Despite Starkville’s recent decision to significantly reduce its commitment to purchasing green energy due to rising costs, demand for electricity from Golden Triangle solar projects remains high, according to the Tennessee Valley Authority.
On Dec. 6, the Starkville Utility Department reduced its commitment to the Green Invest program by 80 percent, from 30 megawatts per year to 6.3. SUD Director Edward Kemp said the utility service was presented with data by TVA earlier this year citing a more than 100-percent increase in the costs of solar power from $1.25 per megawatt of generation to $3.23 over the last year.
TVA generates its own electricity and purchases it from producers and then wholesales that electricity to utility companies in areas of Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia, providing power to more than 9 million people, according to the government-owned company’s website.
“I think that the landscape is continually changing, especially in the solar world,” Kemp said. “When we first committed to that project — and we still are going to continue to be a strong partner in that project — the landscape was quite different back then.”
In 2021, Starkville initially agreed to purchase 30 megawatts of solar energy from planned Golden Triangle solar projects, enough to make up 15 percent of the city’s power needs. The cost commitment at the time was $80,000 per year; those credits now cost upwards of $250,000 annually. The city will now pay $40,000 for 6.3 megawatts, an 80 percent reduction from its original commitment.
There are currently 6,000 acres of land in the Golden Triangle committed to the construction of three solar farms that are expected to eventually generate about 600 megawatts of power. Those projects are underway but are facing significant delays.
Golden Triangle Development LINK Chief Executive Officer Joe Max Higgins told The Dispatch that industry-wide delays in construction projects and supply chain issues might contribute to some of the increased cost and construction delays, noting even basic materials like cement have become short in supply in recent months.
Starkville isn’t the only city reducing its commitment to TVA’s Green Invest. In 2020, the Knoxville, Tennessee Utility Board agreed to participate with a commitment to purchase 502 megawatts of solar by 2025, with 270 of those megawatts coming from solar farms in the Golden Triangle. According to a press release provided by KUB manager of executive services and environmental stewardship, Liz Hannah, the utility decided in October to reduce that commitment to 325 megawatts a year by 2025, however none of that reduction will come from the Golden Triangle solar farms.
Demand for green energy credits remains high
When companies or utilities commit to purchase a certain amount of solar-generated electricity, they receive renewable energy credits that represent a share of the energy generated. Those credits can be bought and sold on the open market by businesses and governments in their efforts to reduce their reliance on fossil fuels.
According to TVA Customer Service Manager Josh Wooten, those certificates are highly sought, despite the recent surge in pricing.
“There is a great deal of interest in the renewable credits or certificates,” Wooten said. “There will be another entity that will use (Starkville Utility’s unpurchased credits) in a heartbeat. (TVA) could actually reserve those for our own generation portfolio as we could claim them as our own if we need because we have carbon reduction goals as well.”
Wooten also said the rise in cost should not correlate to an increase in customer rates because of the diversity of the TVA system and the nature of how the utility sells power to its utilities.
“We’ve got a blend of generators that go on to the grid. We’re a wholesale provider of power. And then, of course, our utilities, transfer those rates into the retail rates. So the increase is not projected to increase the end-user customers.”
Golden Triangle solar projects
To promote the Green Invest project, Wooten said TVA entered into an agreement with Miami-based solar energy company Origis Energy.
Origis would construct three 200-megawatt solar facilities in the Golden Triangle, and TVA would purchase all the energy generated by those projects.
Two projects — MS Solar 5 and MS Solar 6 — are in Lowndes County, west of the Golden Triangle Regional Airport, and MS Solar 7, Optimist, is located south of the Yokohama Tire manufacturing plant in Clay County.
The original goal was to complete the Lowndes farms by October 2022, and the Clay facility was supposed to be operational by the end of 2023. Those projects have been delayed by more than a year, though progress is still being made to reach the new goal, Origis Energy Chief Commercial and Procurement Officer Johan Vanhee said Thursday evening via email.
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