Texas-based utility-scale solar developer 7X Energy has sold its 130MWac Elara Energy Project to KOMIPO America, a subsidiary of Korea Midland Power, in the latest move by Korean investors into the US renewable energy sector.
Elara, located in Frio County, Texas, is currently under construction, and is expected to reach full commercial operation in the fourth quarter of 2021.
“We are committed to expanding our renewables portfolio in the US, to continue to lead and promote the growth engine of the global renewable energy industry,” says KOMIPO chief executive officer Hobin Kim, describing Elara as "a milestone project" for the company.
Morgan Stanley Renewables is anticipated to be the sole tax equity investor for the Elara project. US renewable energy projects are developed with the help of tax breaks, and the economics of a project depend partly on having a US taxpayer that can make use of the tax allowances.
The power produced by Elara and its environmental tax advantages are being sold under three long-term offtake agreements. About 30MW of the energy will be sold to EDF Energy Services under a long-term power purchase agreement. The remaining 100MW of energy is subject to a long-term hedge agreement with Morgan Stanley Capital Group. Lastly, 100MW of renewable energy credits (RECs) will be sold to Fathom Energy under a long-term purchase agreement.
Swinerton Renewable is the engineering, procurement, and construction (EPC) contractor and SOLV, a subsidiary of Swinerton, will manage the operations and maintenance for the project. The project is using Jinko modules.
CohnReznick Capital served as financial adviser to 7X Energy, while Norton Rose Fulbright was legal counsel. White & Case was counsel to KOMIPO, and Mayer Brown was counsel to Morgan Stanley Renewables. Katten Muchin Roenman acted as counsel to Morgan Stanley Capital Group.
Korea Midland Power is one of the oldest players in the Korean power industry. Last year it completed construction of the world's first large-scale underground LNG-fired thermal power plant, located in Seoul.
The company is increasing its international presence. It operates the Navanakorn Combined Cycle Power Plant in Thailand, and has developed and operated a large photovoltaic plant in Boulder City, Nevada. It is also responsible for 6% of electricity supply in Java, Indonesia through power plants including the Cirebon Thermal Power Plant.
7X Energy is an independent power producer that develops, owns, and provides asset management services for utility-scale solar projects. With the Elara transaction, the company has now successfully originated over 2,100 MWdc of solar projects either in operation or under construction.