Selling solar power-in blocks
7X Energy Inc. has recently developed the 100-MW Lapetus solar project in Texas, which will be selling its energy in SolarBlocks under a power purchase agreement negotiated by 7X, an approach that has been a hit with energy distribution cooperatives.
By Paul MacDonald
One of the largest solar projects in Texas will start operations later this year, and it will feature an interesting power purchasing strategy.
The 100-megawatt (MW) Lapetus Solar Energy Project in Andrews County—developed by Austin-based 7X Energy Inc., one of the fastest growing solar developers in the U.S.—features its SolarBlocks product.
"SolarBlocks is a fixed-block power purchasing strategy that enables energy buyers to purchase blocks of solar generation from 7X-developed projects at a fixed rate, covering peak hours when wholesale electric rates are often highest," explained Clay Butler, president and CEO of 7X Energy.
"We offer shorter contract terms, as low as 10 years, have the ability to procure specific amounts of solar energy every 15 minutes, and we can hedge against on-peak prices," he added.
SolarBlocks can be purchased not only by electric cooperatives and utilities but also by corporations in competitive retail electricity markets. Lapetus is the company's first solar project utilizing SolarBlocks—and it is also the largest solar project in Texas where an electric cooperative is the offtaker. Brazos Electric Power Cooperative Inc. will purchase the energy on behalf of CoServ Electric and seven other distribution cooperative members.
The solar energy from Lapetus will be sold in SolarBlocks under a power purchase agreement (PPA) negotiated by 7X Energy. The project will deliver electricity to ERCOT (Electric Reliability Council of Texas).
The SolarBlocks approach of 7X Energy was actually part of the reason for an uplift in a power purchase from Lapetus.
Late last year, the Brazos Electric Power Cooperative announced the additional procurement of solar energy from Lapetus, going from 25 MW to 67.5 MW.
Recognizing the value of the firm blocks of power originally procured by Brazos Electric on behalf of its members, eight Brazos distribution cooperative members asked the generation and transmission cooperative to purchase the additional power from the Lapetus solar project.
"In our continued effort to make renewable energy procurement easier for buyers, we're excited that Brazos Electric and their members recognized the value of firm blocks," said Butler. "We are committed to meeting our customers' needs, and that, combined with a steadfast reputation for dependable project execution, is what has made 7X into a market leader today."
7X Energy sold the Lapetus project to Duke Energy Renewables earlier this year and has been working closely with Duke throughout the project.
Lapetus is Duke Energy Renewables' largest solar project in Texas, according to the company. The team had to understand and work through new state solar requirements and regulations, but for the most part it has been a seamless process, says Duke.
7X transitioned the last stages of development of the solar project to Duke Energy, and Duke is managing construction, in addition to being the long-term owner and operator of the project. Swinerton Renewable Energy is the EPC for the project.
Work started on the project this past March, and it will be up and operating by the end of 2019.
Reflecting its large size, the project will have approximately 339,622 JinkoSolar panels. The racking and trackers were supplied by NEXT-racker, and the inverters came from Power Electronics.
The Lapetus project is located on an 800-acre site, and it is the first large-scale solar project in Andrews County, about 330 miles west of Dallas. During peak construction, the solar facility is expected to bring approximately 150 jobs to the county and generate over $20 million in local property tax revenue.
The project was in the works for a relatively short time, before the start of construction. 7X Energy utilized its siting and transmission software, Smart Power Maps (SPM), and sited and secured the land for the project in early 2016. Due to its location, in a rural area of west Texas with no nearby neighbors, the planning and permitting process for Lapetus was fairly straightforward, said Butler.
|(Photo courtesy of Duke Energy Renewables)|
It has been a busy year for 7X Energy. In addition to the Lapetus project, the company is scheduled to start work on the largest solar project ever to be built in Texas, the 690-MW Taygete Energy project. The massive $650 million project is being built in Pecos County, southwest of the Lapetus location.
The extent of civil work is particular to each solar project, but a significant amount of brush clearing and soil "cut and fill" were done to level out the project site. Compared to other sites, though, this represented an average amount of civil work.
True to this part of the Texas Panhandle and the South Plains, the site is, says Butler, "as flat as a pancake." It is on agricultural grazing land with no existing improvements.
"The location itself was selected by 7X Energy transmission engineers, utilizing our proprietary software, because it presented low curtailment and congestion risk due to recent transmission upgrades and proximity to load on the network," he said.
With it being such a large project, Swinerton has taken somewhat of a phased approach to construction.
