The North Carolina Utilities Commission on June 16 approved a March 2 application by Duke Energy Carolinas LLC (DEC) for a certificate of public convenience and necessity authorizing the construction of a 6-MW (ac) ground-mounted solar photovoltaic facility on a portion of a 116-acre parcel owned by DEC (called the Woodleaf Site) in Rowan County, North Carolina.
The facility size of approximately 6 MW (ac) supports parent Duke Energy’s (NYSE: DUK) efforts to meet the 300-MW procurement goal established in the joint Request for Proposals (RFP) issued by Duke Energy Progress LLC (DEP) and DEC in February 2014. Additionally, the timing of the project will allow DEC to leverage the federal Investment Tax Credit. The facility will also allow DEC to continue to diversify its generation portfolio by incorporating additional renewable energy resources into its regulated fleet of generation assets, the commission noted.
The application stated that the facility will consist of PV panels affixed to a ground-mounted single-axis tracking system supported on driven piles, or other suitable racking as site soil conditions may require. The facility will interconnect on a DEC-owned 12.47-kV distribution line. The point of interconnection is on site and no access, utility, or shade easements will be required of additional landowners. The anticipated useful life of the equipment is expected to be 25 years, and the facility is intended to produce renewable energy certificates (RECs) that are eligible for compliance with the state’s REPS.
DEC and DEP jointly issued a 300-MW solar RFP in February 2014 in order to leverage both state and federal tax incentives that help lower the cost of RECs. Through the RFP, DEC solicited both purchased power agreements (PPAs) and solar asset purchase proposals from projects that could be placed in-service prior to the North Carolina Energy Tax Credit (North Carolina ETC) expiring on Dec. 31, 2015. Both DEC and DEP negotiated agreements for 278 MW, awarding contracts for both PPAs and solar asset purchases. Eight projects were selected through the RFP, one of which was a 19-MW PPA in DEC territory. The remaining seven projects were located in DEP territory.
In addition, DEC stated that DEC and DEP continue to look for opportunities to comply with North Carolina’s REPS as well as to diversify their generation portfolios by making investments in renewable energy generation sources. To support that strategy, DEC and DEP have continued to seek opportunities to invest in both PPA projects and self-develop generation facilities.
DEC further stated that it issued the Green Source Rider RFP in February 2015. The RFP solicited 50 MW (ac) for both PPAs and solar asset purchase proposals for facilities that would be in-service by Dec. 31, 2016. DEC received a limited response to the RFP. Only two of the sites proposed were utility-scale projects greater than 5 MW (ac) in size. Of the two, one had a problem with siting, and the other (45 MW ac) was awarded a PPA that is currently under negotiation. DEC was unable to reach agreement with participating counterparties on the other asset purchase proposals (asset purchases comprised nine of the ten proposals) due to the quality of the projects and pricing. Six of the projects evaluated for ownership had “fatal flaws” that DEC identified through due diligence. Negotiations to purchase two of the projects were terminated after the developer accepted a bid from another investor who bought the project assets, including the PPA.