.
Beginning in February, the U.S. Federal Energy Regulatory Commission (FERC) will hold a series of technical conferences to discuss implications of various avenues for state compliance with the "Clean Power Plan" proposed by the U.S. Environmental Protection Agency (EPA), on June 2, 2014, under Clean Air Act sec. 111(d). (EPA Docket No. EPA-HQ-OAR-2013-0602, Published at 79 Fed. Reg. 34,830, June 18, 2014.) The conferences will focus on issues related to electric reliability, wholesale electric markets and operations, and energy infrastructure. The first meeting - an all-day commission-led conference promising a national overview - will take place at FERC's Washington, D.C. headquarters on Feb. 29, 2015. FERC will follow up with three regional staff-led conferences on dates later to be announced: Eastern Region, including NY ISO, PJM, ISO-NE, Florida, South Carolina and the Southeast Regional Transmission Planning (SERTP) group (at Washington, D.C.); Central Region, including MISO, SWPP, and ERCOT (at St. Louis), and Western Region, including Cal-ISO and the entire Western Interconnection (at Denver). The national conference in particular will focus on how states, industry, and the relevant planning entities can coordinate reliability and infrastructure planning with state and regional environmental compliance efforts.
ONEOK Partners completed its acquisition of assets from Chevron affiliates for about $800 million; Dominion Resources agreed to purchase Carolina Gas Transmission from SCANA Corp. for about $492.9 million; Entergy subsidiaries acquired the Union Power Station for $948 million; ALLETE Clean Energy acquired a 108-MW wind generation facility; Duke Energy Renewables acquired the Halifax Solar Power Project from Geenex and ET Solar Energy; Pattern Energy Group acquired the 200-MW Logan’s Gap Wind project in Texas for about $113 million; An affiliate of Starwood Energy Group Global agreed to acquire a 369-MW portfolio of three natural gas facilities from Lakeside Energy; NextEra Energy and Hawaiian Electric Industries agreed to combine.
Duke Energy Renewables (Duke) acquired the Halifax Solar Power Project, a 20-MW solar project in Roanoke Rapids, N.C., from Geenex and ET Solar Energy Corp. Duke will own and operate the site. The project is located in DominionNorth Carolina Power's service territory, and the energy generated from the solar site will be sold through a 15-year agreement with the utility. The system employs 866 AE 3TL string inverters of 23.2KW AC capacity each and has about 100,000 ET Solar and Chint solar modules.
Dominion Resources agreed to purchase Carolina Gas Transmission (CGT) from SCANA Corporation for approximately $492.9 million. The transaction would include no assumption of debt and, upon closing, would be immediately accretive to Dominion's operating earnings per share. Subject to board approvals by Dominion and Dominion Midstream Partners, Dominion expects to contribute CGT into Dominion Midstream for a combination of debt and units by mid-year 2015.
ALLETE Clean Energy (ALLETE) finalized the acquisition of Storm Lake 1, a wind generation facility in Storm Lake, Iowa, adding another 108 MW to its renewable energy portfolio. ALLETE paid $15 million to NRG Energy to acquire the facility, which is adjacent to Storm Lake 2, a 78-MW wind farm purchased by ALLETE earlier this year. Both Storm Lake installations use 750 kW Zond turbines and are adjacent to each other in northwest Iowa.
Pattern Energy Group (the "Company"), acquired the 200-MW Logan's Gap Wind project in Texas, which is currently under construction, from Pattern Energy Group LP. The Company acquired the Logan's Gap Wind project for a total cash funding commitment of approximately $113 million, a portion of which will be used to pay down construction debt upon the completion of construction. The acquisition will be funded from available cash and credit facilities.
Entergy subsidiaries, Entergy Arkansas, Entergy Gulf States Louisiana, and Entergy Texas signed an agreement to acquire the Union Power Station, a highly efficient, natural gas-fired 1,980-MW generating facility. The station is owned by Union Power Partners, an independent power producer, and wholly owned by Entegra TC. The Union Power Station, which entered commercial service in 2003, consists of four combined-cycle gas-fired generating units, or CCGTs, each rated at 495 MW. Under the asset purchase agreement, Entergy Arkansas and Entergy Texas have each agreed to acquire one unit and Entergy Gulf States Louisiana has agreed to acquire two units. Entergy New Orleans will receive 20 percent of the output from the Entergy Gulf States Louisiana units via an at-cost PPA, subject to city council of New Orleans approval. The plant purchase price is $948 million, subject to adjustments.
Starwood Energy Group Global, a private investment firm focused on energy infrastructure, announced that an affiliate has entered into an agreement with Lakeside Energy to acquire Lakeside Generation, a 369-MW portfolio of three natural gas facilities, one located in Pennsylvania and two in New York. The portfolio consists of Hazleton, a 158-MW peaking facility in Pennsylvania; Syracuse, a 103-MW combined-cycle facility in New York; and Beaver Falls, a 108-MW cogeneration combined-cycle facility in New York. Hazleton sells capacity and energy into the PJM power market, which serves 13 states and the District of Columbia. Syracuse and Beaver Falls sell capacity and energy into the NYISO power market, which serves the state of New York. Financial terms of the transaction were not disclosed.
ONEOK Partners completed the acquisition of natural gas liquids pipelines and related assets from affiliates of Chevron for approximately $800 million. ONEOK Partners now owns an 80 percent interest in the West Texas LPG Pipeline Limited Partnership and 100 percent interest in the Mesquite Pipeline, which collectively consists of approximately 2,600 miles of NGL gathering pipelines extending from the Permian Basin in southeastern New Mexico to East Texas and Mont Belvieu, Texas. ONEOK Partners is the operator of both pipelines. Martin Midstream Partners LP owns the remaining 20 percent of West Texas LPG.
NextEra Energy and Hawaiian Electric Industries (HEI) announced a definitive agreement under which the companies have agreed to combine. The transaction, which is valued at approximately $4.3 billion, includes the assumption of $1.7 billion in HEI debt and excludes HEI's banking subsidiary.
