The capital solutions unit of Allianz Global Corporate & Specialty (AGCS) and Nephila Climate have entered into a new a proxy generation power purchase agreement (pgPPA) for a 153 megawatt solar farm in Texas.
Briar Creek solar farm, which is owned by Lightsource bp, is expected to start commercial operation at the end of 2021, and will generate enough electricity to power 27,270 homes.
A pgPPA is an renewable energy contract structure intended to manage weather related risk.
It is similar to a virtual PPA, except it settles energy on a proxy generation index rather than the metered generation, which specifies the volume of energy that a project would have produced if it had been operated as specified by the developer or owner.
REsurety, Inc. provided analysis in support of the transaction and will serve as the calculation agent for the life of the contract.
“AGCS is excited to collaborate with Lightsource bp on this novel renewable energy hedge structure and risk management tool,” said Vijay Suchdev, Managing Director at AGCS. “We are committed to working with our partners to achieve their sustainability goals and to supporting the long-term global growth of renewable energy.”
“Nephila Climate is pleased to be playing a part in the realization of the Briar Creek solar farm, and Lightsource bp’s mission to deliver affordable and sustainable solar power in the US and around the world,” added Ariane West, Director of Structured Finance, Nephila Climate.
“Risk transfer solutions designed to meet the needs of the renewable energy market are essential to support investment and financing of infrastructure on the scale needed to achieve zero carbon targets. We are proud to be working with market leading partners to create those solutions.”
Kevin Smith, CEO of Lightsource bp in the Americas, also commented: “This deal is a great example of the evolution of renewable energy products here in the US.”
“Innovative power contract structures such as virtual and proxy generation PPA’s are valuable tools we can leverage to meet the needs of our corporate partners, manage risk, and continue to finance and build new solar projects for our low carbon future.”
