Wells Fargo has closed its first tax equity investment into a solar project paired with battery storage, a large-scale plant being built in New Mexico, US.
The financial services group has already made more than US$12 billion of tax equity investments in over 500 transactions for wind, solar and fuel cell projects.
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The latest investment, which Wells Fargo announced yesterday, is in the Arroyo Solar and Storage project in New Mexico, which combines 300MWac of solar PV with a 150MW / 600MWh battery energy storage system (BESS).
As reported by Energy-Storage.news in September, the Arroyo project is being developed by DE Shaw Renewable Investments (DESRI), a developer, owner and operator of long-term contracted renewable energy assets. This is also DESRI’s first solar-plus-storage project involvement.
DESRI acquired the project from original developer Centaurus Renewable Energy and closed debt financing. The project is central to a plan by utility company Public Service Company of New Mexico (PNM) to procure nearly a gigawatt of energy from solar and energy storage facilities and replace San Juan Generating Station, a coal-fired power plant that is closing down.
With the utility targeting reaching 100% emissions-free electricity by 2040 and New Mexico as a state targeting the same by 2045 through its 2019 Energy Transition Act, PNM has signed two separate off-take contracts for the Arroyo project’s solar and storage systems’ output.
Three other solar-plus-storage projects will fill the gap left by San Juan’s retirement, PNM said in October 2020, with Arroyo the largest.
The 300MWac solar PV plant will be constructed by Sundt Construction. The array will use NEXTracker’s tracking systems, while the BESS will comprise Tesla Megapacks, which the Silicon Valley (possibly soon to be Texas) tech company is commissioning as well as supplying. Local company Affordable Solar Installation will construct the BESS.
Operations and maintenance (O&M) will be provided by Tesla and SOLV Energy, which was formerly a subsidiary of Swinerton Renewable Energy until it was acquired by private equity firm American Securities a couple of months ago.
“Arroyo is a keystone project for our companies, given the incorporation of energy storage as well as the important role that the facility will play in New Mexico’s energy transition,” DESRI chief commercial officer Thomas de Swardt said.
Wells Fargo itself is targeting net zero greenhouse gas (GHG) emissions by 2050, which will include projects it finances. It also plans to deploy US$500 billion in financing for sustainable businesses and projects by 2030, the company claimed.