Minnesota Power's Great Northern Transmission Line received another approval. FERC approved a facilities construction agreement required to build this 500-kV, 220-mile line that will run from the Canadian-U.S. border northwest of Roseau, Minn. to an expanded Blackberry electric substation east of Grand Rapids, Minn. The Great Northern Line, under development by Minnesota Power and the Manitoba Hydro subsidiary, has an anticipated in-service date of June 1, 2020. It will provide 883 MW of transmission capacity, of which 383 MW will be used to deliver hydroelectric power purchased from Manitoba Hydro to serve Minnesota Power's customers. Total project cost in the U.S., is estimated to be between $560 million and $710 million, depending on the final route of the line.
ABB designed, manufactured, installed and commissioned a 1,200-kV circuit breaker - the highest AC voltage level in the world. Once the 1200-kV ultrahigh-voltage switchgear is fully operational, it will have a switching capacity of 10,400 MW - a switch capable of turning ON' or OFF' the electricity generated by 10 large power plants or the combined average annual electrical load of Switzerland and Denmark, within milliseconds. The circuit breaker is deployed at the 1,200 kV national test station constructed by Power Grid Corporation of IndiaLimited, India's central transmission utility, at Bina in the central Indian state of Madhya Pradesh.
ITC Great Plains, in conjunction with Sunflower Electric Power and Mid-Kansas Electric, placed the V-Plan high-voltage electric transmission line into service in western Kansas. The 122-mile double-circuit, 345-kV transmission line is designed to connect eastern and western Kansas in order to improve electric reliability, enable energy developers to tap into the transmission grid, and promote economic development in the region.
General Electric announced in mid-January that it had received an order from the Tennessee Valley Authority (TVA) for two high-efficiency 7HA.02 gas-fired turbine generators to replace three coal-fired units at the 55-year-old Thomas H. Allen Fossil Plant, located in Memphis, to refurbish the Allen plant as a gas-fired, combined-cycle installation. The coal-fired units will be retired as TVA works toward a December 2018 deadline from the U.S. Environmental Protection Agency to reduce coal emissions. GE's 7HA.02 gas turbines run on natural gas and are the world's largest and most-efficient 60-hertz gas turbines. In base-load operation, a 2X1 7HA.02 combined-cycle power plant, when compared to a typical coal fired power plant, will reduce carbon dioxide (CO2) emissions by approximately 65 percent and reduce both sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions by over 95 percent. The TVA Allen plant will have the capacity to generate 1,000 megawatts of power in combined-cycle mode, the equivalent power that would be needed to supply 1 million U.S. homes.
The current coal plant was originally built by Memphis Light, Gas and Water Division and generates electricity for the Memphis area and a larger part of the western region covered by the TVA, as will the new combined-cycle plant. GE's 7HA technology offers a net combined-cycle efficiency of more than 61 percent, leading the industry with cleaner, reliable and cost-effective conversion of fuel to electricity. The gas turbines are expected to be delivered to the site in August 2016 with commercial operation planned for May 2018.
With the TVA project, 15 HA units have been ordered by customers around the world. In addition to the United States, GE's H-class technology has been embraced by customers in Japan, the United Kingdom, Brazil, South Korea, France, Russia, Germany and Turkey.
Siemens was awarded an order for turn-key erection of a gas-fired, combined-cycle power plant, to be located in Plock, Poland, some 100 kilometers northwest of Warsaw, marking the company's first-ever turnkey project in Central Europe outside of Germany for installation of its Siemens H-Class gas turbine. The customer for the 596-MW plant will be PKN Orlen, Eastern Europe's largest mineral oil company. Commissioning of the plant is scheduled for the end of 2017. Siemens will build the single-shaft plant turnkey, and will supply the main components; an SGT5-8000H gas turbine, the heat recovery steam generator, an SST5-5000 steam turbine with an SCon-2000PF condenser, an SGen5-3000W generator, the electrical systems and the SPPA-T3000 I&C system. Siemens will also be responsible for plant maintenance and service for a period of around 12 years.
CODA Energy announced the full interconnection and operation of the largest behind the meter lithium-ion energy storage system in the Los Angeles basin. The 1,054kWh / 510kW system was developed under a contract with South Coast Air Quality Management District and co-funded through California's Self-Generation Incentive Program. The project demonstrates the scalability of CODA Energy's peak shaving product architecture by managing demand charges for its facility headquarters. CODA began installations at the beginning of the year and already has nearly 3 MWh of energy storage installations with manufacturing, retail, and public sector customers.
Europe's largest battery-storage project was officially opened by the Department for Energy and Climate Change at Leighton Buzzard in Bedfordshire, England. S&CElectric Europe, Samsung SDI and Younicos collaborated to deploy the technology onto a United Kingdom Power Networks substation. The fully automated 6MW/10MWh smarter network storage project will assess the role of energy storage in cost-effectively supporting the UK's Carbon Plan, and will save more than $9.4 million on traditional network-reinforcement methods. S&C Electric Europe is the lead supplier to the $29.2 million project. Berlin-based Younicos contributed custom-built intelligent software architecture and components.
Eos Energy Storage demonstrated its grid-scale battery system at Pacific Gas & Electric's (PG&E) smart grid lab in San Ramon, Calif., with the support of a $2.1 million award from the California Energy Commission. For the project, the company is partnering with PG&E, the Electric Power Research Institute, Lawrence Berkeley National Lab (Berkeley Lab), Stem, and ETM Electromatic.The project will test Eos's Aurora product as the company ramps up manufacturing to deliver MW-scale batteries in 2016. The first of these systems, the Aurora 1000|4000, is a containerized DC battery system that can provide one MW for four hours of continuous discharge to shave system peaks and defer costly transmission and distribution upgrades. The battery also offers fast-responding surge capability to balance power fluctuations associated with intermittent renewable generation.
