NRG invests in bankrupt solar facility in Texas
NRG Energy won its bid of up to $188 million to acquire a massive West Texas solar farm and other renewable energy projects throughout the country from bankrupt SunEdison.It is not clear to me how Georgetown can get 100 percent of its electrical needs from a facility that is not producing electricity at night or when the sun does not shine. There must be something in the deal that allows supplemental energy from fossil fuel and wind facilities for when the sun does not shine. If there is not, the deal does not make sense from an investment perspective. There is currently no viable battery technology to store excess energy for those periods.
The deal still needs final approval in bankruptcy court, but NRG would acquire the 200-megawatt Buckthorn solar farm in Pecos County. The delayed solar project, which is slated for completion next year, would make the city of Georgetown, a community of 60,000 people, the largest municipality in the nation powered solely by renewable sources. One megawatt can typically power 200 homes on the hottest Texas days.
The $144 million deal, which would grow to $188 million if milestone benchmarks are met, also includes solar and wind projects in Utah, Washington, California, Maine and Hawaii. The discount for NRG is steep because most of the projects remain in development and require additional investment.
Missouri-based SunEdison rapidly became the fastest-growing renewable power developer in the world, but the company grew too fast for its own good before many of its assets could become profitable. Hemorrhaging money, SunEdison filed for Chapter 11 bankruptcy protection in April.
NRG warned the deal needs to get done quickly because Buckthorn is supposed to become operational in April 2017, and the deal with Georgetown is terminated if it’s not producing power by late October, 2017.