Despite the renewable energy industry’s concerns about the impacts of COVID-19, some deals are still getting done. Lightsource BP, a United Kingdom-based developer backed by oil major BP, said Thursday it had closed on a $250 million financing package for a 260-megawatt solar project in Texas.
Kevin Smith, Lightsource BP’s Americas CEO, pitched an optimistic outlook for the project and the company’s global development plans despite the uncertainty related to COVID-19. Lightsource BP is active in European markets like Italy and Spain, where coronavirus has shut down daily life.
“We view solar energy projects and energy supply generally as an essential business for U.S. and worldwide markets,” Smith told GTM on Thursday. “It’s important to keep our focus on a clean energy future.”
The company has stood behind its existing global plans to install 10 gigawatts of solar through 2023, with about 4 gigawatts of that in the United States.
As for the Texas project, already under construction, “social distancing issues are obviously key,” Smith said. But Lightsource BP believes it will be allowed to continue construction because its current workforce of 125 will be spread over the project’s 1,500 acres northeast of Dallas. Eventually the project will employ 300, with Swinerton Renewable Energy managing construction.
Swinerton has precautions in place, disallowing workers from assembling in groups for coffee breaks, meetings or transportation around the site, Smith said. Texas’ Department of Health and Human Services had recorded 161 cases of the coronavirus in the state and three deaths from the disease as of Thursday.
The renewables industry is only beginning to grapple with slipped project timelines resulting from the coronavirus pandemic. Industry groups including the Solar Energy Industries Association and the American Wind Energy Association are working in Washington, D.C., to secure tax credit extensions and flexibility requirements for tax equity.
Smith said he’d like to see the energy industry deemed an essential workforce, which would allow project construction to continue even in the face of mandated shutdowns. San Francisco’s “shelter in place” order counts electrical and construction work as essential, but does not specify whether that includes renewables projects (which, in San Francisco, would likely only refer to residential solar).
BP, which recently increased its stake in Lightsource BP, will transact power from the Texas solar project through its trading arm.
Backed by BP in a time of uncertainty
Europe’s fossil fuel giants are growing their bets in the power sector as a hedge against low oil prices and business changes due to climate change.
BP hadn’t been as aggressive in these efforts as peers like Royal Dutch Shell and Total, but the company recently announced a goal to hit net zero emissions for its own operations as well as those from its products by 2050. Solar is likely to factor significantly in the major’s plans to get there.
BP’s backing provides Lightsource with significant “financial muscle,” Smith said, and the oil giant’s recent decision to increase its stake has piqued more lender and investor interest in the solar company.
Lightsource BP hopes to reach financial close on nearly 1 gigawatt of projects in the U.S. this year, though the coronavirus may complicate those efforts. The developer put about 400 megawatts into construction in 2019, a year when the U.S. solar market grew 23 percent, according to Wood Mackenzie Power & Renewables.