CPS Energy finalizes power and jobs deal with Korean solar manufacturer

CPS Energy and OCI Solar Power have signed an agreement to construct 400 MW of solar power that will bring several manufacturing facilities that produce panel components and create 805 jobs in San Antonio.

CPS Energy President and CEO Doyle Beneby signed a 25-year power purchase agreement and economic development pact with OCI Solar Power. The first-of-its kind, manufacturing-to-generation contract creates the largest in the nation solar power project among municipal utilities, and will put Texas into the top five U.S. solar producing states.

The project will provide enough electricity for nearly 70,000 local households, or about 10% of San Antonio’s customers. The first 50 MW of the project will be online by mid-2013.

“Leveraging our buying power to secure competitive generation resources makes good business sense for several reasons. With 400 MW of solar, we attain zero-emissions energy to help hedge against environmental regulations; provide much needed generation during peak demand; and obtain affordable renewables while enhancing job opportunities for our customers and economic development for the entire region,” Beneby said.

This is OCI Solar Power’s first project in Texas, which is estimated to have a projected annual economic impact of $700m for Greater San Antonio.

The final deal also delivers: OSI’s corporate headquarters in San Antonio; an estimated $100m high-tech U.S. manufacturing operation in south San Antonio; 800-plus professional and technical jobs with an annual payroll of nearly $40m; 75% of those jobs will be in the renewable energy sector; $700m in annual economic impact; $1bn in construction investment; and, a 25-year power purchase agreement.

“Pursuing our low emission strategy is all about incremental risk,” as CPS moves more aggressively into solar, Senior Vice President of Generation Michael Kotara previously told GenerationHub.

CPS has found partners for power purchase agreements, which it has used to acquire more than 1,000 MW of wind power now operating or under development

OCI Solar Power created a consortium of partners to deliver 400 MW of solar to CPS Energy throughout the 25-year life of the agreement. According to the contract, members of the OCI Solar Power consortium will build facilities in San Antonio to produce components for solar power generation such as modules, trackers and inverters used to supply the North American market.

The anchor manufacturer in the consortium is Nexolon America LLC. It will invest $100m and create 800 jobs. Workers needed to construct the facility are above and beyond that total.

With 717,000 electric customers and 6,000 MW of generation capacity, CPS wants to reach 1,500 MW of renewables by 2020, or about 25% of generation capacity.

Declining panel costs and a more attractive load generation profile – late afternoon peak generation matches load better than maximum wind power at night – led CPS to more aggressively pursue solar power.

OCI Solar Power is majority-owned by OCI Enterprises Inc., which is the North American subsidiary of OCI Co. Ltd., headquartered in Seoul, Korea.

Nexolon America LLC is a new San Antonio-based company that manufactures N-type high efficiency solar panels. It is a subsidiary of Nexolon Co. Ltd., a Korean solar value chain manufacturer and supplier, headquartered in Seoul, Korea.