Fossil fuel giant is betting on a bright future in solar
National climate change legislation may be dead as global warming skeptics take power in Congress. But if you want to see where some big businesses think the future of energy lies, pay attention to NRG Energy.
The New Jersey-based electricity provider, which operates nuclear, coal, and natural gas-fired power plants, has embarked on a solar shopping spree.
On Tuesday, NRG bought a planned 290-megawatt photovoltaic farm from thin-film solar module maker First Solar, agreeing to pour up to $800 million into the Yuma County, Ariz., project. The Agua Caliente power plant will supply electricity to California utility PG&E under a 25-year contract.
The deal follows NRG’s agreement to buy SunPower’s 250-megawatt California Valley Solar Ranch photovoltaic project on the state’s central coast for $450 million. That solar power plant will also supply electricity to PG&E. In October, NRG said it would invest $300 million investment in BrightSource Energy’s Ivanpah solar thermal power plant now under construction in the Southern California desert.
In other words, over the course of two months, NRG has made a nearly $1.6 billion bet on Big Solar.
“Solar power is critical to transitioning our nation to having a greater emphasis on large-scale clean energy technologies and it is going to be projects of the scale of Agua Caliente that will help us achieve this ambitious goal,” David Crane, NRG’s chief executive, said in a statement on Tuesday. “This investment significantly increases our presence in the state and benefits the residents of Arizona while providing attractive returns to NRG’s stakeholders.”
NRG previously signed deals with eSolar, a California solar thermal power plant builder, to jointly develop projects in the desert Southwest.
With a federal loan guarantee program for big renewable energy projects set to expire next September and the long-term prospects of other government incentives uncertain, deep-pocketed investors like NRG are becoming crucial to get large-scale solar farms built.
To NRG at least, the future looks bright and sunny.