Chevron Teams Up With Kit Carson Electric to Develop CPV (CVX)
Today, Chevron Mining Inc., a subsidiary of oil major Chevron Corp, announced that sister company Chevron Technology Ventures(CTV), will build a one megawatt Concentating photovoltaic (CPV)project on CMI’s molybdenum mine in Questa, New Mexico to beginoperation later this year.
Confused yet? If not, then how about this:the project represents a departure from Chevron’s normal solardevelopment strategy, which is to use its other subsidiary Chevron Energy Solutions(CES) to construct and finance projects. This is what happens when acompany Chevron’s size gets into the solar project development game.
Let’s take a step back. Chevron has been developing PV projects,mostly through CES, for years. Its primary clients, as in this case,have always been Chevron Corp-owned sites such as refineries, offices,and oil fields. CES has about 22 MW of operational PV capacity and atleast another 50 MW in the pipeline. Its largest planned project is s45 MW system in Lucerne Valley,Calif. With a signed PPA from Southern California Edison, it isexpected to begin construction this year and begin operation in 2012.The project will use First Solar CdTe modules and will be constructedin two phases (20 MW and 25 MW).
Now, on to today’s announcement. In the presence of Governor BillRichardson, Chevron Mining Inc. announced that its New Mexico sitewould soon be home to a one megawatt CPV installation using a Concentrix Solar GmbHsystem. Although a one megawatt project is nothing to scoff at, itisn’t usually big news. But this announcement warrants considerationfor four reasons:
First, once operational it will become the largest CPV project inthe United States. This says as much about the CPV industry as it doesabout the project itself. The CPV market has been slow to grow, andsignificant cost reductions are hard to achieve with no realmanufacturing volume. But there have been a number of recent highconcentrating PV project announcements, so it’s unlikely the Chevronproject will retain the title for long.
Second, the fact that the project is being developed by CTV, ratherthan CES, tells us something. CTV is essentially the venture capitalarm of Chevron, and its announced solar investments to date have been Brightsource Energy (CSP) and Konarka(Organic PV). CTV’s mission is to "identify, acquire, test, andvalidate and – if appropriate – help integrate" new technologies intothe rest of Chevron’s business. Concentrating PV is indeed a newtechnology, so it makes sense that CTV would develop this project. Butif this project goes well, I wouldn’t be surprised to see CTVannouncing an investment in or acquisition of a CPV company.
Third, the project is yet another example of New Mexico’s rapid ascension as a state solar market, as we’ve been saying for months.Given its high insolation and unique incentive structure, New Mexico ispoised to become one of the main second tier solar markets despitehaving only one megawatt cumulative installed at the end of 2008. Sincewe predicted this in our December report The United States PV Market Through 2013: Project Economics, Policy, Demand and Strategy, New Mexico’s utility-scale PV project pipeline has grown to over 400 MW.
And finally, power from the Chevron project will be sold through aPPA with local utility Kit Carson Electric Cooperative. Seriously.
Next up: Exxon inks a deal with Daniel Boone Power & Light
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