US renewable energy developer DE Shaw Renewable Investments (DESRI) has started construction at its 200MWac San Juan solar and storage project in the US state of New Mexico.
This phase of the project, dubbed “San Juan 1” by DESRI, consists of the solar farm, alongside a 100MWac battery storage facility, all of which DESRI expects to come online in mid-2024.
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The company announced that it had reached financial close for this phase, paving the way for construction to begin, and added that the later phases of construction will bring the total capacity of the San Juan project up to 400MWac, which would make the project the company’s largest by capacity.
The project is also notable as it looks to replace the capacity of the San Juan Generating Station, a coal-fired power plant in the region that was decommissioned by its owner, the Public Service Company of New Mexico (PNM), last year.
While the coal plant boasted a larger total capacity than DESRI’s San Juan project, with a nameplate capacity of 1.8GW, its final operating unit had a capacity of around 555MW, so its replacement with the San Juan project will only lower the region’s total power capacity by around 150MW. DESRI, and others in the solar sector, will be optimistic that this slight reduction in total capacity is justified by the transition from coal to a renewable power source.
“As a capacity replacement for a retired coal generator, the project is an important part of New Mexico’s transition to state of the art, cost-effective renewable energy, firmed by battery storage,” said DESRI chief commercial officer Thomas de Swardt. “We deeply appreciate the partnership of PNM, San Juan County, the San Juan Citizen’s Alliance, the project’s lenders and numerous other stakeholders and supporters in the community in achieving this milestone.”
The project has also cleared a number of logistical hurdles. DESRI announced that the solar plant will connect to the state’s energy grid via the infrastructure left in place around the decommissioned coal plant, eliminating the need to build new grid infrastructure, and the company has signed a power purchase agreement to sell electricity from the project to PNM for the next 20 years.
The effective integration of a renewable power project into an area that once relied on fossil fuels is a key component of the Inflation Reduction Act. Earlier this year, the US Treasury offered guidance regarding transitioning to renewable power to communities historically reliant on fossil fuels, and the success of the San Juan project could be an important demonstration of this principle.