Warren Buffett Bets on Solar with MidAmerican Buy of Topaz PlantDecember 08, 2011 by Jeff Shepard
MidAmerican Energy Holdings Company, which is owned by Warren Buffett, announced that it has entered into definitive agreements to acquire the Topaz Solar Farm from First Solar, Inc. The 550-megawatt photovoltaic power plant being built in San Luis Obispo County, California, will have the capacity to generate enough renewable energy to power approximately 160,000 average California homes. The more than $2 billion Topaz project is one of the two largest PV projects in the world, both being built by First Solar.
"MidAmerican is the No. 1 owner of wind-powered energy generation among U.S. rate-regulated utilities. Adding solar energy to our generation portfolio is a strategic move to invest in yet another renewable energy source," said Greg Abel, chairman, president and CEO of MidAmerican Energy Holdings Company. "Our investment in wind resources benefits both our customers and the environment, and our entry into the solar energy industry expands our renewable energy footprint and will help meet current and future energy needs in a manner that reflects our ongoing commitment to environmental respect and cost-effective generation.
"As energy needs continue to increase, the Topaz project will allow MidAmerican to produce renewable energy for thousands of Californians. This project also demonstrates that solar energy is a commercially viable technology without the support of governmental loan guarantees and reflects the type of solar and other renewable generation that MidAmerican will continue to seek to add to its unregulated portfolio."
First Solar has agreed to construct, operate and maintain the Topaz project for MidAmerican. Construction began in November 2011 and is expected to be complete by early 2015. The project will create approximately 400 construction jobs and 15 ongoing operations and maintenance jobs. According to an economic benefits study by The Brattle Group and California Polytechnic State University, the project is estimated to infuse $417 million into the local economy, the majority of which will be generated during construction, with the remainder over the project’s minimum 25-year operating period.
"First Solar is very pleased to bring together one of the world’s most significant solar projects with MidAmerican, one of the leading investors in renewable energy," said Frank De Rosa, First Solar senior vice president of project and business development for North America. "This demonstrates solar is an important part of a renewable generation portfolio."
The closing of MidAmerican’s acquisition of Topaz is contingent on the satisfaction of certain closing conditions specified in the acquisition agreement, including certain required actions with respect to the project’s permits and electrical interconnection arrangements. The project sale is not contingent on MidAmerican obtaining debt financing.
Pacific Gas and Electric Company will purchase the electricity from Topaz under a 25-year power purchase agreement, helping California to meet its mandate to generate 33 percent of its power from renewable sources by 2020.
Developed by First Solar, the Topaz project will incorporate the company’s advanced thin-film PV modules, which generate electricity with no emissions, waste or water use and have the smallest carbon footprint of any PV technology. Electricity generated from the Topaz project will displace approximately 377,000 metric tons of CO2 per year – the equivalent of taking approximately 73,000 cars off the road.
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