Category: News

IEEFA: Solar-plus-storage undermines coal economics by ‘hundreds of millions’ of dollars

Tumbling solar-plus-storage costs could see the hybrid technology become a money saver for US firms grappling with expensive legacy coal portfolios, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

Utilities shutting down coal units ahead of their end-of-life point and replacing them with renewables, stand to reap savings in the “hundreds of millions”, the think tank claimed in a recent update.

PacifiCorp, a subsidiary of Warren Buffett’s Berkshire Hathaway Energy, is one a raft of utilities IEEFA said is “reckoning with a new reality” of coal closures. In a recent review, the firm found early retirement of certain coal units would create “potential benefits” for its 1.8 million customers.

According to IEEFA, PacifiCorp’s coal units can’t compete with “cheaper and cleaner alternatives” despite their high power performance levels. For the firm – reportedly the largest grid operator in the US West – the savings from early closures could reach the US$248 million mark, depending on scenarios.

Cost parity with mainstream gas plants

The spotlight on ever cheaper solar-plus-storage has gradually built in recent times. Only this month, new analysis claimed the duo can outcompete certain new-build gas generators in the US, and not only peaker plants as previously thought.

According to the review led by Fluence, utilities opting for solar-plus-storage can expect lower LCOEs (US$39-US$48/MWh) than comparable mid-merit NGCC plants (US$60-$116/MWh). For reference, some of PacifiCorp’s coal units feature LCOEs above the US$85/MWh threshold, based on the firm’s own stats.

The Berkshire Hathaway Energy subsidiary will not confirm the extent of coal phase-outs – nor the technologies that will replace it – until the late summer. For now, however, several of its scenarios would result in hundreds of megawatts of solar-plus-storage additions.

As noted by the IEEFA this week, other utilities have already finalised similar moves. Nevada’s NV Energy, for one, is shutting down coal plants even as it acts to add 1GW of solar and 100MW of battery storage capacity. Meanwhile, Colorado’s Xcel has filed proposals for solar- and wind-plus-storage at average prices of $30-$36/MWh.

See here for IEEFA’s statement and here for PacifiCorp’s note

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Danish clean energy fund draws US$700m from Nordic investors eyeing Asia and LATAM

Fund management firm Copenhagen Infrastructure Partners (CIP) has established a new fund to invest in greenfield renewable energy infrastructure primarily in Asia and Latin America, with expectations of reaching US$1 billion by the final close.

The Copenhagen Infrastructure New Markets Fund I K/S (CI NMF I) reached a US$700 million first close on 9 May with commitments from cornerstone investors PensionDanmark (PD), Arbejdsmarkedets Tillægspension (ATP), Kommunal Landspensjonskasse (KLP), and Lægernes Pension. Three of the organisations have also been cornerstone investors in other CIP funds, but ATP is a new cornerstone investor.

The fund will also focus on certain countries in Eastern Europe and Africa.

“Obtaining first close commitments of US$700m from a group of leading Nordic investors is an important proof of investor confidence in CIP’s approach to energy infrastructure investments and a testament to the track record built with CIP’s Western Europe and North America focused energy infrastructure funds CI I, CI II, and CI III,” said Jakob Baruël Poulsen, managing partner in CIP. ”The CI NMF I is a significant step in CIP’s continued expansion as it broadens our offering to also include infrastructure funds targeted at fast-growing major new economies.”

”CIP has come a long way since PensionDanmark and CIP’s senior partners established CI I back in 2012 with PD as sole and founding investor. CIP has demonstrated its ability to develop and construct renewable infrastructure projects in Europe and America on time and budget and has delivered very attractive returns to its investors. We see the New Markets Fund as a natural next step to broaden the investment universe to new markets in Asia and Latin America where there is a significant need for renewable energy investments that represents attractive investment opportunities for CIP and its investors,” said Torben Möger Pedersen, CEO at PensionDenmark

CI NMF I will apply the same value creation and de-risking approach as CIP’s existing OECD-focused funds and invest in offshore and onshore wind, solar PV, biomass and waste-to-energy and transmission grid systems among others.

