Power Generation and Supply Market Recap, August 2023

Our August 2023 Power Generation & Supply Market Recap is a snapshot of the data and information we curate.  We share industry drivers, notable projects, recent mergers and acquisitions, interesting reads, and updates on upcoming meetings and conferences.

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Industry Drivers

Our data team tracks new and updated industry drivers. Here are some recent drivers we have been following in August:

Colorado Establishes New Standards for Large Buildings to Use Less Energy, Reduce Costs for Owners and Tenants

Status: Proposed

Organization: Colorado State Legislature 

Summary: On August 17, 2023, Colorado's Air Quality Control Commission introduced new energy performance standards for large buildings to combat greenhouse gas (GHG) emissions. The initiative is expected to reduce tenants' energy costs and lower long-term operational expenses for building owners. The rule applies to around 8,000 buildings, primarily commercial, multifamily, and public structures of 50,000 square feet or larger. Exceptions include single-family homes, certain industrial buildings, and others. The rule aligns with Colorado's statutory GHG reduction targets of 7% by 2026 and 20% by 2030, based on 2021 levels. Building owners who don't meet the standards must explore strategies to reduce energy usage and emissions. The rule provides flexibility and various pathways for compliance, such as optimizing energy use, upgrading inefficient systems, and incorporating renewable energy sources. The Colorado Energy Office is working on compiling financial assistance options for building owners to facilitate compliance.

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Notable Projects

FirmoGraphs tracks notable projects from the proposal stage to becoming effective. Here are some of the recent notable projects we have been tracking.

$1 Billion Charro Creek Solar Project

Type: Generation - Solar 

Status: Proposed

Organization: Solar Proponent

Region: Texas

Summary: Solar Proponent will construct the Charro Creek Solar. The Project is a solar facility with 650 megawatts of direct current (MWdc)/500 MW of alternating current (ac) capacity and 500 MWac battery energy storage in Goliad & Kames County, Texas. The Project is expected to enter commercial operation in the first quarter of 2026. According to the 2022 Annual Technology Baseline (ATB), solar with colocated energy Projects will cost $1,540 per kW. Based on this value, FirmoGraphs estimates the Project will cost $1 billion.

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$780 Million Dogwood Creek Solar Project

Type: Generation - Solar 

Status: Proposed

Organization: Solar Proponent

Region: Texas

Summary: Solar Proponent will construct the Dogwood Creek Solar Project. The Project is a solar facility with 506 megawatts direct current (MWdc)/389 MW alternating current (ac) capacity and 389 MWac battery energy storage in Bastrop County, Texas. The Project is expected to enter commercial operation in the first quarter of 2026. According to the 2022 Annual Technology Baseline (ATB), solar with colocated energy Projects will cost $1,540 per kW. Based on this value, FirmoGraphs estimates the Project will cost $780 million.

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$560 Million Pike County Energy Storage Project

Type: Generation - Energy Storage 

Status: Proposed

Organization: Indianapolis Power & Light Company

Region: Indiana

Summary: Indianapolis Power & Light Company submitted filings to the Indiana Public Utilities Commission for the Pike County Energy Storage. The Project comprises 200 megawatts (MW)/800 MW-hours battery system and two collector substations owned and operated by a subsidiary of AES Indiana. The construction will commence on September  30, 2023, and is expected to enter commercial operation on December 1, 2024. According to the 2022 Annual Technology Baseline (ATB), stand-alone energy storage Projects will cost $2,785 per kW. Based on this value, FirmoGraphs estimates the Project will cost $560 million.

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$540 Million Keys Hollow Solar Project

Type: Generation - Energy Storage 

Status: Proposed

Organization: Indianapolis Power & Light Company

Region: Texas

Summary: Indianapolis Power & Light Company submitted filings to the Indiana Public Utilities Commission for the Pike County Energy Storage. The Project comprises 200 megawatts (MW)/800 MW-hours battery system and two collector substations owned and operated by a subsidiary of AES Indiana. The construction will commence on September 30, 2023, and is expected to enter commercial operation on December 1, 2024. According to the 2022 Annual Technology Baseline (ATB), stand-alone energy storage Projects will cost $2,785 per kW. Based on this value, FirmoGraphs estimates the Project will cost $560 million.