Puget Sound Energy and Renewable Energy Systems Americas signed agreements to cooperate on launching an innovative battery storage project in Whatcom County, Washington. Electricity will be stored in battery modules that are as large as 40-foot shipping containers and will be capable of providing up to 18 hours of power during an outage
for the town of Glacier, Washington. PSE is working with Washington State's department of commerce in developing this pilot project. In July, the state's Department of Commerce Clean Energy Fund awarded PSE $3.8 million to engineer and construct a 2-MW, 4.4-MWh lithium-ion battery system at the existing PSE Glacier substation near State Route 542. Construction is expected to begin as early as June 2015.
Alstom, and Singapore's Nanyang Technological University, collaborated to design, develop and deploy MicroGrid Power Mix Management (MPMM) solution in the context of the Renewable Energy Integration Demonstrator - Singapore (REIDS) initiative. The REIDS initiative, a first in the region will encompass the construction of a microgrid to manage and integrate electricity generated from multiple sources including solar, wind, tidal, diesel, as well as energy storage and power-to-gas solutions.
GE Global Research and GE Energy Consulting, along with National Grid, the Department of EnergyNational Renewable Energy Laboratory, and Clarkson University partnered on a research project to improve the reliability and resiliency of electricity delivery in northern New York. Fueled by a $1.2M grant from the DOE's office of electricity delivery and energy reliability and a $300,000 investment from GE, this project will allow for the development of an enhanced microgrid control system (eMCS) designed to keep the town's electricity system up and running for several days should it become disconnected from the main power station.
Eaton will provide electrical engineering services and power distribution equipment for the construction of a 5-MW solar microgrid system in Annobon Province, an island off Equatorial Guinea in West Central Africa. The microgrid has battery storage and is designed to supply reliable and predictable power to meet the off-grid community's energy demand. It will be the largest self-sufficient solar microgrid project in Africa. Eaton was contracted to optimize the electrical power distribution equipment for the project by MAECI Solar, a division of Management and Economics Consulting.
FERC issued an order approving construction of Constitution Pipeline's proposed pipeline to increase natural gas supply to New York and New England markets, subject to certain conditions that will ensure the protection of natural resources. FERC on Dec. 2, 2014 issued its certificate of public convenience and necessity for the 124-mile Constitution Pipeline. Assuming timely receipt of all remaining necessary regulatory approvals, Constitution Pipeline would begin construction as early as the first-quarter next year in order to help meet growing natural gas demand in New York and New England by the winter of 2015 or 2016.
Southern Company subsidiary Southern Power plans to develop a 131- MW PV solar project in Georgia. The electricity and associated renewable energy credits will be sold to three Georgia electric membership corporations. Southern Power has selected First Solar to be the EPC contractor for the facility. Construction of the plant is scheduled to begin in September 2015, and the project is expected to achieve commercial operation in the fourth quarter of 2016.
Algonquin Power & Utilities achieved commercial operation of the 24-MW Phase I St. Damase Wind Project (St. Damase I) in Quebec under the terms of the PPA with Hydro Quebec. The project was completed on time and on budget. St. Damase I consists of 10 Enercon E-92, 2.35 MW wind turbine generators. The total capital cost of the facility was approximately $49 million, net of the Canadian Renewable and Conservation Expense tax incentive that was used to partially fund the project.
IKEA plans to increase the solar array atop its Detroit-area store that opened eight years ago in Canton, MI. In September, IKEA began work on a 44,000-square-foot expansion to the store, atop which new panels will be installed beginning spring 2015, with a completion by summer. The 40,000-square-foot solar addition will consist of a 240.9-kW system built with 765 panels, and will produce 287,490 kWh more of electricity annually for the store.
TerraForm acquired 21 U.S. distributed generation solar power plants from SunEdison; Emera closed the sale of its 49 percent interest in Northeast Wind Partners II to First Wind Holdings; Alterra Power completed its sale of its Fallon, Nevada geothermal facility to an affiliate of Cyrq Energy; Accenture agreed to acquire Structure, a provider of consulting, system integration and customized solutions and services to energy and utility clients; and others.
Pacific Gas and Electric (PG&E) and automaker BMW are teaming up to test the ability of electric vehicle batteries to provide services to the electric grid. If successful, the pilot program could pave the way for utility payments that could stimulate further customer purchases of electric vehicles. PG&E selected BMW to manage a minimum of 100 kW of electric demand on PG&E's system. BMW will help PG&E manage power demand on its grid in two ways. First, the automaker will create a large energy storage unit at the BMW Group Technology Office in Mountain View, using lithium-ion batteries that were once installed in MINI E demonstration vehicles. Second, BMW will enlist up to 100 customers of its new BMW i3 electric vehicles to take part in the BMW i ChargeForward Program.
The California Independent System Operator (ISO), the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) unveiled a comprehensive roadmap to assess the current market environment and regulatory policies for connecting new energy storage technology to the state's power grid. Technology to store energy is vital to optimizing the grid, increasing renewable energy sources and reducing greenhouse gas emissions. The top concerns of industry stakeholders are implementing a process for promoting existing products and driving new ones to market; understanding and addressing connection of storage devices to the grid; and reducing costs and setting up fee structures for the new technology.
MidAmerican Energy completed work on four of the five wind farms that make up its Wind VIII project, which features some 1,050 MW of proposed wind generating capacity, scattered across the state of Iowa. The three wind farms completed in 2014 - Lundgren in Webster County, Macksburg in Madison County and Wellsburg in Grundy County - account for a total of 511.4 MW of wind generation capacity, to go along with the 44.6 MW of generation capacity at the Vienna II wind farm in Marshall County, which was completed in 2013. The final piece of the Wind VIII project - the 495-MW Highland wind farm in O'Brien County - will be finished by the end of 2015.
NRG Renew, a wholly owned subsidiary of NRG Energy and SunShare, are partnering to finance and build 8.2 MW of community solar projects along the Front Range of Colorado. Once completed and online in mid-2015, the project will be one of the largest operating community solar portfolios in the nation, comprised of five ground-mount sites, four in the Denver area and one in nearby Colorado Springs. The renewable electricity generated through this alliance will be available to residential, municipal and commercial subscribers spanning five counties. Subscribers will enter into a 20-year PPA with SunShare and will earn credits toward their energy bill.