CIP is a fund management company focused on energy infrastructure including offshore wind, onshore wind, solar PV, biomass and energy-from-waste, transmission and distribution, and other energy assets like reserve capacity and storage. CIP manages five funds and has ~€7.5bn under management.

Last August, CIP started construction on two solar projects totalling 300MWac in the US.

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Japan’s Marubeni invests in US distributed generation company GridMarket

Japanese conglomerate Marubeni Corporation has invested in US-based company, GridMarket, which is focused on distributed generation projects using battery storage, solar PV, fuel cells, and combined heat and power. 

Marubeni is looking to capitalise on GridMarket’s ability to use proprietary analytics and machine learning to identify cost-effective project opportunities and source technologies to build distributed generation systems across its huge network. The Japanese firm has been working solar energy for two decades but is now looking to promote distributed generation systems for its customers by applying GridMarket’s services particularly in North America, Japan and island areas.

The move should help to reduce electricity bills for consumers.

This is not the first time that a large conglomerate or traditional power companies has taken an interest in distributed generation opportunities, although many such cases are in developing countries. For example, French energy giant Engie has recently teamed up with Myanmar-focused off-grid energy specialist Mandalay Yoma to help spur rural electrification across the Southeast Asian country with mini-grids combining PV, diesel and battery storage. French power giant EDF also acquired a 50% stake in the Togo-focused unit of off-grid renewable energy specialist BBOXX.

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Walmart closes deal with C2 Energy for 46 PV projects

C2 Energy Capital has signed off on 46 Power Purchase Agreements (PPAs) and leases with Walmart that will see the company provide renewable energy to the retailer in five US states. 

These deals, totalling around 40MW of capacity, fall in line with Walmart’s goal of having 50% of its operations powered by renewable energy by 2025.

These 46 PV projects will generate more than 65,000,000kWh of renewable energy annually, enough of an energy output to power nearly 5,500 homes. These installations are expected to cover 10-60% of each stores’ overall electricity use.

Mark Vanderhelm, vice president of energy for Walmart Inc., said: “Solar is a vital component of Walmart’s expanding renewable energy portfolio. Walmart plans to tirelessly pursue renewable energy projects that are right for our customers, our business and the environment. These planned projects with C2 Energy Capital are moving us in the right direction toward our renewable energy goals.”

This new deal comes one year after Walmart chose C2 Energy Capital to install 13 rooftop solar projects in South Carolina. All 13 projects are now operational. 

Candice Michalowicz, co-founder and managing member of C2, said: “Walmart is a seasoned expert at onsite solar generation, and they have high expectations for their vendor partners. We are honored to be a part of their renewable energy program, and the important steps they are taking that will benefit the local communities and the environment.”

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Corporations, citizens and most bankable batteries: ‘Storage & Smart Power’ returns

Volume 19 of PV Tech Power has just hit the (digital) shelves and once again the quarterly technical journal from our publisher Solar Media includes ‘Storage & Smart Power’, the dedicated section created and curated by Energy-Storage.news.

The magazine is available for free download from the PV Tech site, while individual papers from Storage & Smart Power will also appear here on E-S.N in the coming weeks.

We’re looking at two of the biggest ‘stakeholder’ groups in the energy industry of tomorrow: corporations and ordinary people. From customers, to providers, with roles in between, some of the world’s biggest companies and ordinary citizens are shaping the future, in very different ways.

Heavy industry and big tech companies are big procurers of renewable energy, but when it comes to the need to adapt, corporations with a direct interest in fossil fuel industries are, for obvious reasons, going to have to seek new tactics to survive. Our feature, “Corporate takeover: the end of independence?” (p.100) looks at Shell’s acquisition of battery storage player Sonnen, as well as the new ownership of Greensmith and Younicos by Wartsila and Aggreko respectively. 

We ask what makes an energy storage company an attractive target, whether these mission-driven companies can retain their commitment to their original aims and if corporate involvement is vital to roll out clean energy technologies at scale. 

Complementary to that piece in some ways is the feature, “Power to the People” by Liam Stoker, Solar Media’s UK editor (p.106). It looks at how control of Britain’s domestic energy market, traditionally held by the ‘Big Six’ group of utilities, is now a hotly contested prize. From big players from other industries taking a sideways step, to start-ups that claim to have cracked the grid’s complex combination safe of stacked revenues, an energy market revolution is happening as the energy transition accelerates. 

