4 October 2011

Exelon acquires 230MW AV Solar Ranch project from First Solar

Exelon Corp of Chicago, IL, USA has acquired Antelope Valley Solar Ranch One, a 230MW photovoltaic (PV) project under development in northern Los Angeles County, CA, from cadmium telluride (CdTe) thin-film photovoltaic (PV) module maker First Solar Inc of Tempe, AZ, USA, which is building and will operate and maintain the project. Construction has started, with the first portion of the site expected to come online in late 2012 and full operation planned for late 2013.

The AV Solar Ranch One project is being built on 2100 acres of fallow farmland near Lancaster, CA, in the Antelope Valley area of the Western Mojave Desert, about 80 miles north of Los Angeles. The transaction expands Exelon’s geographic presence into California, which the firm describes as an attractive solar market with an ambitious renewable energy policy and some of the best PV resources in the world.

AV Solar Ranch One will use First Solar’s FS Series 3 PV Module and deploy its tracking system on a portion of the facility. The technology will increase electricity output by tilting the solar panels to track the daily path of the sun. The project will also feature inverters with voltage regulation and monitoring technologies that provide more stable and continuous power, increasing the plant’s efficiency and reliability.

When fully operational, AV Solar Ranch One is expected to be one of the world’s largest PV solar projects, with about 3.8 million solar panels generating enough electricity to power the equivalent of 75,000 average homes per year. The project has a 25-year power purchase agreement (PPA) - approved by the California Public Utilities Commission - with Pacific Gas & Electric for the full output of the plant.

Exelon expects the total investment of up to $1.36bn to be accretive to earnings beginning in 2013 and accretive to free cash flow starting in 2013. The project is value accretive, and will have stable earnings and cash flow profiles due to the PPA. Exelon expects to invest up to $713m in equity in the project through 2013.

The US Department of Energy’s Loan Programs Office finalized a loan guarantee of up to $646m to support project financing for AV Solar Ranch One. Advances under the loan are contingent on the satisfaction of various conditions. No regulatory approvals are needed for Exelon's acquisition of AV Solar Ranch One from First Solar.

The project should deliver economic benefits to the local community and the state of California, including the generation of state and local tax revenues and the creation of up to a peak of 400 construction jobs and up to 15 ongoing operations and maintenance positions, with an emphasis on hiring workers from the local area.

Exelon says that the project demonstrates how its Exelon 2020 business and environmental strategy delivers value through low-carbon energy investments. When fully operational, AV Solar Ranch One will displace about 140,000 metric tons of carbon emissions per year (equivalent to taking about 30,000 cars off the road). Plus, it will generate electricity with no water use, no air emissions and no waste production. Exelon's existing solar assets include Exelon City Solar on the South Side of Chicago (the USA’s largest urban solar power plant), which was completed in 2010.

The transaction follows Exelon’s announcement on 28 April that it plans to merge with Constellation Energy of Baltimore, MD, USA, combining two of the industry’s leading clean-energy generation fleets. With the addition of AV Solar Ranch One, their combined solar portfolio will include about 350MW in operation and under construction. Constellation is a competitive electricity supplier and solar project developer and owns five solar projects in California totaling more than 32MW.

The acquisition of AV Solar Ranch One adds to the nearly $5bn that Exelon plans to invest in clean-energy projects between 2010 and 2015. These also include uprates to Exelon’s nuclear fleet and the acquisition of John Deere Renewables (now Exelon Wind) in 2010, which added 735MWs to its renewable energy portfolio.

Tags: First Solar Thin-film photovoltaic CdTe

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