Babcock & Wilcox Vølund A/S, the Denmark-based subsidiary of Babcock & Wilcox, was awarded contracts by Margam Green Energy Ltd. for more than $200 million to engineer, procure and operate a state-of-the-art biomass power plant in Margam, Wales. B&W Vølund's consortium partner, Interserve Construction Ltd., will build the plant. The plant will be designed to burn 335,000 tons of wood waste biomass annually and generate approximately 40 MW of electricity. The facility also will be capable of using municipal waste as a fuel source in the future. Construction is scheduled to be completed by the second quarter of 2017. The project was booked in the first quarter of 2015.
Florida Power & Light (FPL) plans to build substantially more solar energy capacity as part of its ongoing strategy of advancing clean energy while keeping electricity affordable for customers. Before the end of 2016, FPL intends to build three new solar PV power plants that are being designed to complement other major system improvements, which include the retirement of some of the company's oldest fossil fuel-burning units and the continued investment in clean, fuel-efficient, 24-hour power generated from U.S.-produced natural gas and zero-emissions nuclear fuel.
sPower, developed an agreement with Hecate Energy, a leading power developer, to develop and own/operate solar PV projects. The first joint initiative is the sale to sPower of a 162-MW portfolio comprised of three projects named Beacon 1, Beacon 3 and Beacon 4. The utility scale projects, near Mojave, Calif., in Kern County, will be designed and built by Hecate, then jointly owned and operated by sPower and Hecate. Groundbreaking is scheduled for Q3 2015, with COD from March to July 2016. The Beacon projects have 25-year PPAs with the Los Angeles Department of Water and Power.
Minnesota Power completed commissioning the latest phase of its Bison Wind Energy Center. The 205-MW expansion makes it the largest wind farm in North Dakota. All 64 turbines within the 35-square-mile boundaries of Bison 4 are now generating renewable energy, which is delivered to the company's customers via a 465-mile direct current transmission line linking Center, N.D., and Duluth, Minn. In total, the nearly 500 MW produced by Bison's 165 turbines rank it as North Dakota's largest wind farm in terms of electric generating capacity.
RES America Developments entered into a 20-year PPA with Wolverine Power Supply Cooperative (Wolverine) for 114 MW of wind energy and associated renewable energy credits in the Thumb of Michigan. The wind power will be sourced from the Deerfield Wind Energy project, which is located in Huron County, Michigan. RES Americas developed and will construct the project and Wolverine, which is owned by and supplies wholesale electric power to seven members, will be the recipient of the 114 MW of electricity generated by the project. Deerfield Wind Energy is scheduled to reach commercial operation by December 31, 2016.
Emera closed the sale of its 49 percent interest in Northeast Wind Partners II (Northeast Wind) to First Wind Holdings (First Wind) has closed. The proposed sale was announced in November 2014. Northeast Wind owns and operates 419 MW of wind generating assets located in the northeast United States. First Wind purchased Emera's interest in Northeast Wind for $223.3 million. Emera's carrying value for its 49 interest was $204.4 million as of December 31st, 2014.
Accenture entered into an agreement to acquire Structure, a provider of consulting, system integration, and other and customized solutions and services to energy and utility clients. The transaction will expand Accenture's capabilities in smart grid solutions, especially grid operations, as well as energy commodity trading and risk management (CTRM). Terms of the transaction were not disclosed, and the acquisition is subject to regulatory review and other customary closing conditions.
TerraForm acquired 21 U.S. distributed generation solar power plants comprising 26 MW from SunEdison through a series of transactions valued at $47 million. The 21 power plants have long-term contracts with an average remaining life of 20 years. The portfolio is geographically diverse, with plants located in seven U.S. states, and comes with counterparties that include municipalities, schools, and businesses. TerraForm has funded the purchase of these call right projects with cash on hand.
Dominion closed on the acquisition of the CID Solar Project near Corcoran, Calif., from EDF Renewable Energy. The companies announced the purchase and sale agreement in June 2014. The 20-MW facility completed the conditions of the acquisition and closed on Dec. 11, 2014. It commenced operations on December 22. The project provides power to the San Francisco-based electric utility Pacific Gas and Electric (PG&E) under a 20-year PPA. Terms of the transaction are not available.
SunEdison and Omnigrid Micropower (OMC Power) signed a framework agreement to develop 5,000 rural projects, representing 250 MW of electricity, throughout India over the next three to five years. Building upon the 36-kW micro power plants OMC Power has already put in place across India as part of a sustainable and reliable rural electrification plan, this partnership will bring electricity to 10 million additional people. SunEdison and OMC can help telecommunication organizations meet their regulatory requirements and provide energy to local communities while still going off-grid.
TheMicrogrid Alliance (MGA) and the Association for Demand Response & Smart Grid (ADS) joined forces, with MGA becoming part of ADS. The Microgrid Alliance was established in early 2014 to bring together companies and individuals involved in or interested in microgrids to exchange information and expertise, and collaborate on activities. ADS, founded in 2004, is seen by many as the leading voice for the demand response and smart grid community, creating content, cooperative member activities, and events, both for ADS members and the broader DR and smart grid community.
GE received an order from the Tennessee Valley Authority (TVA) to supply two high-efficiency 7HA.02 gas turbine generators for the new combined-cycle Allen plant. The new plant will replace three coal-fired units that are being retired as TVA works toward a December 2018 deadline from the U.S. Environmental Protection Agency (EPA) to reduce coal emissions. The TVA Allen plant will have the capacity to generate 1,000 MW of power in combined-cycle mode, the equivalent power that would be needed to supply 1 million U.S. homes. The gas turbines are expected to be delivered to the site in August 2016 with commercial operation planned for May 2018.
