15 December 2011

MidAmerican acquiring 550MW Topaz Solar Farm from First Solar

Global energy provider MidAmerican Energy Holdings Company of Des Moines, Iowa has entered into definitive agreements to acquire the Topaz Solar Farm from First Solar Inc of of Tempe, AZ, USA, which makes cadmium telluride (CdTe) thin-film photovoltaic (PV) modules and provides engineering, procurement & construction (EPC) services.

Incorporating modules made at First Solar’s factories in Perrysburg, OH, and Mesa, AZ), the 550MW photovoltaic power plant being built in San Luis Obispo County, CA will have the capacity to generate enough energy to power about 160,000 average California homes (displacing about 377,000 metric tons of CO2 per year - equivalent to taking about 73,000 cars off the road). The more than $2bn Topaz solar farm is one of the two largest PV projects in the world (both being built by First Solar).

Pacific Gas and Electric Company will purchase the electricity from Topaz under a 25-year power purchase agreement, helping California to meet its mandate to generate 33% of its power from renewable sources by 2020.

As well as constructing the plant, First Solar has agreed to operate and maintain the Topaz project for MidAmerican. Construction began in November and is expected to be complete by early 2015. The project will create about 400 construction jobs and 15 ongoing operations and maintenance jobs. According to an economic benefits study by The Brattle Group and California Polytechnic State University, the project is estimated to infuse $417m into the local economy (most of which will be generated during construction, with the remainder over the project’s minimum 25-year operating period).

“MidAmerican is the No. 1 owner of wind-powered energy generation among US rate-regulated utilities. Adding solar energy to our generation portfolio is a strategic move to invest in yet another renewable energy source,” says chairman, president & CEO Greg Abel. “Our entry into the solar energy industry expands our renewable energy footprint and will help meet current and future energy needs in a manner that reflects our ongoing commitment to environmental respect and cost-effective generation,” he adds. “This project also demonstrates that solar energy is a commercially viable technology without the support of governmental loan guarantees and reflects the type of solar and other renewable generation that MidAmerican will continue to seek to add to its unregulated portfolio.”

Previously, on 30 June, the US Department of Energy (DOE) offered conditional commitments for loan guarantees totaling $4.5bn to support three First Solar solar generation facilities, including a partial loan guarantee of $1.93bn for subsidiary Topaz Solar Farms LLC. The $1.93bn in loans was to be funded by a syndicate of institutional investors and commercial banks led by lead lender The Royal Bank of Scotland plc.

However, on 22 September First Solar said that Topaz would not meet the statutory end-September deadline to receive the federal loan guarantee, and that it was in talks regarding the sale and financing of the project with potential buyers utilizing a different transaction structure that does not require a DOE loan guarantee. This followed a lawsuit against the Topaz Solar Farm project filed by North County Watch and Carrizo Commons. The lawsuit was dismissed in early October after Topaz committed to the decommissioning and restoration of habitat at the project site after 35 years of operation, placing a conservation easement on the land and providing an endowment for managing the land in perpetuity, and providing enhanced communication, collaboration, research and monitoring measures (including a Biological Working Group).

The closing of MidAmerican’s acquisition of Topaz is contingent on the satisfaction of certain closing conditions specified in the sale agreement, including required actions with respect to the project’s permits and electrical interconnection arrangements. The project sale is not contingent on MidAmerican obtaining debt financing.

Tags: First Solar Thin-film photovoltaic CdTe

Visit: www.midamerican.com

Visit: www.firstsolar.com