January 11, 2023
Wells Fargo, MUFG and Silicon Valley Bank have completed US$260 million of construction financing for Leeward Renewable Energy’s Chaparral Springs solar-plus-storage project in California.
The developer announced the securing of financing and tax equity commitments for Chaparral Springs yesterday (10 January). The project in Kern County, California, will combine 174MW of solar PV and a four-hour 88MW/352MWh battery energy storage system (BESS) once operational in September 2023.
The debt portion was issued under the Loan Market Authority’s Green Loan Principles. JP Morgan has provided US$29 million in tax equity investment and has committed to investing another US$114 million at commissioning.
Chaparral Springs will provide its energy under previously-announced 15-year power purchase agreement to Community Choice Aggregation (CCA) groups Peninsula Clean Energy and Valley Clean Energy. Energy-Storage.news reported on both agreements at the time. CCAs are not-for-profit, community-owned electricity providers.
Leeward said the financing announced yesterday is an extension of its previously-announced financing for its Rabbitbrush solar-plus-storage project, also in Kern County.
Chris Loehr, senior vice president of finance said: “This milestone follows the successful development and operation of our Rabbitbrush Solar project, which is adjacent to Chaparral Springs, and further demonstrates our commitment to excellence and ability to deliver on our pipeline of contracted projects. We value the continued support from our financial partners as we continue to drive our sustainability mission in all we do.”
California has an ambitious target to be completely carbon neutral by 2045. As it adds more renewables to achieve this goal, an imbalance between plentiful solar generation in the day and peak demand well into the evening has emerged, the so-called ‘Duck Curve’.
Battery storage projects are being brought online to mitigate this and the state now has around 4.5GW online as per grid operator CAISO’s most recent figures for 1 December, 2022. Like Chaparral, most new large-scale projects are four-hour systems in order to qualify for selling energy to utilities under Resource Adequacy, CAISO’s framework for ensuring there is enough supply to meet demand.
CAISO recently adopted market reforms that will make it easier for battery storage assets to play into energy markets by accounting for state of charge, as reported by Energy-Storage.news.
