NRG Energy (NYSE: NRG), through its wholly-owned subsidiary NRG Solar, announced July 15 the acquisition of a 25.65-MW (AC) solar project on the island of Guam from Quantum Guam Power Holdings LLC, a wholly-owned affiliate of Quantum Utility Generation LLC (QUG).
Guam, a U.S. island territory in the western Pacific Ocean, currently relies on expensive imported residual fuel oil and diesel to generate 100% of its power requirements. In order to help mitigate Guam’s exposure to fuel price volatility future environmental regulations, NRG Solar will construct, own and operate the solar project which will sell all of its power output to the Guam Power Authority (GPA), the island’s sole electric utility, under two 25-year power purchase agreements (PPA).
According to GPA estimates, the project is expected to generate enough clean solar power during the PPAs to offset consumption of almost 2 million barrels of residual fuel oil and diesel, representing total fuel cost savings to GPA of over $300m and net savings of approximately $100m.
“NRG Solar has been focused on reducing the levelized cost of solar energy in both the utility and distributed solar markets,” said Tom Doyle, President and CEO of NRG Solar. “Our focus has been on driving down the balance of system costs through in-house engineering, procurement and construction, as well as through creative financing strategies on well-developed projects. The result of this effort provides us with opportunities like the Guam project which was successfully-developed by QUG and is now ready for NRG Solar to assume long-term ownership of the project.”
“GPA has been an excellent partner during the development phase of Guam’s first utility-scale renewable project,” said Sean O’Donnell, CFO of QUG. “We are pleased to bring the development phase to a successful close and facilitate the transfer of the project to a highly-capable renewable energy company like NRG Solar to continue with construction and operations.”
NRG Solar has more than 2,000 MW of photovoltaic and solar thermal projects in operation, under construction or in development across the southwestern U.S.
Quantum Utility Generation is an operating company based in Houston, Texas, that was established to invest in the North American power generation space, and is co-funded by: Quantum Energy Partners, a private equity fund with more than $6.5bn in commitments; the Canada Pension Plan Investment Board, which manages $183bn on behalf of the Canada Pension Plan; and management. QUG’s current portfolio interests include about 1,400 MW of conventional generating assets and several wind and solar development projects.