We’re also privileged that this edition of Storage & Smart Power includes a contributed piece on DNV GL’s Battery Module Scorecard, through which the accreditation, certification and testing house explains the importance of comparing and accurately assessing the capabilities of different lithium modules used for energy storage (p.96). 

Elsewhere in the main magazine, the cover feature focuses on the roles of big data and predictive analytics in the PV industry, with specific regards to post-subsidy deployment. PV Tech Power takes a deep dive into the ways buzzwords like big data, artificial intelligence and augmented reality can provide practical benefits to the industry. Engineers and data scientists from i-EM explain how predictive analytics and a ‘democratic’ future for big data access and analytics can bring big benefits (p.17) – not in the misty, distant future but right now. 

Complementary to that, the journal runs some real-world case studies as Enel Green Power, Aquila Capital and Pöyry discuss the impact of their own digitalisation efforts so far (p.32). 

Within the 116-page free journal are also feature articles and technical papers on topics including bifacial solar’s transition from niche to mainstream, the impact of soil erosion control and drainage, building PV systems to weather storms, strategies to minimise risk of wind damage to solar arrays, some novel ways to boost PV module output, the evolution of solar asset management and an in-depth look at Spain’s 175MW Don Rodrigo solar plant. 

Download PV Tech Power Volume 19, including E-S.N’s ‘Storage & Smart Power’, here.

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Solar-plus-storage is ‘chasing gas off the grid’

The price of power from solar-plus-storage is already cost-competitive with some new build gas generators in the US and not just for gas peaker plants.

In a study by Fluence and a group of MBA candidates at the Tepper School of Business at Carnegie Mellon University, it was found building new mid-merit gas plants was no longer the best value option for utilities.

“Coal’s market share of electric power generation has decreased from 57% 30 years ago to 27% in 2018,” Professor Jay Apt, Tepper School of Business, Carnegie Mellon University told Energy-Storage.News.

“During the same 30 years, natural gas’s share has leapt from 9% to 35%. The shale gas revolution has made gas the fuel that most executives think of first. This work makes it clear that, under certain conditions that the paper defines clearly, a solar-and-storage plant can more than hold its own against gas when the decision is made about what plants to build,” explained Apt.

Fluence’s lead data scientist Colleen Lueken explained in a blog for the company that the report was comparing both the operational and financial performance of the projects.

“The surprising results are in the chart below: S+S can compete – operationally and financially – with mid-merit NGCC plants in many regions of the United States today. For example, in the California Independent System Operator (CAISO) service territory, the net levelized cost of energy (net LCOE, defined below) for S+S runs from US$39 to US$48, with a mid-point of US$43.20. A comparable mid-merit NGCC would have a net LCOE of US$60-$116.”

Professor Chris Telmer, who oversaw the study together with Apt, stresses that utilities need to be thinking about the precise nature of job that any new build plant will be required to perform.

“The context for the paper’s question is that of a utility preparing an IRP, looking at its existing fleet of NGCC plants, recognizing that some of them operate as shoulder plants, and then considering how to do these ‘jobs’ as it expands its load base or replaces some of its fleet.  

“A utility executive considering the paper’s answer might ask themselves ‘why would I build a new gas plant and have it run at a capacity factor that averages 30-40%?’. This is pretty much the same question as ‘why would I ever build a mid-merit shoulder plant’. The students’ paper does not have a definitive answer to these questions. They simply look at the data, see that many plants do run as shoulder plants, and then they ask ‘if you do build such a plant, here is how cost-effective it would be relative to solar-and-storage’.”  

Importantly, Telmer flags that the study doesn’t factor in how a utility might more broadly plan its strategy for bidding into the mid-merit market. As a result, the study’s conclusions could be less persuasive to a utility decision-maker.

The scope of the study may appear fairly niche but as Lueken explains, with the peaker argument put to bed, looking at mid-merit plants is the next step:

Looking beyond peakers, tracking the ability of solar and storage to compete with mid-merit natural gas is the first part of a much larger question – how fast can we replace all natural gas – and even baseload – generation with renewables and storage? In response, the storage industry is now pivoting its focus toward long-duration systems – and which technologies are best positioned to supply storage with the 6-10 hours of duration, or longer, that will be required to meet this stretch goal.”

