The US Internal Revenue Service (IRS) has selected a ‘Smart Grid’ solarphotovoltaic (PV) project being studied by Tampa-based SeminoleElectric Cooperative, for access to up to $34 million in low costproject funding.
On October 27, 2009, the IRS awarded Seminolethe right to issue up to $34 million in new Clean Renewable EnergyBonds (CREBs) to finance a potential 1-5 megawatt (MW) solar energyproject. Seminole is evaluating its natural gas-fueled MidullaGenerating Station, in southwest Florida, as a site for the facility,which would consist of an array of solar photovoltaic (PV) panels andassociated energy storage capabilities.
Seminole, the wholesalepower supplier to 10 Florida distribution cooperatives, currently meetsabout 4% of its member systems’ energy needs with renewable energy. TheCooperative estimates the solar facility will have a 20% capacityfactor. A battery bank would be used to allow the energy produced bythe panels to be stored for later use as needed.
A total of $2.2 billionof congressionally authorized new CREB awards, announced on October 27,was awarded to 805 proposed projects. The IRS awarded approximately$458 million of that new CREB funding to projects proposed byconsumer-owned electric cooperatives in 17 states.
The originalCREB program was created by the Energy Policy Act of 2005. The new CREBprogram is funded through an $800 million allocation in the EnergyImprovement and Extension Act of 2008 and a $1.6 million ‘stimulus’allocation in the American Recovery and Reinvestment Act of 2009.
BothCREB programs are designed to encourage the development of new, cleanenergy projects, which are often more costly than traditionalresources, and give authorized issuers the right to issue bonds to fundqualifying projects that benefit both customers and the environment.
Bondholders— new CREB lenders or purchasers — receive a variable quarterlytax-credit, the amount of which is set by the US Treasury. Under thenew CREB program, authorized bond issuers may issue their bonds at adiscount, or make supplemental interest payments.
Seminole haspublished a request for proposals for the PV portion of the project.Bidding is open to prequalified vendors with experience in developinglarge-scale PV projects. The Cooperative expects to make a finaldecision on developing the project by March 2010.
Seminolealso has applied for a US Department of Energy Smart Grid grant tosupport the battery bank portion of this project, in partnership withthe National Rural Electric Cooperative Association and its researchdivision, the Cooperative Research Network.