Solar

More

Innergex pivots to US solar as wind subsidy nears its end

Developer is evaluating a number of potential sites for large PV farms in Texas as it looks to ride the coming US solar 'wave'

Renewables developer Innergex is pivoting its focus to solar and away from wind in the US market, conceding that time has all but run out for new wind projects under the production tax credit (PTC) subsidy.

While Innergex’s 3GW operating portfolio remains heavily concentrated on its home market of Canada and skews towards wind and hydropower, the US has become the company's most important development market, thanks in part to its 2017 acquisition of rival developer Alterra Power and its US pipeline.

And these days, utility-scale solar is quickly becoming the star of Innergex's show.

“There are still a few windows for wind, but the next big thing in the US will be solar,” chief executive Michel Letellier told analysts on Thursday.

“This is the next wave of development in the US, as the PTC usually used for wind is slowing down, and the ITC for solar is still alive and kicking for the next few years.”

“The idea ... is to take advantage of this wave.”

While the wind PTC is phasing down along a 100%-80%-60%-40% path for new projects from 2016-19 (with a four-year build window for most projects once qualified), the solar ITC does not begin phasing down until 2020 – and will remain in place permanently for commercial projects at a reduced level.

Enel unveils 497MW solar project in Texas, the state's largest

Read more

Letellier revealed that Innergex’s under-construction Foard City wind project in Texas will likely be reduced in size from around 350MW to 325MW, due to concerns about the number of turbines from a nearby Air Force base.

Foard City will now be built in two phases rather than one, but Innergex remains confident the full project will be completed by early 2020 at the latest, in plenty of time to remain eligible for the PTC.

Beyond Foard City, Innergex’s 320MW Boswell Springs wind project in Wyoming appears stuck as things currently stand, unable to interconnect to the grid until 2024. The project had been expected to reach completion in 2020, and has an off-take deal with Warren Buffett-owned utility group PacifiCorp.

“There is value in Boswell” but no guarantee it will get built in time for the PTC, Letellier says.

“It’s a great location with only one landowner, a huge space, and the ability to interconnect on the [transmission] highway to California.”

“We made the (C$1.1bn) acquisition of Alterra based on either Foard City or Boswell being a successful development,” Letellier says. “Foard City is going well, and we’re happy with the return we’re going to get with it. If we can get something out of Boswell we’ll be even happier.”

Meanwhile, as Innergex works through the issues with its remaining US wind projects, the Quebec-based developer has turned its sights to solar in a big way.

Last July Innergex acquired the 315MW Phoebe project in Texas from Longroad Energy Partners, currently being built by First Solar and due for completion by the end of 2019. Phoebe has a 12-year power-purchase agreement with Shell Energy North America.

Innergex then followed up by buying the 260MW Hillcrest solar project in Ohio from developers Open Road and MAP, and last month secured 25-year PPAs to build 45MW of solar and 180MWh of battery storage in Hawaii – breaking new technological ground for the company.

Hawaii to add 1GWh of storage in landmark procurement

Read more

“I think Hillcrest is the next project we’ll be able to start construction on,” Letellier says.

Innergex plans to move beyond acquiring early-stage solar projects and into “greenfielding” its own developments in-house.

The company has been evaluating a dozen locations in Texas, and has settled on four or five “very good” sites with the potential for interconnection where it’s now looking to expand its land holdings, Letellier says.

All of the Texas projects would be in the 150MW-250MW range, and Innergex may look to bring on joint venture partners, he says. Innergex is one of a number of developers feeding a growing solar boom in Texas, already by far the largest US wind market.

Innergex remains active as a developer in Canada, France and Latin America, but all are lower priorities right now than the US market. “We want to make sure we have a good part in the development of the solar industry of the US,” Letellier says.

Read Next


Largest US wind project pushed back years but ‘still set for PTC’

Chokecherry and Sierra Madre project has revised its construction schedule, aiming for turbine installation in 2022-26

14 Feb 14:56 GMT

Latest