This month Southern California Edison signed up for six additional storage systems to compensate for a localised absence of gas generation as a result of the Aliso Canyon leak.

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Gas goes out again as top US utility SCE picks energy storage instead

Southern California Edison, one of the US’ top-ranking utilities for energy storage capacity already deployed, has signed contracts for seven more clean energy projects, totalling 195MW in its California service area.

The company has announced contracts for six energy storage facilities and one demand response contract. In April 2018, Smart Electric Power Alliance statistics showed that SCE was the leading utility in the US in the preceding year for deployment across the US, with more than 50MW going online. The utility is one of California’s three major investor-owned utility companies in a group which includes the embattled PG&E and SDG&E, which was joint-leader with SCE in the aforementioned rankings. The IOUs are each mandated to deploy a significant share of a 1.5GW target for energy storage deployment by the mid-2020s.

However, a release sent by SCE to Energy-Storage.news over the weekend said that unlike many previous solicitations for large-scale energy storage in the US and elsewhere, the latest 195MW procurement will directly address local network needs including the shortfall in gas generation locally in the wake of the Aliso Canyon disaster. 

Aliso Canyon’s big leak resulted in some of the world’s fastest deployments of grid-scale storage, as covered extensively on this site. In continuing efforts to provide adequate capacity to the local area, SCE put out the Aliso Canyon Energy Storage 2 Request For Offers and Local Capacity Requirements Request For Proposals, this year and last, respectively.

‘Supporting a clean energy vision for California’

The energy storage systems will be connected to two substations, at Santa Clara and Goleta, with Aliso Canyon Energy Storage 2 also helping supply local network services.

The largest of the seven projects will be a 100MW system contracted to Strata, with the seven coming online commercially either by December 2020 or March 2021.

SCE, a subsidiary of Edison International, awaits regulatory approval from the California Public Utilities Commission for the projects. The utility did not reveal the expected duration of the storage systems, however recent projects to replace gas in California and elsewhere have typically seen two to four-hour systems deployed. The 100MW system at 400MWh would be one of the biggest systems today, albeit by its expected completion date of 2021 it will likely have more competition. 

“Unlike other solicitations to increase the generation capacity of the overall electric system, this solicitation specifically sought to meet local needs in the Moorpark area and address electrical energy storage needs related to restricted natural gas operations at Southern California Gas Company’s Aliso Canyon Natural Gas Field. SCE targeted clean energy resources through an accelerated competitive bidding to meet this identified need before summer 2021. The solicitation results also support SCE’s clean energy vision for California,” SCE vice president of energy procurement & management, Colin Cushnie said. 

Southern California Edison selected demand response resources as well as energy storage from the latest solicitation, while choosing no natural gas generation at all. In a recent PV Tech POWER article, several industry sources and experts also highlighted the competitiveness of solar-plus-storage versus natural gas peaker plants in many parts of the US. 

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New York’s Green New Deal puts US$350m investment into energy storage

US$400 million of funding pledged by New York’s state Governor Andrew Cuomo last week towards his “comprehensive climate agenda” will include US$280 million in support for energy storage.

New York State Energy Research & Development Agency (NYSERDA) emailed Energy-Storage.news to highlight that last week’s investments into de-carbonisation included US$280 million available now from NYSERDA and a further US$70 million to be allocated “based on opportunities that have the greatest potential to support a self-sustaining storage market” in the future, the agency said.

Partly due to New York’s stringent planning restrictions, including the fire regulations necessary for safe operation of electrical systems in its densely populated urban environments, actual deployment of grid-scale energy storage systems has been limited in the state. Residential systems have also not enjoyed high volumes of installation, as net metering and other policies continue to support a standalone domestic solar market.

Nonetheless, Cuomo’s leadership team set the state a target of 3GW of energy storage by 2030 last December, an aggressive update on a ‘1.5GW by 2025’ goal set in a previous iteration. NYSERDA also pointed out that the state is also a provider into the industry: “nearly 100 energy storage companies with expertise in hardware manufacturing, advanced materials, software development and project management” are headquartered or based in New York, while 3,450 people were found to be working in the industry in a report by American Jobs Project. Cuomo fully launched his “clean energy and jobs agenda”, a state-level Green New Deal, in January.  

