After soaring during the global energy crisis triggered by the Covid pandemic and Russia’s war in Ukraine, the renewable energy sector has come back down to earth. High interest rates and a weaker global economy are acting as headwinds for clean energy stocks.
The sector’s most popular benchmark, iShares Global Clean Energy ETF (NASDAQ:ICLN) is deep in the red, having returned -18.2% year to date, compared to a gain of 6.6% for its fossil-fuel counterpart, the Energy Select Sector SPDR Fund (NYSEARCA:XLE) and 12.1% return from the S&P500. Fortunately, the clean energy revolution shows no signs of losing momentum.
This means that the Biden administration has managed to achieve this just months before the end of its term Earn $93 million by offshore wind developers, a big improvement over the previous year. According to preliminary results from the Bureau of Ocean Energy Management, wind leases off the coast of Delaware brought in $75 million. Equinor (NYSE:EQNR), while a second lease off the coast of Virginia Beach was acquired for nearly $18 million by Dominion Energy (NYSE:D). The Dominion lease is adjacent to the 176-turbine Coastal Virginia offshore wind farm the company is currently building. That may not seem like much, but consider that last year, in the first-ever sale of offshore wind leases in the Gulf of Mexico, the highest bid of just $5.6 million was made by RWE Offshore US Gulf, the only bidder.
Both government and private renewable energy developers seem unfazed by the industry-wide challenges. There are dozens of huge clean energy projects underway in various parts of the U.S. Here are three of the largest and most impressive.
SunZia wind project
After more than 17 years of waiting for permits and approvals, Pattern Energy Group finally started the complete construction of the largest renewable energy project in the United States: SunZia Transmission and SunZia Wind, with a total cost of $11 billion.
SunZia Transmission is a 550-mile ± 525 kV high-voltage direct current (HVDC) transmission line that will run between central New Mexico and southern Arizona and will have a capacity of 3,000 MW through the western states. The massive transmission line will deliver power generated by Pattern Energy’s 3,515 MW SunZia Wind facility, the largest wind power project not only in the United States but in the entire Western Hemisphere. SunZia Wind and Transmission will employ more than 2,000 workers on site during construction.
Quanta Infrastructure Solutions Group, Hitachi Energy, Blattner Energy, GE Vernova and Vestas are the main contractors for the two projects. The project’s financing includes an integrated construction loan and credit line, an operational phase credit line, a tax equity term loan facility and a holding company credit line.
“We hope this successful financing of the largest clean energy infrastructure project in American history serves as an example for other ambitious renewable infrastructure initiatives needed to accelerate our transition to a zero-carbon future. We are very grateful to all of our financial partners supporting SunZia in this record-breaking project financing. Construction is well underway on this historic project and will deliver clean energy with a generation profile that complements the abundant solar power generation in the Western United States.“, said Hunter Armistead, CEO of Pattern Energy, in a press release.
Start of construction Construction on the project is scheduled to begin in late 2023 following approval from the U.S. Department of the Interior’s Bureau of Land Management, with commercial operations expected to begin in 2025.
Champlain Hudson Power Express
New York’s Champlain Hudson Power Express (CHPE) is an innovative hydroelectric megaproject that will deliver electricity from Canada to New York City. This 1,250 MW project includes the construction of a 333-mile, fully underground transmission line, which is already completed, according to the project’s website. New York’s Climate Leadership and Community Protection Act (CLCPA) requires New York to be powered by 70 percent renewable energy by 2030. The CHPE is expected to be fully operational in spring 2026, delivering low-cost renewable electricity directly to the New York metropolitan area. New York City has committed to sourcing 100% of its electricity from renewable sources by 2040.
Gemini Solar Project
Nevada’s Gemini Solar Project is currently one of the largest solar farms under construction in the United States. Located 30 miles northeast of Las Vegas, this 690 MW ground-mounted photovoltaic power plant will provide clean energy to over 400,000 homes. The massive project also includes a significant energy storage component with a 1,400 MWh battery storage system that will enable uninterrupted power transmission when the sun isn’t shining.
Primergy Solar and APG Asset Management own 51% and 49% of Gemini Solar, respectively. The electricity generated in the project will be sold to NV Energy under a power purchase agreement (PPA) at a price of 0.038 kWh over a period of 25 years.
By Alex Kimani for Oilprice.com
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