NRG Energy, Inc. (NRG) announced that it has acquired a 4-megawatt (MW ac) Spanish Town Estate Solar project, located in the island of St. Croix in the U.S. Virgin Islands (:USVI), from Toshiba International Corporation (Toshiba). The latest project is NRG Energy’s first public solar facility in the USVI.
Construction on this project started in Apr 2014. The solar facility will not require fuel and very little water. Upon completion, NRG Energy will be the sole-owner of the solar facility while Toshiba will be in charge of engineering, procurement and construction activities. The facility will provide emission-free electricity to over 1,500 homes.
Following the completion of the project, NRG Energy will sell the output to the U.S. Virgin Island Water and Power Authority under a 25-year power purchase agreement (PPA). PPAs offer considerable top-line visibility to the company.
The Spanish Town Estate Solar project while offering clean energy to the residents will also help the USVI meet its renewable energy goals of reducing its fossil fuel-fired energy consumption by 60% over the next 10 years.
In addition, the venture will likely provide roughly $3 million to the USVI economy and generate around 100 jobs during the construction phase.
The Caribbean island of St. Croix gets an average of 12 daily hours of sunlight throughout the year. This is particularly ideal for developing solar energy. Earlier this year NRG Energy entered into an agreement with Virgin Limited Edition to install a microgrid in the Necker Island. Apart from power generation projects, NRG Energy has also supplied a solar-powered fish hatchery in the Republic of Haiti, another Caribbean country.
In the U.S., the Obama administration has recently unveiled plans to curtail carbon emissions from power plants by 30% by 2030 from 2005 levels. The new regulations will probably come into effect next year.
Given the changing landscape for environmental compliance NRG Energy continues to pursue several initiatives to expand its renewable portfolio. In Jun 2014, the company launched the NRG Community 1 Solar Generating Facility in California. The 6-MW facility is located at the Imperial Valley Campus of San Diego State University.
NRG Energy is in fact well-positioned to meet stringent utility laws. At the end of 2013, roughly 4% of the company’s total electricity was generated from renewable sources with the share gradually increasing. On Mar 24, 2014, the company announced that its solar assets have crossed the 1,200-MW mark.
Apart from NRG Energy, its peers Exelon Corporation (EXC), Public Service Enterprise Group Inc. (PEG) and Sempra Energy (SRE) are also investing substantially in renewable assets to comply with stringent environmental regulations.
NRG Energy currently has a Zacks Rank #3 (Hold).
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