Cuomo: ‘Energy storage is vital to our resiliency work’

“Energy storage is vital to our resiliency work and this funding will enable us to grow the industry and create jobs while we continue on our path toward meeting the country’s largest energy storage target,” Cuomo said.

“While the federal administration denies the devastating reality of climate change, New York continues to invest in its future by building a more efficient clean energy system.”

Cuomo’s Lieutenant Governor Kathy Hochul re-enforced the point that the funding marks an investment in “aggressive energy goals across the state”. 

“This funding continues our efforts to support clean energy and energy storage projects, growing the industry and creating good jobs,” Hochul said.

‘On the block’ and in bulk: 5MW definition distinction

The freshly announced funding is expected to directly help achieve the 2025 goal, NYSERDA said. It will be issued as:

  • One US$150 million set of funding for “bulk storage” projects, defined as systems over 5MW in size primarily engaged with the wholesale energy market, or distribution services. 
  • A further US$130 million opportunity for “retail storage projects”, behind-the-meter (BTM) customer-sited systems under 5MW. These can be either standalone or paired with solar or other distributed small-scale generation as applicable.

The latter set of funds will be distributed through a “megawatt hour block system”, a system for supporting deployment similar to an existing plan for small-scale solar. The Retail Energy Storage Incentive Program splits the funding into New York City as one region and the rest of the state as the another. The programme then follows market deployment in each region and allocates funding accordingly. A certain number of kilowatt-hours of capacity will be supported until every block of available capacity/funding is taken up.

Meanwhile, bulk storage systems will have the choice of applying for either fixed incentive funding through to 2025 in steadily declining amounts each year, or through responding to a utility bulk storage RFP (request for proposals), which is to be offered later this year. 

3GW by 2030 = US$4 billion in benefits + 2 million tonnes of CO2 saved?

It is believed the achievement of the 3GW by 2030 target “will deliver more than US$4 billion in gross benefits overall to New Yorkers,” while reducing CO2 emissions by 2 million metric tonnes. The latest funding and opportunities sit alongside a Request for Information just issued by utility NYPA (New York Power Authority) for battery integrators, developers and others utilising lithium batteries at utility-scale. NYPA is seeking participants for competitive solicitations to be held within New York State. Earlier this month NYPA also launched an Innovation Challenge, seeking to support both long duration stationary storage tech and business model development, as well as electric vehicle uptake and infrastructure. 

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Open source software launched to help US behind-the-meter projects hit economic sweet spots

An open source software tool to help developers and other stakeholders in the US to analyse the viability of their energy storage system projects has been released by Sandia National Laboratories.

Sandia this week launched QuESt v1.2, which it describes as “open source software for energy storage valuation”, based on the computer programming language Python – which as one expert told Energy-Storage.news – as a quick and versatile system for writing code.

The main software suite performs energy storage system modelling and analysis. In a recent article for PV Tech Power, reproduced as a Guest Blog for this site, commercial provider Pason Power wrote about the growing importance of economic modelling to ensure the solidity of the business case for energy storage projects.

In the latest release, Sandia has emphasised the growth in interest in behind-the-meter (BTM), customer-sited energy storage systems. The new application suite includes QuESt BTM, a brand new modelling app that specifically helps stakeholders analyse BTM systems – before they begin deployment.

Raking across data from the US’ different utility markets and their rate structures, QuESt BTM allows users to estimate cost savings from their storage systems, which can vary hugely across the different regulated markets in the States. Time-of-use utility rates and net metering policies can impact the overall economic case for energy storage. The software assesses the economics of shifting the load to times of lower demand across the network or peak shaving, using storage.

Using simulated load profiles for a range of commercial and residential buildings across the US, the software “leverages a database of US utility rate structures to allow users to select the rate structure most pertinent to his or her project,” Sandia said in a press release.

Given the growth in solar-plus-storage in recent times, QuESt BTM is also designed to analyse and compare simulated solar energy production profiles when co-located or combined with energy storage facilities.

