Capital Dynamics, Terra-Gen secure financing for large-scale California solar-plus-storage projects

By Andy Colthorpe
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California Flats BESS site earlier this year, with the solar farm in the background. Apple will be the project’s off taker. Image: Apple.

Financing has been secured for two projects that will add nearly a gigawatt-hour of battery storage at California solar power facilities this year, by renewable energy company Terra-Gen and private asset management firm Capital Dynamics.

Terra-Gen said on Monday (2 August) that financing has been completed for the first phase of what looks set to be the world’s largest solar-plus-storage project, Edwards Sanborn Solar Storage facility, in California’s Kern County. As work began on the project in December 2020, Terra-Gen and its construction partner Mortenson gave figures of 1,118MW of solar PV and 2,165MWh of battery storage for its planned capacity.

However, in Monday’s press release the developer said the near-term phases of the project franchise will include 760MWac of solar and 2,445MWh of energy storage, with the first 735MWh of battery storage expected to come online in the third quarter of this year. At the moment, the largest battery storage project under construction to be integrated with solar at the same site is thought to be Florida Power & Light’s 409MW / 900MWh Manatee project.

By the second quarter of 2022, the first 1,501MWh phase of battery deployment should be online, along with 346MW of solar. Subsequent phases will be financed later this year, with expected commissioning dates for the second half of 2022 and the beginning of 2023.

Terra-Gen said financing includes US$804 million of senior secured credit facilities, which comprises construction and term loans worth US$400 million, a US$328 million tax equity bridge facility and a US$76 million construction and revolving letter of credit facility. JP Morgan led the tax equity financing while Deutsche Bank led construction and term financing.

Along with Mortenson, which is the full engineering, procurement and construction (EPC) partner for the Edwards Sanborn project, Terra-Gen is working with battery module suppliers LG Chem and Samsung as well as solar module supplier First Solar. Already employing more than 500 people onsite, around 750 people will work on the project at its construction peak.

Apple’s 240MWh California BESS gets tax equity investment

Meanwhile, Capital Dynamics said that it has secured tax equity investment on a 60MW / 240MWh battery energy storage system (BESS), which is being retrofitted to a 280MWac solar PV plant and for which the off taker is consumer tech giant Apple.

Capital Dynamics’ California Flats BESS is being constructed at the site of the solar PV plant of the same name at Jack Ranch, on land owned by the Hearst Corporation in Central California’s San Luis Obispo and Monterey counties. The batteries will store surplus solar generated in the daytime for dispatch to the grid during peak periods to contribute to the state’s need for reliable electricity, bidding into the California energy market on Apple’s behalf.

California Flats Solar went into commercial operation in 2018 and like Edwards Sanborn Solar Storage, uses First Solar's thin-film solar PV modules, while it is understood Tesla Megapacks will be used for the energy storage. It was Apple that first announced the BESS' construction in April this year. 

Retrofitting battery storage to the solar plant helps further California’s decarbonisation objectives, Capital Dynamics clean energy infrastructure vice president Henry Deng said. Last week, California governor Gavin Newsom’s administration published its roadmap for achieving the state’s goal of 100% clean electricity by 2045 or earlier. The plan included energy storage as one of five key “pillars” of this energy transition.

The investments came from Goldman Sachs and US Bank, while the project will be built by Arevon, a Capital Dynamics-affiliated renewable energy company that recently brought online the asset management firm’s Saticoy battery storage project. Saticoy, a 100MW / 400MWh BESS, was built after local community groups in Oxnard, California, objected to plans for a natural gas peaker plant.

“Financing that enables energy storage assets to be paired with solar farms allows renewable power to be shifted to times of peak load and simultaneously strengthens and stabilises the grid,” Goldman Sachs sustainable investing business VP Vivek Kagzi said, also referring to a number of other such deals his business has executed with Capital Dynamics.

“Solar and storage investments like this are a tangible way to measure reductions in carbon footprint and combat climate change, and that will have a positive impact on our environment for years to come ,” Philip Hatchett, an account manager with the environmental finance team of US Bank tax credit and community development subsidiary USBCDC said.

The project is expected to be completed later this year, Capital Dynamics said in a press release last week. 

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