Hecate Announces Solar Deal in Cape Charles

Transparency: outlook murky.

Transparency: outlook murky.

by James A. Bacon

Governor Terry McAuliffe has announced yet another utility-scale solar deal, this one a 20-megawatt project in Cape Charles in Northampton County. The “Cherrydale Project” will generate enough energy to power more than 3,000 households throughout the region, states the governor’s press release.

The project was assembled by a newcomer to the Virginia solar scene: Chicago-based Hecate Energy LLC.

“As a Virginia native with family ties to the Eastern Shore region, the 20-megawatt Cherrydale solar development has been an exciting and gratifying project with which to be involved,” said Preston Schultz, Hecate’s director of development. “We are grateful to Northampton County for their support throughout the development of the Cherrydale Project.”

A quick perusal of the Internet revealed that Hecate’s request for a special use permit ran into local opposition from residents who opposed the loss of 150 prime acres of farmland in land zoned for agricultural  use. On the positive side, according to the Cape Charles Mirror, the project is expected to generate $750,000 in real estate taxes over 35 years, while Hecate offered $200,000 in a “community improvement grant” for Northampton County to use as it wished.

The “permit by rule” issued by the Virginia Department of Environmental Quality contains provisions to ensure that the environment is protected at the Cape Charles site.

“In my opinion, the Commonwealth of Virginia Permit by Rule process strikes the right balance between protecting critical local environmental, cultural and historical resources while at the same time providing opportunities for the new clean energy economy to take root and flourish in the Old Dominion,” Schultz said in the press release.

The 185-acre facility will utilize an “innovative tracking system,” noted the press release, that maximizes energy output from the available sunlight. The facility will interconnect with the Old Dominion Electric Cooperative and A&N Electric Cooperative system.

Bacon’s bottom line: After a slow start, utility-scale solar is taking off in Virginia. As usual, however, the governor’s press release doesn’t provide the data that allows us to calculate the cost-per-kilowatt of the up-front capital investment, much less how the levelized cost (cost of construction, financing, operation and fuel over time) compares to other energy alternatives.

We don’t even know who Hecate will sell the electricity to. The fact that the solar plant will interconnect with two Eastern Shore electrical cooperatives does not tell us who will ultimately buy that electricity. Will it be sold into the PJM wholesale market? Has an Amazon Web Services-like buyer contracted to purchase the power? Will ratepayers of the local electrical co-ops purchase the power?

The deal may be great, it may be a dog. We don’t know, and if other solar deals are any indication, the terms and economics of this one will not be released to the public — although, I must be clear, I have not asked Hecate for details.

Speaking generally, not of this deal in particular, the lack of transparency invites suspicion. If the economics of Virginia’s solar deals were beneficial to ratepayers, one might reason, the players involved would be eager to share the news. The fact that the information is not shared suggests that they have something to hide. I hope my suspicions are unfounded. But the deal makers could dispel them easily by making more information available.

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19 responses to “Hecate Announces Solar Deal in Cape Charles

  1. depending on what you read for which project – the estimate of homes served varies

    for the Buckingham project.. one article says – . to power an estimated 3,500 homes, according to solar energy industry figures.

    another says : Solar energy facility capable of powering 4,400

    another : There is enough solar energy installed in the state to power 2,200 homes.

    but if you search how many homes a megawatt of power will serve – you things like 164 – which multiplied by 20 = 3280

    and that works out to about 6000 kwh per home.

    DVP also gives weird numbers

    ” – Dominion Virginia Power today announced the company is proposing to build an approximately 1600-megawatt, natural gas-fueled power station in Greensville County. The station, which would cost more than $1 billion, would be a combined-cycle facility consisting of three gas-fired combustion turbines and a steam turbine designed to generate enough power for 400,000 typical homes at peak demand.”

    at any rate – the census folks seem to think there are about 7000 houses in Northampton.

    so this solar will serve half … and one more like it would, in theory, server all the homes in that county..

    for those that say solar can’t power a lot of homes without a lot of land – this seems not that hard.

    of course – they gotta have power at night… but still solar during the day would seem to cut by half (if there were two solar), the amount of fossil fuels needed …

    If you were to replicate this across all the rural counties in Va with each county using about 400 acres for solar – to power the whole country during the daylight hours…

    where am I going wrong on my thinking?

