Agile Energy of San Bruno, California just signed an MOU with utility American Electric Power (NYSE: AEP) on a massive 50-megawatt solar project in Ohio. When completed, it will be one of the globe's largest photovoltaic (PV) projects and could hold the title for the largest PV project in the U.S. The project will likely use about 239,400 panels in the solar array.
The project is named Turning Point Solar. It's actually 49.9 megawatts and will be built on 500 acres of reclaimed strip-mined land that was used by the Central Ohio Coal Company between 1969 and 1991.
This win for Agile, a new name in solar project development, comes ten months after raising $13.2 million in working capital from Good Energies, a global renewable energy investor with a massive greentech portfolio.
The project is early in its development so there are still missing pieces in terms of suppliers and financing. But the panel supplier is Isofoton and the tracker supplier is Prius Energy, both Spanish firms that are setting up manufacturing facilities in the Buckeye state, creating more than 300 permanent manufacturing jobs.
Ohio's advanced energy portfolio standard calls for 25 percent by 2025 with a carve-out for solar power, so this enormous project goes a considerable way toward helping to meet that goal.
I spoke with Agile’s co-founders, Glen Davis and Robert Morgan. The pair have spent their careers in the power industry, first at AES Corporation for a combined 32 years and then at Ausra. Agile is focused on developing grid-connected, ground-mounted PV or CSP solar projects in North America with generating capacity over 5 megawatts. The firm has a near-term pipeline consisting of 400 megawatts of solar projects.
As the developer, Agile's role is to act as both conductor and stage hand in order to get the project ready for construction. This includes negotiating the lease, doing the land and environmental permit work, setting up the interconnection application, selecting an EPC contractor, working with a design engineering firm and setting out the construction plans so that all of the details of the project are laid out clearly and ready to be financed. A 50-megawatt project of this type will require in the neighborhood of $200 million in order to complete construction.
Agile is entering into the U.S. utility-scale solar market at a time when a number of positive factors are converging:
- An extension of the Investment Tax Credit (ITC) through 2016
- Rebounding credit markets
- A global reduction in solar module prices
- Increasingly supportive regulations for renewables
- The continued challenges associated with siting and permitting non-renewable power plants.
Agile is working with Ohioan venture firm New Harvest Ventures on this enterprise. Agile provides capital and the solar and project development know-how, while New Harvest, which originated the project, provides local knowledge and, crucially, the human network and political connections required for a project of this scope.
"It is a big job creator," in the words of David Wilhelm of New Harvest Ventures. “This project is compelling on several fronts. Turning Point Solar will bring renewable energy to Ohioans at a reasonable rate, utilize reclaimed mine land in an innovative way, and bring new construction and manufacturing jobs to Appalachian Ohio.”
Under the terms of the MOU, AEP intends to ink a Power Purchase Agreement (PPA) to take all of the energy produced by the plant over the next 20 years. Michael Morris, the CEO of AEP, is a supporter of the project and AEP has expressed interest in investing once the project is developed. The project would not be financeable without AEP as the customer.
When the project has received financing, Agile could still maintain management of the project.
Once this saga of a project is finally developed and eventually financed and built, it has to perform and produce power at a competitive price. What's the right price? While Agile was not disclosing price details for the project, they acknowledge that solar power in Ohio will be more expensive than in the Southwest. “It’s a function of how much fuel (i.e., sunshine) we have to work with,” said Davis. “In Ohio, there’s less sun than in California and more than in Canada, and pricing will reflect that.”