Siemens received an order for three SGT6-5000F gas turbines from Peru. The turbines will be used in the project Nodo Energético del Sur - Planta N° 2 Región Moquegua consisting of three simple-cycle power plants. The customer is the power utility EnerSur, the contractor being Técnicas Reunidas and JJC. The commercial operation date is scheduled for March 2017. The three new plants will be installed in Ilo, which is a seaport in the Moquegua region, the southern part of Peru. The three simple cycle plants will together have a capacity of 600 MW when fired with fuel oil. With a total of more than 9,000,000 hours of fleet operation this gas turbine achieves peak values for reliability and continuous operation with highest performance values in its class.
Bechtel partnered with Westinghouse Electric to provide decontamination and decommissioning services for nuclear power plants throughout the United States. The alliance will provide a full range of services: pre-shutdown planning, licensing, project development and management, dismantling, demolition, waste handling, and site closeout - with a central focus on the safe and efficient handling of radioactive materials. Bechtel has performed services on 88 percent of the U.S. nuclear power fleet. Westinghouse provides fuel, services, technology, plant design, and equipment for the commercial nuclear electric power industry.
Appalachian Power plans to rebuild the existing South Bluefield-Wythe 69-kV transmission line and add additional improvements to strengthen the transmission infrastructure in Southwest Virginia. The approximately 21-mile transmission line also will be upgraded to standards more common with a line of 138 kV. from the current 69 kV to 138 kV standards to provide enhanced system reliability, operational flexibility and allow for future economic development in the area. Appalachian proposes to begin work in 2016 and complete it in 2018. The project will require approvals from the Virginia State Corporation Commission and the Public Service Commission of West Virginia.
Alstom recently released its latest demand response management system (DRMS) to NV Energy to provide new, advanced functions for the utility's demand response (DR) programs. The latest version of e-terraDRBizNet provides advanced functions to interface with both proprietary and industry standards-based customer devices; this includes the likes of Cooper Power Systems, Carrier/United Technologies, and Corporate Systems Engineering for existing operational load management systems, and BuildingIQ's advanced commercial and industrial building control system for industry standard 'OpenADR'-based systems. Alstom's latest e-terraDRBizNet also provides a new open device interface to manage automated demand response device types such as EcoFactor, NV Energy's newest residential air conditioning control technology and energy efficiency platform.
The Tennessee Valley Authority (TVA) and DuPont partnered to generate power and steam at TVA's Johnsonville site in Humphreys County, Tenn. The two companies recently agreed on a plan to convert an existing, limited-use combustion turbine at Johnsonville into a highly efficient combined heat and power (CHP) plant. With TVA retiring the last four coal-fired units at Johnsonville by the end of 2017 under its clean-air agreement with the Environmental Protection Agency, a new steam source had to be found. The new, more efficient, 87-MW, gas-fired CHP facility will serve to generate power as needed for TVA customers as well as steam for DuPont's manufacturing operations when it comes online in January 2018.
Consumers Energy selected Accenture to deploy new mobile workforce management (MWFM) software from Ventyx, an ABB company, to help field workers improve safety, productivity and customer experience. Accenture will implement the latest release of Service Suite with optimized, automated dispatching, for schedulers, dispatchers, field crews and supervisors. This will replace Consumers Energy's legacy mobile workforce management system.
Landis+Gyr and DONG Energy, an energy group in Northern Europe, have signed an agreement for a meter data management system (MDMS) which will be integrated into the utility's existing IT architecture. The move comes as Dong Energy prepares to start the replacement of its entire metering infrastructure in the residential sector. Over the next four years, Landis+Gyr will deliver its Gridstream MDMS to DONG Energy. Between 2017 and 2020, DONG Energy will replace its entire residential meter base with smart meters, totaling one million metering end-points.
Siemens secured an order of 157 wind turbines for three projects in South Africa's Northern Cape from Mainstream Renewable Power. The 2.3-MW Siemens G2 turbines will be installed at the wind power plants Khobab, Loeriesfontein 2 and Noupoort, with a combined generation capacity of 360 MW. The new contract includes a service and maintenance agreement for a period of 10 years. All projects will be equipped with the Siemens SWT-2.3-108 wind turbine with a rotor diameter of 108 meters and towers with a hub height of 99.5 meters. Turbine installation will start in August 2015.
PSE&G recently put two new landfill solar farms in service as part of the utility's Solar 4 All program. The 10.14-MW Parklands Solar Farm in Bordentown, N.J. and the 11.18-MW Kinsley Solar Farm in Deptford, N.J. were brought online in late December 2014 and will supply enough grid-connected solar electricity to power about 3,500 average-size homes annually. These are the two largest centralized solar projects built to date by PSE&G, creating a portfolio of 26 solar farms and 174,000 pole-attached solar units that supply more than 101 MW of electricity.
Enphase Energy announced a strategic partnership agreement with MyLight Systems. Under the terms of the deal, the Enphase Envoy, the intelligent networking hub of the Enphase System, will be integrated into the MyLight monitoring system and will become the exclusive monitoring technology for PV arrays embedded with MyLight's advanced energy management solution. Solar PV arrays equipped with the Enphase system provide reliable solar energy production data that when coupled to the MyLight System enable smart energy monitoring capabilities that optimizes energy consumption. Through the use of a central control unit and smartplugs (energy management adaptors) installed inside a structure, MyLight's patented algorithms analyze a user's electricity consumption patterns and optimizes their energy usage to match their solar energy production profile.
Florida Power & Light (FPL) and Daytona International Speedway (DIS) plan to install commercial-scale distributed solar power at the self-styled "World Center of Racing," complementing the ongoing $400 million DAYTONA Rising redevelopment project. The electricity generated will help power the Speedway's operations and FPL's 4.7 million customers via the grid. The project's total generating capacity is expected to be approximately 1.7 MW, making it one of the largest distributed solar installations in Florida. FPL plans to begin construction on the solar installation by this fall, with the goal of connecting it to the grid by the end of the year.
Ormat Technologies' second phase of its McGinness Hills geothermal power plant located in Lander County, Nevada has begun commercial operation. Since February 1, 2015, the complex has sold electricity under an amended PPA (purchase power agreement) with NV Energy, which extends through December 2032. The second phase broke ground on March 2014, following confirmation of performance of the first phase of McGinness Hills, which had been operational since June 2012. The project received favorable project financing terms under a $140-million load drawn under the Department of Energy's loan guarantee program.