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$430 Million Mammoth North Solar Project

Type: Generation - Solar 

Status: Proposed

Organization: Mammoth North LLC

Region: Indiana

Summary: Mammoth North LLC submitted filings on August 14, 2023, to the Federal Energy Regulatory Commission for the Mammoth North Solar Project. The Project is a solar facility with 400 megawatts (MW) capacity in Starke County, Indiana. The construction will commence on November 1, 2023, and is expected to enter commercial operation on or before July 31, 2024. According to the 2022 Annual Technology Baseline (ATB), solar Projects will cost $1,074 per kW. Based on this value, FirmoGraphs estimates the Project will cost $430 million.

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$430 Million Hill Solar I Project

Type: Generation - Solar 

Status: Proposed

Organization: Hill Solar I, LLC

Region: Texas

Summary: Hill Solar I, LLC will construct the proposed Hill Solar I Project. The Project is a solar facility with 400 megawatts (MW) of alternating current on approximately 3,554 acres of privately owned land in Hill County, Texas. The construction will commence in February 2023 and is expected to enter commercial operation in December 2024. According to the 2022 Annual Technology Baseline (ATB), solar Projects will cost $1,074 per kW. Based on this value, FirmoGraphs estimates the Project will cost $430 million.

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Notable M&A

The following  M&A transactions in the Power Generation and Supply Industry stand out in the month of August:

• On August 15, 2023, Occidental announced that a wholly owned subsidiary has entered into a definitive purchase agreement to acquire all the outstanding equity of Carbon Engineering Ltd. for total cash consideration of approximately $1.1 billion, to be made in three approximately equivalent annual payments, with the first at closing.
  
  
• On August 16, 2023, Energy Transfer LP and Crestwood Equity Partners LP announced that the parties have entered into a definitive merger agreement pursuant to which Energy Transfer will acquire Crestwood in an all-equity transaction valued at approximately $7.1 billion, including the assumption of $3.3 billion of debt, based on the closing price on August 15, 2023.
  
  
• On August 21, 2023, Permian Resources Corporation and Earthstone Energy, Inc. announced that they have entered into a definitive agreement under which Permian Resources will acquire Earthstone in an all-stock transaction valued at approximately $4.5 billion, inclusive of Earthstone’s net debt.

What We Are Reading

Here are some recent articles our team has been reading:

• The first US nuclear reactor built from scratch in decades enters commercial operation in Georgia
• BOEM Announces Three Final Wind Energy Areas Offshore Delaware, Maryland, and Virginia
• EPA Proposes to Deny Alabama’s Coal Ash Permit Program and Better Protect Local Communities from Pollution
• 4 new offshore wind power projects proposed for New Jersey Shore; 2 would be far out to sea
• DOE Announces $46 Million to Boost Energy Efficiency and Slash Emissions in Residential and Commercial Buildings
• Biden-Harris Administration Announces Up To $1.2 Billion For Nation’s First Direct Air Capture Demonstrations in Texas and Louisiana
• Pearce Renewables Acquires Natron Resources Inc.
• Duke Energy files resource plan to serve the future energy needs of a growing and prosperous South Carolina
• Otter Tail Power completes Hoot Lake Solar, first large-scale investment in solar generation
• BOEM identifies two wind energy areas with up to 2.6 GW of potential offshore Oregon
• Boston grants aim to lower carbon footprint of affordable housing
• With first-of-its-kind PTC transfer, AEP sells 1.3 GW of unregulated renewables to Invenergy-led group
• Company that leaked radioactive material will build barrier to keep it away from Mississippi River
• U.S. Department of Energy Projects Strong Growth in U.S. Wind Power Sector
• TVA to invest $15B in system upgrades, including $100M for demand response programs
• Appalachian Power proposes to upgrade grid
• Minnesota regulators clear way for 10-year operating extension of Xcel’s Monticello nuclear plant

Meeting Planner

In this over-digitized age, there is no replacement for face-to-face meetings with your prospects and customers! We track meetings of interest to our customers serving the US power generation and supply industry so you won’t miss upcoming meetings and deadlines. Also, FirmoGraphs has recently implemented a free-of-charge service for tracking notable infrastructure events. 

Meetings in September and October 2023

Early Bird Registration

• Event: American Public Power Association
  Dates: November 12 - November 13, 2023
  Deadline for Early Registration: October 13, 2023
  
  
• Event: American Public Power Association
  Dates: October 15 - October 18, 2023
  Deadline for Early Registration: September 15, 2023
  
  
• Event: Energy Central
  Dates: December 5 - December 6, 2023
  Deadline for Early Registration: October 27, 2023