Residents of Los Angeles will be getting solar power from the desert until the year 2049 for around 5.2 cents per kilowatt-hour (kWh). When calculating for the present value, what money in 2049 is worth in today’s dollars and an interest rate of 2.5%, the effective cost of that electricity will be 2.5¢/kWh. This is not an unprecedented value, just the new reality of solar power.
8minutenergy has announced that Capital Dynamics will be acquiring the equity interests of the 121 MW-DC Springbok 3 solar farm in Kern County, California. The project has a 27-year power purchase agreement (PPA) with the Southern California Public Power Authority (SCPPA) on behalf of its participating member, the Los Angeles Department of Water and Power (LADWP). The PPA includes the option for a three-year extension.
The terms of the power purchase agreement (236-page .pdf) note that all delivered energy, environmental attributes and capacity rights will be sold for 5.197¢/kWh. Any excess energy will be sold for 1.819¢/kWh.
The project will break ground later this year, and commercial operation is slated for June 2019.
The document also notes, see below image, that if the project is sold for cash a buyer, then it will have certain minimum prices associated with it base upon the date the project is being sold. After thirty years of work, the project could potentially be sold for 25¢ per watt.
The contract also notes “daily delay damages” of $17,104 if the seller fails to achieve any key milestone dates noted in the contracts.
The project is the third installation in the Springbok cluster, joining the 137 MW-DC Springbok 1 project, and its 191 MW-DC Springbok 2 project. Both of these projects signed contracts with the City of Los Angeles as well.
Capital Dynamics has been very busy purchasing clean energy assets. Through the goup’s Clean Energy Infrastructure (CEI) fund, it owns greater than 3.1 GW in the development, construction and operation stages across 28 projects. This includes the assets is acquired when it purchased 8point3 Energy Partners, the yieldco between FirstSolar and Sunpower. In August it announced the final close of its Clean Energy and Infrastructure VII JV LLC fund. The fund will be focused on purchasing utility-scale renewable energy projects in the United States, with capital commitments of $1.2 billion.
And for your morning viewing pleasure, here is a time lapse video of Springbok 2 being built by 8minutenergy from its solar projects page.