Dominion Virginia Power will develop multiple large-scale solar projects totaling 400 MW of electricity. All projects will be built in Virginia with the involvement of Virginia-based companies and are expected to be operational by 2020. Together, these solar facilities are anticipated to be capable of generating enough electricity at peak capacity to power 100,000 homes.
Southern Power acquired two solar PV projects located in Georgia from Tradewind Energy, totaling 99 MWs: (1) the 80-MW Decatur Parkway Solar Project and (2) the 19-MW Decatur County Solar Project. The electricity and associated renewable energy credits (RECs) generated by the 80-MW facility will be sold under a 25-year PPA with Georgia Power, which will purchase the energy generated from the 19-MW project under a 20-year PPA (with Southern Power retaining the RECS, which it may sell to third parties). Both projects are expected to achieve commercial operation in late 2015.
NRG Renew entered an agreement to help Kaiser Permanente achieve its goal to reduce greenhouse gas emissions. Utilizing as much as 70 MW of on-site solar from NRG Renew, Kaiser Permanente would achieve the top ranking of on-site installed solar capacity among U.S. healthcare companies. NRG Renew will implement a single-brand, multi-site distributed solar program at as many as 170 separate sites. Electricity generated by the solar installations will be sold to Kaiser Permanente under a long-term PPA.
Iberdrola USA entered into a definitive agreement to acquire UIL Holdings (UIL) and create a newly listed publicly traded company in the U.S. The combination would create a larger, more diversified power and utility company, with seven regulated electric and gas utility subsidiaries: Iberdrola USA's New York State Electric & Gas, Rochester Gas & Electric (RG&E) and Central Maine Power (CMP), and UIL's United Illuminating (UI), Southern Connecticut Gas (SCG), Connecticut Natural Gas (CNG) and Berkshire Gas (BGC). The combined entity would have a rate base of approximately $8.3 billion and expects to invest $6.9 billion in regulated electric and gas infrastructure and other capital expenditures over the next five years.
Chesapeake Utilities will acquire Gatherco,a natural gas infrastructure company, pursuant to a merger agreement, dated Jan. 30, 2015. Upon consummation of the transaction, Gatherco will merge into Aspire Energy of Ohio, a wholly-owned subsidiary of Chesapeake Utilities. The transaction is expected to close during the second quarter of 2015, but as of this writing was still subject to final approval by Gatherco shareholders. The transaction has an aggregate value of approximately $59.2 million.
Canadian Solar entered into a definitive agreement with Sharp Corporation to acquire Recurrent Energy, for approximately $265 million. Once completed, the acquisition of Recurrent will increase Canadian Solar's total solar project pipeline by approximately 4.0 GW - to a total of 8.5 GW - and boost its late-stage project pipeline by approximately 1.0 GW, to 2.4 GW. The transaction was expected to close prior to the end of the first quarter of 2015, subject to customary closing conditions and regulatory approvals.
Bidgley, an energy analytics SaaS provider serving utility customers, and Commonwealth Edison (ComEd), launched a pilot to test Bidgely's new HomeBeat Energy Monitor and Web & Mobile engagement solution with ComEd customers to provide retail electric customers with personalized energy reports detailing how and when they use energy in their home. The project forms part of ComEd's SmartGridExchange, a collaboration between ComEd, entrepreneurs, technology start-ups, universities and customers to explore and design new products and offers that utilize the intelligence of the smart grid and smart meter.
Southern California Edison (SCE) selected Opower for a strategic multi-year partnership. SCE will leverage the Opower platform, Opower 6, to deliver energy management solutions to all customer classes. Opower 6 includes a broad set of upgrades to Opower›s platform that provide analytics to all Opower clients. In addition to this upgrade, Opower recently announced the release of a new Customer Care solution that uses real-time communications and powerful analytics to improve customer satisfaction and lower cost to serve for utilities.
Exelon Generation will add 195-MW of electric generation capacity at Exelon's existing Medway (Mass.) generating facility to help meet future energy needs in New England. The units will operate primarily during peak periods and will run primarily natural gas, but with back-up dual-fuel capability to run on ultra-low-sulfur distillate fuel oil. Both generating units will be equipped with the latest emissions control technology and will meet all applicable federal and state environmental regulations. Construction is expected to begin in 2017 and be completed by mid-year 2018.
ABB won an order worth around $35 million from Belgian electricity transmission system operator Elia, to provide gas-insulated switchgear and shunt reactors, thus helping to stabilize and expand the country's power grid to accommodate more wind energy. The shunt reactors increase the energy efficiency of power transmission by improving power quality and reducing transmission costs. The order was booked in the fourth quarter of 2014. As part of the order scope, ABB will design, supply and commission 420-kV gas-insulated switchgear and 130 megavolt-ampere shunt reactors to be installed in three 380-kV substations.
Panda Power Funds entered into a joint venture with Sunbury Generation LP to develop, finance, construct and operate a 1,000-MW gas-fired, combined-cycle power project near Shamokin Dam in Snyder County, Pennsylvania. The 30-acre Panda Hummel Station power facility will occupy part of the 192-acre Keystone Opportunity Expansion Zone at the site of the recently retired Sunbury coal-fired power plant. The plant is expected to enter commercial operation in the second half of 2017.
Operating through an affiliate, Starwood Energy Group Global completed a purchase of the Quail Run Energy Center, a combined-cycle gas-fired generating facility in Odessa, Texas. Starwood assumed ownership and began operating the power plant in January. The electric power generating facility began commercial operations in 2007 and claims a nominal capacity of 550 MW. The facility provides electric power to the Electric Reliability Council of Texas (ERCOT). The deal marks the ninth since 2006 by which Starwood affiliates have either built or acquired a new gas-fired generating plant.
