Utility Public Service Company of New Mexico’s (PNM) plan to procure energy from 950MW of solar and storage facilities by 2022 and replace its retiring 562MW San Juan Generating Station coal plant has been handed a boost.
Arroyo Solar and Storage Project, a 300MWac solar PV plant with 150MWac / 600MWh of colocated battery storage in New Mexico’s McKinley County, will be the largest of the new clean energy resources PNM will lean on.
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PNM has signed two separate off take contracts for the plant’s solar and storage output. The utility is targeting reaching 100% emissions-free electricity by 2040.
Yesterday, DE Shaw Renewable Investments (DESRI), a developer, owner and operator of long-term contracted renewable energy assets said it has acquired the project from original developer Centaurus Renewable Energy and also closed debt financing.
Centaurus had brokered the long-term deals with PNM and in July closed a US$70 million construction bridge loan facility in order to make progress on the project before DESRI bought it.
The project is expected to go into full commercial operation in the fall of 2022, with the first phase coming online in June next year. A part of the global investment firm DE Shaw Group, DESRI has focused on the solar PV and wind energy sectors to date, totalling more than 6GW of aggregate capacity including the purchase of several solar farms from First Solar in the western US.
Arroyo represents DESRI’s first colocated solar-plus-storage project. It will be built using Tesla’s Megapack battery storage technology which will be assembled and integrated by local firm Affordable Solar Installation.
The solar farm will use NEXTracker solar PV tracking technology and will be constructed by Arizona-headquartered general contracting firm Sundt Construction. Electrical Consultants Inc will design the project’s substation and switchyard and one of its subsidiaries, EPC Services Company will built that infrastructure. Tesla, and Swinerton Renewable Energy subsidiary SOLV, will perform operations and maintenance (O&M).
“Incorporating battery storage in solar projects has the potential to change the landscape of the renewable energy industry going forward, and we’re excited to offer storage capabilities to PNM as part of the Arroyo project,” DESRI CEO David Zwillinger said.
DESRI’s acquisition and construction financing was led by Nord/LB, and MUFG Union Bank, Sumitomo Mitsui Banking, National Bank of Canada and Societe General acted as additional joint lead arrangers on the transactions.
Utility PNM said in an October 2020 filing with the regulatory New Mexico Public Regulation Commission that the San Juan coal plant will be replaced with four projects including Arroyo Solar and Storage, with Arroyo the largest and the 50MW PV + 20MW BESS Jicarilla Solar 1 the smallest.
“As PNM continues our path to 100% carbon-free electricity, we eagerly await the first of the large scale batteries and associated solar to come on our system,” PNM generation vice president Tom Fallgren said.
“This project demonstrates New Mexico’s leadership throughout the nation in reducing our carbon footprint.”