  2. Larry:

    A few points to consider:

    1.

  3. “Speaking generally, not of this deal in particular, the lack of transparency invites suspicion. If the economics of Virginia’s solar deals were beneficial to ratepayers, one might reason, the players involved would be eager to share the news. The fact that the information is not shared suggests that they have something to hide. I hope my suspicions are unfounded. But the deal makers could dispel them easily by making more information available.”

    It is not clear whether ratepayers are affected by this according to your article. Solar developers consider the financial structure of their deals to be part of their competitive advantage and want to keep it proprietary. Third-party deals for conventional generation often have limited transparency. Dominion’s negotiated rates for the Transco and Atlantic Coast Pipeline are also not disclosed to the public. I am not defending any of this, but I wouldn’t necessarily jump to the conclusion that these solar projects have any more to “hide” than any of the other types of energy projects that also lack transparency.

    Also it is not an accurate test of the value of a solar project to test its capital cost or its levelized cost of energy against a plant that is designed to serve baseload demand. Solar is offsetting power produced by plants that serve the intermediate and peak loads. These plants produce power at a considerably higher cost than baseload plants. If a solar project produces energy at or below the typical PJM clearing prices for energy during the intermediate and peak load periods, it is a winner for the ratepayers and the utility. All without any emissions or future fuel price increases.

    • Exactly so! It’s likely that this project has a buyer whose long-lead-time term contract(s) helped finance it, but it could have been built on spec just to sell to the PJM wholesale energy market. Either way, it’s not a DVP ratepayer issue (unless DVP turns out to be the buyer).

      As a consequence, transparency really isn’t appropriate here, as these are transactions in the competitive generation marketplace.

  4. Something seems to have changed since Amazon was forced to do solar over in Md and at that time I thought the SCC was involved and not DEQ.

    So now, we have DEQ “permit by rule” and no SCC and as far as I can tell not a whole lot from VDP.

    I think it’s amusing that Jim is demanding “transparency” that he did not feel as strongly about with DVP and their power plants and pipelines,

    seems to be different standards of transparency desired if it is “solar”, eh? So.. when Dominion does not provide full info – it’s not the Gov’s fault but when someone does Solar or it’s Oceania it is? hmmmm

    anyhow.. not that long ago, we had ” folks can’t build solar because VDP has got the GA to cook up laws and regs that allow VDP to discourage it” … to now.. where it appears, folks are able to build 200 acre “utility” grade solar and the SCC has nary a role in it?

    Sounds to me like there is a story here… perhaps we need some good old fashioned investigative journalism to get some of that good ole “transparency”, eh?

    • “Forced to do solar over in MD”? Don’t remember that — but, yes, something has changed in VA, as TomH pointed out, with that exclusion from SCC jurisdiction for solar generation < 100 MW. There are other people who regulate the construction of a power plant. There's zoning, which for this sort of thing usually means a special use permit; and there's a building permit, and an environmental permit from, of course, DEQ.

      In fact, the "exemption" from SCC review and approval has a downside: the SCC review displaces some other agency review processes so its absence may only complicate life for a solar developer.

      On your other point about "homes served" those numbers are all a bunch of hooey. There is no such thing as a typical home, given the wide range of appliances and sources of heating, the wide range of structures (apartments, standalone buildings), lifestyles, degree of insulation etc. Then even if you picked a "typical home," you have to decide if you are measuring the maximum demand or the total energy consumed over a given time frame (and do you account for, e.g., seasonal variations in these?). With solar, are you talking daytime only or some kind of average over longer time periods.

      The only number that really matters to the rest of the world is the "nameplate" design maximum output.

    • I think it’s amusing that Jim is demanding “transparency” that he did not feel as strongly about with DVP and their power plants and pipelines.

      You’ll find more about what makes Dominion tick on this website than any other media outlet in Virginia — both from a journalistic perspective as well as the informed commentary of the commenters.

      • then why were you asking about Oceania and blaming the Gov when DVP and the SCC should have been providing?

        and why have we not got a decent explanation from DVP about the Amazon deal and the Buckingham deal since that solar is connecting to DVP grid?

        The informed commentary here – is also asking questions and not getting answers.