Veolia and Alstom signed a turnkey contract for construction of a complete flue gas desulfurization (FGD) facility at Veolia's CHP plant (combined heat and Power) in Lodz, Poland, to be completed by early 2017. The FGD facility will employ Alstom's NIDTM semi-dry desulfurization technology. The order comes almost one year after Veolia and Alstom signed a contract for another FGD facility in Poland at Poznan.
Pacific Gas and Electric (PG&E) asked state regulators for permission to build an estimated 25,000 EV chargers at sites across its service area in Northern and Central California. If approved, the program would mark the largest deployment of EV charging stations in the country. The chargers would be located at commercial and public locations, including multi-family dwellings, retail centers, and workplaces. PG&E proposes to own all of the infrastructure, but contract with third parties to build, install and maintain the chargers and manage customer billing. The utility expects that the program will take about five years to complete following approval by the California Public Utilities Commission.
GE's Digital Energy business will provide Reykjavik Energy, Iceland's largest utility company, with its PowerOn Advantage advanced distribution management system (ADMS). The addition of GE's grid software will enable Reykjavik Energy to reduce operational costs while also improving functional capabilities. Reykjavik Energy's electrical distribution network serves more than half of Iceland's population. By implementing GE's PowerOn Advantage ADMS, Reykjavik Energy expects to be able to access critical grid information on a continuous, real-time basis.
Lockheed Martin and Dominion Resources have co-developed a new smart grid technology called VirtuGrid to enable remote detection of power outages for faster mapping and response. VirtuGrid enables data, including voltage, power, energy readings, GPS location, phase- and circuit-connectivity, to be sent from the remote location to the substation over the same path as the power. The technology facilitates control and timing of remote communications with multiple types of communication networks using very low bandwidth capacity.
Open Systems International (OSI) was awarded a contract by Seattle City Light to implement a new energy management system (EMS). This new EMS system is based on OSI's monarch (multi-platform open network architecture) platform and includes OSI's next-generation, .NET based graphical user interface, large scale SCADA functionality, generation management system applications, transmission management applications including advanced transmission security monitoring analysis functionality, state estimation, contingency analysis and operator training simulator.
FirstEnergy expects to invest about $225 million in 2015 on distribution and transmission infrastructure projects in Monongahela Power's (Mon Power) 34-county service area, primarily in north-central West Virginia. Major projects scheduled for 2015 include transmission enhancements to reinforce the system and support economic growth, constructing new distribution lines, and inspecting and replacing utility poles and other equipment. About $97 million of the budgeted total will be for transmission-related projects owned by the Trans-Allegheny Interstate Line Company, a FirstEnergy transmission affiliate. In addition, Mon Power expects to invest an additional $145 million in capital expenditures in 2015 related to generation.
ABB won orders worth around $900 million to supply on-shore HVDC converter stations at each end of a new undersea HVDC transmission line that will serve as the first-ever interconnection between the Norwegian and German power grids. The link will be 623 km long, making it the longest HVDC connection in Europe. It is scheduled to go into commercial operation in 2020. The contract also includes a five-year service agreement. ABB will design, engineer, supply, and commission two 525-kV 1400-MW converter stations, using its voltage sourced converter technology, called HVDC Light. One station will be situated near Tonstad in southern Norway and the other near Wilster in northern Germany. As part of the project, ABB will also design, manufacture and install a 525-kV mass impregnated cable system in the German sector, which will include 154-km of subsea and 54-km of underground cable.
Waverley Labs and the Energy Production and Infrastructure Center (EPIC) developed a risk management solution based upon a research and technology collaboration focused on modeling relationships between cyber-attacks and the electric and physical infrastructures associated with the power grid. During the past year, researchers in EPIC's Duke Energy Smart Grid Laboratory working with Waverley Labs conducted a systematic analysis of risks and associated threats to power transmission systems to identify critical points of failure. The collaboration leveraged advanced knowledge processing that integrated IT systems and cyber security data with operational and physical data. It resulted in a new and innovative solution that will enable energy companies to model consequences and quantify business impact associated with each risk.
Pacific Gas and Electric was selected by the California Independent System Operator to build, own and operate two new electric substations in California's Central Valley and South Bay. The new high-voltage substation at Wheeler Ridge Junction will help improve electric service reliability in Bakersfield, especially in the hot summer months when demand for power is higher. The substation projects will need to undergo an approval process through the California Public Utilities Commission.
PSEG Long Island embarked on a federally funded, three-year reliability and resiliency project to further strengthen the electric grid across Long Island and in the Rockaways. More than $729 million of federal recovery funds were secured for the Long Island Power Authority via an agreement last year between Governor Andrew M. Cuomo and the Federal Emergency Management Agency (FEMA), under the FEMA 406 Mitigation Program. The impact that Superstorm Sandy and the Nor'easter that followed had on the transmission and distribution system was severe, resulting in power outages to all of the service territory's 1.1 million customers.
APR Energy commissioned an expansion of its power plant in Myanmar, providing the Myanmar Electric Power Enterprise (MEPE) with a guaranteed minimum of 102 MW of power generation. Based in Kyaukse, in the Mandalay region, the expanded power plant is one of the largest thermal plants in Myanmar, providing electricity to over six million people. It features the newest generation CAT low-emission mobile gas power modules and runs on natural gas.
Toshiba will participate in the Levenmouth Community Energy Project in Fife, Scotland, a 4-year project to investigate the potential of hydrogen as a future fuel. The project will run from 2015 to 2020 in a redevelopment area of the Methil Docks in Methil, Fife. Electricity generated by wind and solar power will be used to power a hydrogen producing water electrolysis system, and the hydrogen will be stored and used as a fuel source for hybrid commercial vehicles (HCV) powered by fuel cells and diesel engines. In the project, Toshiba will deploy its hydrogen energy management system (H2 EMS), which is designed for production and storage of hydrogen based on electricity supply and demand forecasts. Toshiba will also handle overall system control, allowing it to collect operating data from the entire system, including the H2 EMS, water electrolysis systems and HCV, for utilization in future projects.
