A crucial and historic steel mill in Pueblo, Colorado, will be the first in North America to rely on solar power, according to Skip Herald, the CEO of steel and mining company Evraz North America.
The 300 MW Bighorn Solar Project, developed by Lightsource BP and located on mill company land, just closed on a $285 million financing package. Xcel Energy, as the power provider for the steel mill, will purchase the power generated by the solar farm under a long-term contract with Lightsource BP. It’s the largest on-site industrial solar facility, according to the developer.
The deal on the solar project was made last year after Evraz, Xcel’s largest power buyer in Colorado, threatened to move out of state “without assurances of low electricity rates,” as per reporting in the Denver Post.
Kevin Smith, CEO of the Americas for Lightsource, said: “The more than 700,000 solar panels can provide 90% of the plant’s energy needs at peak production” – and 95% of the mill’s annual energy demand, according to other reports.
The plant will turn recycled scrap metal into “clean steel, including the most sustainable rail in the world,” according to Herald. Evraz is a Russian-owned steel and mining conglomerate.
Recent studies have found that 14% of steel firms’ market value is in jeopardy if they are unable to decrease their environmental impact.
The iron and steel sector is the “world’s largest industrial source of climate pollution,” according to the Cold Steel, Hot Climate report, which notes that steel represented approximately 5% of final energy use and 7% of emissions worldwide in 2013. In steel-making regions, many steel plants are often the largest, or one of the largest, electricity customers – the exact case for the Pueblo, Colorado plant.
Lightsource is GW scale busy
Utility scale solar developers like Lightsource BP are being kept busy with the proliferation of 100 MW-plus solar projects now in development. These large solar projects are no longer driven by RPS edicts but by corporate buyers and the sheer competitive pricing of solar or solar-plus-storage compared to other generation sources.
Smith, the CEO at Lightsource BP Americas, noted that a few years ago, his buyers were almost entirely utilities – and today it’s more like 50-50 utilities and corporate energy consumers. L3Harris, a defense contractor, just signed a virtual power purchase agreement with Lightsource BP for up to 100 MW of the power from the 135 MWac Elm Branch Solar project in Ellis County, Texas.
Smith added that it’s not just California but states like Alabama and Arkansas that are building big solar.
Lightsource BP secured tax equity financing for the Bighorn project from Bank of America. The debt for the facility was provided by Sumitomo Mitsui Banking Corporation, Societe Generale and Export Development Canada. The balance of the equity requirements will be invested by Lightsource BP. CohnReznick Capital was the tax equity advisor for the project.
Smith called it a pretty standard financing structure with conventional debt finance largely provided by non-U.S. banks.
Source: pv magazine