The construction depends on delivery schedules and the order in which materials are delivered, says Duke. The project has 34 'blocks' and typically a block is done in unison, and groups of blocks are done at the same time. There is a method based on delivery, best workflow processes, and a few other factors.
With such a large site, there is a good amount of laydown area for equipment and materials. Panels are specifically delivered and placed on the access roads into each block, then distributed in the actual block areas for ease of use, says Duke.
The local labor situation for erecting all those panels has been fine, the company says. Duke said it has been pleased with the local labor resources—more than 200 people worked on the site during the summer.
|Reflecting its large size, the Lapetus solar project will have approximately 339,622 JinkoSolar panels. The racking and trackers were supplied by NEXTracker, and the inverters came from Power Electronics.|
The project is located adjacent to a wide county highway, allowing for easy construction and project access.
As with all of its projects, 7X Energy executed multiple landowner agreements and Duke Energy Renewables coordinated with the state and local government to build the project—this included addressing potential traffic issues and road use agreements.
How have they dealt with that famous Texas heat?
Heat is a recurring issue in Texas in the summer, but Duke Energy has safety protocols in place for hydration and heat exhaustion. When temperatures reach a certain level, a break schedule is instituted for workers that is proportionate to the heat. There have been some minor work stoppages due to lightning at the site as well.
Swinerton has a few smaller subcontractors assisting them on smaller aspects of the construction project. Fiberlight is the fiber contractor, and Oncor Distribution is building the backup power line.
Duke Energy Renewables said it is extremely important that all of its contractors/suppliers work as a team, especially considering the size of the Lapetus project.
Clear communication between all parties is imperative in order for all involved to achieve the project's goals, the company says, adding it is important that everyone understands specific details related to the construction process and deadlines that need to be met.
In terms of 7X Energy, its staff bring a wealth of experience and expertise to projects, Butler says.
|Located on an 800-acre site, the Lapetus project is the first large-scale solar project in Andrews County, about 330 miles west of Dallas. During peak construction, the solar facility is expected to bring approximately 150 jobs to the county and generate over $20 million in local property tax revenue.|
"What separates us from our competitors is that each team member has, on average, over 10 years of experience in the renewable energy industry," Butler explained.
"We are also flexible in our contract models and are willing to mitigate risk for our clients, and are innovative, as exemplified by our proprietary software, which helps us quickly site projects."
7X Energy is a leader in the ERCOT market with years of experience and the most megawatts under PPA, he noted.
And the company is customer driven. "In terms of flexibility, our team understands the needs of all power purchasers, and we are always looking for the best solution for them," says Butler. "From corporate offtake, aggregated, 7X's Boost Solar PPA, fixed shape, 7X's SolarBlocks, Solar and Storage, 7X's latest product Solar+Blocks, to retail sleeves—we've paved the way for these innovative products to meet customer demands."
The company has also been a leader in innovation, he added.
"We have invested over several million dollars in software with tools that are far more advanced than what most of our competitors are using. Headquartered in Austin, we channel the technology spirit, using big data and analytics to site and finance projects. This in turn enables us to be agile and provide fully developed projects in a much shorter time than our competitors.
"Through it all, 7X's principles are to contribute to the well-being of the next seven generations—hence our name," he added.
From 7X Energy's perspective, there are a number of key attributes that must be present for the successful development and construction of large solar projects, such as Lapetus.
- A deep level of understanding of the market and transmission constraints and availability.
- Key relationships with financial parties who make up the capital stack.
- Strong vendor relationships and buying power.
- A well-rounded team with years of experience in the renewable industry.
- An agile approach to development.
"The sale of Lapetus is another milestone for 7X and advances our mission to rapidly deploy solar through innovation and agility to meet customer needs," said Butler. "We are committed to bringing high-quality, reliable solar projects to operation and look forward to working with Duke Energy Renewables on Lapetus through construction and successful commercial operations."
"Our focus is generating cleaner energy for the state of Texas, and this solar project will do just that," said Rob Caldwell, president, Duke Energy Renewables and Distributed Energy Technology. "We are pleased to partner with these communities in Texas to build and own facilities that offer customers additional options to use solar energy."
It has been a busy year for 7X Energy. In addition to the Lapetus project, the company is scheduled to start work on the largest solar project ever to be built in Texas, the 690-MW Taygete Energy project. The massive $650 million project is being built in Pecos County, southwest of the Lapetus location. And it will be following the power purchasing strategy proven successful with Lapetus. The solar energy from the Taygete facility will be purchased by two large corporate entities in SolarBlocks.