Embracing the Sunny Days
With an average of 284 sunny days a year, California is a prime location for solar energy generation, something renewable energy provider Terra-Gen has capitalized on for years. As Terra-Gen continues to expand to meet increasing demand, it must also comply with the state’s stringent environmental requirements— which are among the toughest in the nation.
Terra-Gen’s installation franchise is a 22-square-mile solar farm in southern California. Built in two phases, the first came on line in 2022 with 345 megawatts (MW) of capacity; the second phase will add another 410 MW in mid-2023, making the combined installation one of the largest in the country. CoBank participated in financing the first phase and, as coordinating lead arranger along with six Farm Credit partners, provided $227 million to fund this second project phase.
“Our previous work with CoBank demonstrated the team’s knowledge, flexibility and commitment,” said Jeff Cast, Terra-Gen’s managing director of finance. “We’ve built a firm foundation of trust and respect, and we value the seamless delivery of the large financings we need.”
The drivers behind renewable energy development in California are strong: in 2018, it was the second state to establish a 100% carbon-free or net-zero emissions goal, which carries a 2045 deadline. This will require an immense jump in renewable generation over the next two decades. At the same time, energy demand is increasing, in part due to the growth in electric vehicle adoption, driven by state regulation requiring that all passenger vehicles sold in-state be electric or hybrid by 2035. The solar energy provided by Terra-Gen’s installation will be a key contributor to meet these ambitious goals, especially as the state’s coal-fired plants will be retired over time.
However, simply generating electricity from the sun is only part of the challenge. Unlike coal-fired power plants, which operate and deliver power to the grid 24/7, solar energy is only produced when the sun shines. In places like southern California, when millions of air conditioners and evening entertainments are being turned on right as the sun is losing its power, this creates a critical gap. Terra-Gen’s solution is an essential parallel project: a powerful battery installation to store 1,786 MWh hours of electricity generated by the photovoltaic panels.
“Battery storage allows us to shape the delivery of power, effectively saving it during the peak of mid-day and releasing it into the grid in the evening when demand is high but production is low,” said Cast. “Batteries allow us to buffer the natural intermittency of using the sun as a fuel source, increasing the number of hours we’re able to deliver solar-generated power and bringing us closer to a carbon-free energy grid.”