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 percent of its member systems’ energy needs with renewableenergy. The Cooperative estimates the solar facility will have a 20percent capacity factor.
A battery bank would be used to allowthe energy produced by the panels to be stored for later use as needed.A Seminole spokesperson says storage capabilities increase the utilityof solar facilities since peak solar production hours do not alwayscoincide with periods of highest energy demand.
A total of $2.2billion of congressionally authorized new CREB awards, announced onOctober 27, was awarded to 805 proposed projects. The IRS awardedapproximately $458 million of that new CREB funding to projectsproposed by consumer-owned electric cooperatives in 17 states.
Theoriginal CREB program was created by the Energy Policy Act of 2005. Thenew CREB program is funded through an $800 million allocation in theEnergy Improvement and Extension Act of 2008 and a $1.6 million‘stimulus’ allocation in the American Recovery and Reinvestment Act of2009.
Both CREB programs are designed to encourage thedevelopment of new, clean energy projects, which are often more costlythan traditional resources, and give authorized issuers the right toissue bonds to fund qualifying projects that benefit both customers andthe environment.
Bondholders — new CREB lenders or purchasers— receive a variable quarterly tax-credit, the amount of which is setby the US Treasury. Under the new CREB program, authorized bond issuersmay issue their bonds at a discount, or make supplemental interestpayments.
Seminole has published a request for proposals for thePV portion of the project. Bidding is open to prequalified vendors withexperience in developing large-scale PV projects. The Cooperativeexpects to make a final decision on developing the project by March2010.
Seminole also has applied for a US Department of EnergySmart Grid grant to support the battery bank portion of this project,in partnership with the National Rural Electric Cooperative Associationand its research division, the Cooperative Research Network.