The US is quietly building several renewable energy megaprojects

After soaring during the global energy crisis triggered by the Covid pandemic and Russia’s war in Ukraine, the renewable energy sector has fallen back to earth, with high interest rates and a weaker global economy acting as a drag on clean energy action.

The sector’s preferred benchmark, iShares Global Clean Energy ETF (NASDAQ:ICLN), is deep in the red, returning -18.2% year-to-date, compared to a 6.6% gain for its fossil fuel peer, Energy Select Sector SPDR Fund (NYSEARCA:XLE) and 12.1% return by S&P 500. Fortunately, the clean energy revolution doesn’t seem to be running out of steam.

Specifically, with only a few months left in office, the Biden administration succeeded gets $93 million from offshore wind developers, a big improvement from a year ago. According to preliminary results from the Office of Ocean Energy Management, wind leasing off the coast of Delaware fetched $75 million from Equinor (NYSE:EQNR), while a second lease, off the coast of Virginia Beach, was snapped up 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 constructing. While that may not seem like much, consider that last year the first offshore wind lease sale in the Gulf of Mexico brought a high bid of just $5.6 million from RWE Offshore US Gulf, the sole bidder.

Both federal and private renewable energy developers appear equally unfazed by industry-wide challenges, with development of dozens of massive clean energy projects underway in various parts of the United States. Here are 3 of the biggest and most impressive.

The SunZia Wind project

After more than 17 years of waiting for permits and approvals, Pattern Energy Group has done it it finally started the full construction of what is considered the largest renewable energy project in the United States: SunZia Transmission and SunZia Wind, at a whopping $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 south-central Arizona, with a transmission capacity of 3,000 MW in the western states. The giant transmission line will deliver power generated by Pattern Energy’s 3,515 MW SunZia Wind facility, the largest wind project not only in the US 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 of the twin projects. Project financing includes an integrated construction loan and letter of credit facility, an operating phase letter of credit facility, a tax equity term loan facility and a holding company loan facility.

“Our hope is that this successful funding of the largest clean energy infrastructure project in American history will serve as an example for other ambitious renewable infrastructure initiatives that are needed to accelerate our transition to a carbon-free future. We are very grateful to all our financial partners who support SunZia as part of this record financing project. Construction is underway on this historic project that will provide clean energy with a generation profile that complements the abundant solar generation available in the western United States.” said Hunter Armistead, CEO of Pattern Energy, in a press release.

Construction has begun on the project in late 2023 after the Bureau of Land Management, US Department of the Interior issued its Notice to Proceed and is expected to begin commercial operations in 2025.

Champlain Hudson Power Express

from New York Champlain Hudson Power Express (CHPE) is an innovative hydroelectric megaproject that will deliver power from Canada to New York City. This 1,250 MW project involves the construction of a 333-mile, fully buried transmission line, which the project’s website says is already complete. New York’s Climate Leadership and Community Protection Act (CLCPA) requires New York to be powered by 70% renewable energy by 2030. CHPE is expected to be fully operational in the spring of 2026, providing power renewable at low cost directly in the New York subway. area. New York City has committed to getting 100% of its electricity from renewable sources by 2040.

Solar Gemini Project

of Nevada Solar Gemini Project is currently one of the largest solar farms under construction in the US Located 30 miles northeast of Las Vegas, this 690 MW ground-mounted photovoltaic plant will provide clean energy to more than 400,000 homes. The giant project also includes a significant energy storage component with a 1,400 MWh battery storage system, allowing energy transport to continue uninterrupted when the sun isn’t shining.

Primergy Solar and APG Asset Management own 51% and 49% respectively of Gemini Solar. The energy generated from the project will be sold to NV Energy under a power purchase agreement (PPA) at a rate of USD 0.038 kWh for a period of 25 years.

By Alex Kimani for Oilprice.com

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