Lightsource BP has secured a power purchase agreement (pgPPA) with Allianz Global Corporate & Specialty (AGCS) for a 153MW solar farm in Texas.
The proxy generation PPA is for the Briar Creek solar farm, located in Navarro County, Texas, which is expected to start commercial operation at the end of 2021.
A proxy generation PPA is a renewable energy contract structure intended to manage weather related risk.
It 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 provided analysis in support of the transaction and will serve as the calculation agent for the life of the contract.
AGCS managing director Vijay Suchdev said: “AGCS is excited to collaborate with Lightsource bp on this novel renewable energy hedge structure and risk management tool.
“We are committed to working with our partners to achieve their sustainability goals and to supporting the long-term global growth of renewable energy.”
Lightsource BP Americas CEO Kevin Smith said: “This deal is a great example of the evolution of renewable energy products here in the US.
“Innovative power contract structures such as virtual and proxy generation PPAs 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.”
Nephila Climate supported the transaction between BP Lightsource and AGCS.
The solar farm is expected to generate $19.7m 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 labour and service requirements included in construction contracts.