        The conventional wisdom to this point – both from your commentary and reader comments has been that 3rd party cannot set up utility-scale solar unless DVP agrees; that’s the reason Amazon went to Md.

        so NOW, we’re getting the utility grade solar – that you told us that would not happen because it was not “reliable” and would destabilize the grid.

        seriously – much of the commentary to this point has been that solar at utility scale was not possible in Virginia – and now it is

        how come Amazon could not be “permitted by Rule” and Cape Charles can?

        so what’s changed?

        Surely DVP has the answer to these questions. Right?

    • Larry, can you provide a link of some sort to “Amazon..forced to do solar over in Md”? I’ve been Googling and just haven’t found any Amazon solar projects in Maryland. Of course, it may have been under an affiliate banner.

  5. re: ” … If the economics of Virginia’s solar deals were beneficial to ratepayers, ”

    why does it have to be – if it is a pure business venture?

    I would think as a business in a competitive industry that they would be no different than – say Virginia Natural Gas who said they could not provide data on gas demand in Hampton because it was “proprietary” …

    so why do they have to be transparent to the public?

  6. Well, gee, they pay for it, don’t they?

  7. “The conventional wisdom to this point – both from your commentary and reader comments has been that 3rd party cannot set up utility-scale solar unless DVP agrees; that’s the reason Amazon went to Md.”

    There is a difference between Dominion territory and territory of the Co-Ops. Northampton is evidently served by a Co-Op. Several years ago I spoke with a variety of Co-Ops about bringing solar into their communities. At that time the Co-Ops that were alligned with ODEC were not interested, and from ODEC I learned that they purchased energy from Dominion and also had pprovided a portion of the investment funds that built Lake Anna. I do not remember the specifics but ODEC buys energy on behalf of it’s affiliated Co-Ops. Evidently with the drop in the price of utility scale solar the landscape at ODEC has changed.
    Co-Ops not affilited with ODEC in the western part of the state are building solar supply for themselves. Again, it is a question now of not having to purchase energy at peak time when it is the most expensive.

    • I thought about that but thought the Buckingham project WAS in Dominion territory …right?

      and it was approved by DEQ not the SCC

      so what explains this?

      Obviously there are more aspect to 3rd party solar and their ability to build utility scale solar – than we apparently knew – based on the reports we were seeing including here in BR.

      so how is this happening ? Is this is and they’re done or are we going to see more? It could be the former if solar credits run out this year… but I still do not understand how the SCC is involved in some and not others and then DEQ the opposite…

    • Most of the distribution co-ops in Virginia joined together decades ago to form ODEC as their power procurement affiliate. ODEC owns 11% of North Anna and about 50% of the Clover Power station both jointly with DVP. It is building a large gas-fired plant in Maryland, (two ODEC members are Maryland co-ops). So, it is understandable that they are less interested in acquiring solar, being indirect owners of generation themselves.

      You are correct that Northampton County is served by a co-op, A&N (Accomack and Northampton) Cooperative.

      Sorry, this post is in response to CleanAir&Water just above yours, Larry.

      • @rowinguy – what about the Buckingham project?

        • The Buckingham solar project may well be in DVP’s service territory, but so long as the utility is not building the project, and it’s under 100 MW, then the developer can go to DEQ for its permit.

          There may be a cooperative serving some portion of Buckingham also

          • The developer is listed as Firestone Solar, LLC, which is not a regulated utility, but an independent developer. So, it can proceed under the PBR.

  8. thanks Rowinguy – I believe it’s 20mw on 200 acres.

    http://www.farmvilleherald.com/2015/08/firm-seeking-to-build-35-million-solar-facility-in-buckingham/

    and it says this; ” The firm is seeking a special use permit from the county to construct the facility, which would include ancillary support facilities and electrical interconnections ”

    not clear who is buying the power but to me the bigger question is

    why this kind of project can’t be replicated over and over across Virginia… what is the limiting factor?

    Is this project in it’s current configuration a money-making enterprise for the company or is this a one-off to get credits that
    are due to expire?

    Did DVP agree to this or oppose it? Are they buying the power or a Virginia electric cooperative or PJM?

    there is a dearth of info on these aspects…

  9. oops – I missed this: ” The project would be designed and constructed in a manner to meet the power quality requirements of Dominion Virginia Power at the point of interconnection.”

    that’s DIFFERENT!!!!

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