Over the last few years we have seen big power companies and asset managers move whole-hog into solar ownership, swooping up the projects formerly owned by independents and trading and consolidating among themselves. And as the scale of solar deployed in the United States grows, the deals just keep getting bigger.
A new high was reached yesterday afternoon, when Con Edison announced its plan to buy 943 MW of operational solar plants and a 38 MW wind farm from Sempra, in a $1.54 billion transaction. The deal still needs approval from the Department of Energy and the Federal Energy Regulatory Commission, but Con Edison expects it to close by the end of the year.
This will double Con Edison’s existing fleet of wind and solar projects to 2.6 GW, including 2.2 GW of solar, and turn it into the second-largest owner of solar plants in the United States.
Con Edison is familiar with many of these projects, as they include 379 MW-AC of solar projects that it owns jointly with Sempra, in addition to those that Sempra owns all of. The projects are all located in California, Arizona and Nevada, with the exception of the Broken Bow wind farm in Nebraska. These projects are also located near the Western portion of Con Edison’s existing fleet.
The 981 MW-AC of projects all hold long-term power contracts, with terms mostly of 20-25 years. Most of the off-takers are utilities, with a smattering of contracts with municipalities, the military, or power authorities which purchase on behalf of utilities and munis, and Sempra notes that the stability of the off-takers is beneficial in ensuring reliable cash flows from these projects.
ConEdison plans to fund the acquisition via borrowing $825 million in long-term, non-recourse debt and issuing $715 million in equity, and will also assume $576 million in debt tied to these projects. The company expects the transaction to be accretive to add to its bottom line on an earnings per share basis after 2020.
This does not appear to be the end of Con Edison’s ambitions in solar, as the press release mentions that the company will also acquire development rights for an un-specified volume of solar and energy storage projects.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: firstname.lastname@example.org.
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.