Lightsource bp has secured a proxy generation power purchase agreement (pgPPA) with the Capital Solutions unit of Allianz Global Corporate & Specialty (AGCS), in partnership with Nephila Climate. The pgPPA is for electricity generated by Lightsource bp’s 153 megawatt Briar Creek solar farm, located in Navarro County, Texas.
What’s a pgPPA? A pgPPA is an innovative renewable energy contract structure intended to manage weather related risk. A pgPPA is similar to a virtual PPA, except it settles energy on a proxy generation index rather than the metered generation. Proxy generation is an hourly index that specifies the volume of energy that a project would have produced if it had been operated as specified by the developer or owner. REsurety, Inc. provided analysis in support of the transaction and will serve as the calculation agent for the life of the contract.
“AGCS is excited to collaborate with Lightsource bp on this novel renewable energy hedge structure and risk management tool,” said Vijay Suchdev, Managing Director at AGCS. “We are committed to working with our partners to achieve their sustainability goals and to supporting the long-term global growth of renewable energy.”
The Briar Creek solar farm, located about 40 miles south of Dallas, is expected to start commercial operation at the end of 2021.
“This deal is a great example of the evolution of renewable energy products here in the US,” said Kevin Smith, CEO of Lightsource bp in the Americas. “Innovative power contract structures such as virtual and proxy generation PPA’s are valuable tools we can leverage to meet the needs of our corporate partners, manage risk, and continue to finance and build new solar projects for our low carbon future.”
The solar project will also deliver local economic benefits beyond clean and economical electricity for the Dallas Fort Worth area. The project is expected to generate $19.7 million in property tax revenue to Navarro County over its life, benefitting local schools and other community public services. It will create about 250 jobs during construction, with local labor and service requirements included in construction contracts.