The software application suite also looks to help developers and others to ‘size’ their projects correctly. As mentioned in Pason Power’s recent article, sizing of energy storage systems can have a big impact on the overall economics, due to the relatively high Capex involved in deploying them.

“A grossly oversized storage system will do the job but never pay off or meet the internal rate of return (IRR) requirement. An undersized storage system will not do the job and suffer a similar economic fate,” Pason Power CEO Enrico Ladendorf wrote in that article, ‘The smarts behind the storage’.

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ERCOT’s multiple opportunities a target for GlidePath’s 10MWh Texas project

A large-scale energy storage project to be built in Texas will take advantage of the system’s flexibility to deliver multiple services, as opportunities grow in the state’s Electricity Reliability Council of Texas (ERCOT) market.

Independent power producer (IPP) GlidePath Power has contracted Oregon-headquartered Powin Energy to construct a 10MW / 10MWh energy storage system (ESS) utilising lithium iron phosphate (LFP) battery technology at an as-yet unspecified location in the ERCOT service area.

A GlidePath representative told Energy-Storage.news that the project “has the potential to be co-located” with renewable energy facilities, in a state where there is a large installed capacity of wind energy and a growing interest in solar. The company was tight-lipped on revealing which applications the system will serve but instead issued a general statement on various opportunities within ERCOT.

“ERCOT is a highly competitive market with room for multiple technologies to participate in providing energy, ancillary service and reliability functions,” the GlidePath spokesman said.  

“GlidePath is excited to enter this market with an energy storage system that will demonstrate great value to ERCOT consumers in a market projecting historically low planning reserve margins.”

Going forward, demand for electricity is rising rapidly in Texas, while GlidePath quoted figures to Energy-Storage.news from ERCOT’s preliminary assessment for total resource capacity in the 2019 summer season that show a planning reserve margin of just 7.4% with “total resource capacity being extremely narrow”, the spokesman said.

As well as this shortfall in planned reserve capacity which ESS could help bridge, ERCOT is seeking ways to add dispatchable energy storage markets, in common with other RTOs and ISOs around America. The ERCOT grid is not interconnected with the rest of the US’ electricity networks and does not fall under the jurisdiction of the Federal Energy Regulatory Commission (FERC) Order 841, instructing network operators to incorporate energy storage into wholesale markets.

Nonetheless, GlidePath said the company believes moves by transmission operators including ERCOT to “take advantage of the increasingly cost-competitive technology and the versatility of functions energy storage can demonstrate for the grid and to the market… is just the beginning of seeing market evolutions in bringing storage to the forefront of providing much-needed flexibility to the grid operators”.

IPPs as ‘dynamic stakeholders in the grid community’

GlidePath said it had selected Powin Energy to provide and construct the turnkey system due to the multi-use flexibility and data fidelity/exposure that Powin’s energy management systems (EMS) and battery management systems (BMS) are capable of, which GlidePath described as “industry leading”.

“These features allow GlidePath to leverage a strong commercial base case while maximising future upside from additional use cases at the same site. The site is being designed to easily expand the DC capacity to four- to six-hour duration use cases when they evolve in ERCOT,” GlidePath said.

“This flexibility also allows GlidePath to be a dynamic stakeholder in the grid community as new grid services are contemplated.”

A Powin representative told Energy-Storage.news that the company positions itself as a full services integrator, providing a customer with a single point of responsibility in the event of a problem occurring. The company has delivered around 75MWh of energy storage into North America and claims a further 1GWh+ pipeline of additional awarded battery projects to be deployed in the two years. The Powin spokesman claimed that approximately 150MWh of that pipeline will be deployed by Q3 2019, providing applications including peak demand management, solar load shifting and thermal ramping capacity.

The pipeline appears to have grown rapidly. In September last year Energy-Storage.news reported that Powin Energy had claimed a pipeline close to 500MWh under contract for construction by 2021. Powin pivoted from energy storage project development to become more of a technology provider in late 2017 with the sale of a 116MWh portfolio. Forthcoming large-scale projects for the company include a 6.5MW / 26MWh project for utility San Diego Gas & Electric (SDG&E) in California.

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