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Ørsted to build 430-MW solar project near Houston in booming Texas market

Ørsted A/S is going ahead with a 430-MWac solar facility to be located outside of Houston that it expects to come online in 2022, the Denmark-headquartered company said Dec. 2.

The Old 300 Solar Center is a rare solar project for southeast Texas, and comes amid a statewide boom in solar development where most projects, including another Ørsted facility, are typically located in the wide-open areas of West Texas.

Ørsted, known globally for its offshore wind projects, said it wants to "significantly increase" its solar portfolio by locating the Old 300 Solar Center in Fort Bend County, roughly 40 miles southwest of Houston.

In a statement, Vishal Kapadia, Ørsted's chief commercial officer for onshore, called the area a "premium market with strong long-term fundamentals."

The project is supported by a power purchase agreement, and an Ørsted spokesperson said details of that agreement are to be disclosed when the Old 300 facility is commissioned.

Additionally, the company said the project will use roughly 1 million energy efficient bifacial modules supplied by two leading Chinese manufacturers — JA Solar Technology Co. Ltd. and LONGi Green Energy Technology Co. Ltd. — with inverters to be supplied by SMA America, a unit of the German firm SMA Solar Technology AG.

Ørsted said in its statement that it now has 1.1 GW of solar PV under construction. Its 420-MWac Eunice Solar Project (Permian Energy Center) with 40 MW of storage is under construction in Andrews County in West Texas and is expected to be completed in mid-2021, the company has said.

Ørsted also said it has a total of 3.4 GW of capacity in operation and under construction "across onshore wind, solar PV and storage."

A spokesperson for the Electric Reliability Council Of Texas Inc. grid operator has said ERCOT is expected to have just over 5.1 GW of solar generation installed by the end of 2020 and has nearly 8.2 GW of planned solar with signed interconnection agreements expected to come online in 2021.

Solar 'next big thing' in ERCOT

In its 2021 outlook on North American energy infrastructure released Dec. 2, Fitch Ratings noted the booming solar market in ERCOT, saying, "Solar is the next big thing in ERCOT, with numerous planned projects incorporating bifacial panels, storage or both."

Fitch's outlook on the energy sector, despite the coronavirus pandemic, is stable.

"Amid the turmoil of the initial onset of the coronavirus pandemic in North America in early spring, activity in the Energy Infrastructure sector barely paused," Fitch said in the report, by analysts Andrew Joynt and Gregory Remec. The credit rating agency said it expects acquisition of developed projects and distributed generation portfolios to be "the primary sources of new long-term debt financings."

It said that most energy project financings "will continue to benefit from fixed-price off-take agreements that minimize revenue and margin volatility. These conditions will facilitate the ongoing evolution in energy project finance paradigms."

Of battery storage, Fitch said it expects the market to "continue to explore appropriate financing structures" as well as other storage technologies.

"Given the various use cases (short/long duration, peak shifting, ancillary services, etc.), developing standard conventions will be a challenge."

Fitch suggested that new project development will focus on "deeper renewable penetration into interconnection grids," and employ more battery storage, bifacial solar and eventually offshore wind on the coasts.

Fitch noted that more renewables are also planned in the PJM Interconnection region, and that after a "prolonged debate over auction price mechanics, it appears that clarity on rules governing minimum offer prices and energy and ancillary services will allow delayed auctions to proceed."

It said, however, that if there are further delays in conducting auctions, "project development could stall."

Jeffrey Ryser is a reporter for S&P Global Platts. S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.