M&A
FuelCell Energy reported the closing of its definitive agreement to sell a 1.4-MW fuel cell power plant project at the University of Bridgeport to NRG Energy. Concurrent with the closing, a subsidiary of NRG, NRG Yield, acquired the project; the first-ever fuel cell project placed into any yieldco. The University of Bridgeport will buy the electricity and heat produced by the fuel cell power plant under a multi-year PPA. FuelCell Energy will perform operation and maintenance services for the installation over the multi-year term of NRG Yield's PPA with the University. The power plant construction is mechanically complete and commercial operation is expected in March 2015.
Renewable Energy Trust Capital (RET Capital) closed on over $200 million in financing for four solar projects in the U.S. and Canada. RET Capital secured a total of CAD $115MM in financing to acquire the 12.6-MWDiscoveryLight and 14.2-MW FotoLight projects from Canadian Solar. RET Capital also closed two additional non-recourse debt financings (totaling $121MM) that were related to the acquisition of two solar facilities in California representing more than 44 MW DC. RET Capital also secured a total of $86.2MM in financing to acquire the 31.26-MW McHenry Solar PV Plant in Modesto, California. The company purchased the solar facility from K Road Power Holdings LLC, closing the financing and acquisition concurrently. RET Capital also closed a non-recourse term loan with KeyBank National Association to acquire the 13.1-MW Heber Solar PV project in Imperial County, California. KeyBank provided a total credit facility of $35.2MM.
Florida Power & Light (FPL) filed a petition with the Florida Public Service Commission to request approval to acquire the Cedar Bay Generating Plant, a 250-MW coal-fired facility located in Jacksonville, Fla., which has sold power at wholesale to FPL under long-term contract since 1988. Upon taking ownership FPL plans immediately to terminate the contract and reduce the plant's operations by 90 percent, with the intention of eventually phasing the plant out of service. In its filing, FPL proposes to purchase CBAS Power, the indirect owner of the plant, from CBAS Power Holdings, for a price of $520.5 million. FPL would then terminate the purchased-power contract.
Nuclear
The U.S. Nuclear Regulatory Commission (NRC) approved Westinghouse Electric's testing approach for the Westinghouse small modular reactor (SMR) design. The NRC told Westinghouse that it has granted a safety evaluation report for the licensing topical report that the company submitted in April 2012 for agency review and approval. The Westinghouse SMR is a 225-MW integral pressurized water reactor with all primary components located inside of the reactor vessel. The Westinghouse SMR is derived from the AP1000 plant, which received a design certification amendment from the NRC in 2011. Eight AP1000 units are currently under construction at four sites in the United States and China.
Renewable Energy
GE announced the construction of two service centers focused on the operation and maintenance of wind turbines in Brazil. The support centers will be staffed by GE technicians and engineers at wind farms operated by Casa dos Ventos. Along with partners, they have three different wind farms under construction.
Philip Morris USA (PM USA) is the latest company to partner with Dominion Virginia Power under the Solar Partnership Program by hosting what will become the largest solar installation in Virginia to date. Dominion is currently installing about 8,000 ground-mounted solar panels at the PM USA Park 500 facility in Chesterfield County. When completed, the 2,450-kW solar array will generate enough electricity under optimum conditions to power 500 homes. The energy generated by the solar panels is delivered to the power grid. Standard Solar was selected as the EPC company.
REPREVE RENEWABLES (RR) was chosen to provide the agricultural and business development services for the University of Iowa's Biomass Fuel Project. The Biomass Fuel Project aims to assess and improve the environmental aspects of new and existing biomass crops and fuels. REPREVE RENEWABLES' giant miscanthus, a perennial grass, will be used as fuel in the university's power plant. This project will increase the power plant's renewable fuel consumption and reduce the use of coal, all part of the University of Iowa's sustainability goal of 40 percent renewable energy outlined in its 2020 Vision. REPREVE RENEWABLES will employ the Accu Yield System to plant and establish giant miscanthus.
Babcock & Wilcox's (B&W) Denmark-based subsidiary, Babcock & Wilcox Vølund A/S, was awarded contracts totaling more than $220 million to design, manufacture and operate a biomass power plant in Rotherham, South Yorkshire, England. B&W Vølund's consortium partner, Interserve Strategic Projects, will construct the plant for the developer, Copenhagen Infrastructure Partners. The Rotherham Biomass Plant will feature a B&W Vølund-designed multi-fuel boiler with a DynaGrate fuel combustion system, a dry flue gas desulfurization system (dry FGD) and will burn waste wood to generate approximately 40 MW of electricity. The contracts also call for B&W Vølund to provide operations and maintenance services for an initial term of 15 years once the plant is commissioned. Plant completion is scheduled for third quarter of 2017.
SunEdison will construct new solar plants in West Texas to supply the City of Georgetown with 150 MW of solar power for 25 years. The SunEdison solar plants will be interconnected in 2016, and will provide over 9,500 GW-hours of energy through 2041. Upon completion, SunEdison expects to offer this project for investment to TerraForm Power. The PPA is one of the largest solar agreements in the Electric Reliability Council of Texas jurisdiction, and represents the largest utility scale solar agreement that SunEdison has signed in Texas to date. SunEdison will construct the project and provide financing. Operation and maintenance of the solar power plants will be performed by SunEdison Services.
Aimed at providing affordable, sustainable housing and a supportive community for several hundred disabled, chronically homeless people in Austin, TX, the Community First! Village is a project pioneered by Mobile Loaves & Fishes. With the assistance of Gridmates and CLEAResult, the 27-acre master-planned community will leverage the first Internet platform designed to eliminate energy poverty by enabling peer-to-peer energy sharing during one of the most energy intensive periods of the year.
ABB and Samsung SDI signed a memorandum of understanding to promote microgrid solutions globally. The two companies will establish a global commercial alliance to develop and market modular and scalable microgrid solutions, utilizing lithium-ion batteries for energy storage. ABB will provide technologies for electrification, control optimization, stabilization and consulting services. Samsung SDI will provide the batteries and the battery management system.
