Ellomay Capital Ltd., a renewable energy and power generator and developer of renewable energy and power projects in Europe and Israel, today announced its entry into a Joint Development Agreement for the development of solar photovoltaic projects in the State of Texas.
The JDA was executed with a project development company experienced in the development of energy projects, site acquisition, capital markets, and commercial management. The JDA provides for the initial development, design, construction, and finance of two solar PV projects with an aggregate projected DC capacity of 23 MW (the First Project). The First Projects are in advanced stages of development and the estimated capital costs of the First Projects are in the range of $25-$27 million. The Company’s share of the capital costs of the First Projects is estimated at approximately $18-$20 million and the balance is intended to be provided by tax equity sources with whom the Company is currently in discussions. The sites for the First Projects will be leased under long-term leases from special purpose companies (Landcos) controlled by the development team. One of the First Projects, with a DC capacity of approximately 13 MW, is expected to achieve Ready to Build status within six months. The JDA also provides for the development of three additional solar PV projects up to Ready to Build status with an aggregate DC capacity of approximately 30 MW.
The projects to be developed under the JDA will be subject to the ERCOT Distributed Generation Scheme for projects of up to 10 MW AC capacity and the applicable electricity market is the “ERCOT North” zone market. Under the DG Scheme, ERCOT (the electricity regulator of the State of Texas), allows owners of generation assets to sell electricity to Qualified Service Entities (QSEs) at market rates under Real Time or Day Ahead prices at the local nodes where the projects are located and/or to designated “Behind the Meter” clients under Power Purchase Agreements.
Ran Fridrich, CEO of Ellomay noted that “The execution of the JDA follows a very careful and in-depth analysis of the US Solar PV market by the Company and fulfills Ellomay’s strategy to enter into the US market in a careful and gradual manner. Ellomay identified potential partners for the joint development of Solar PV projects in the State of Texas with a particular focus on sites in the Metro Dallas area, a densely populated area experiencing high economic growth and large potential for future growth in electricity demand. Ellomay’s strategy will be to build the projects “close to market” in areas of high electricity demand, thus reducing risks such as curtailment and other operating risks. Ellomay views the entry into the Ercot North Market as an important but careful step into the vast US electricity market, focusing on the State of Texas that has and is experiencing high economic and electricity demand growth.”