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12 23Thu04242014

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GPA signs solar, wind energy contracts

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THE Guam Power Authority is one step closer to achieving its renewable energy portfolio standards after signing a contract for hybrid solar and wind facilities with Pacific Green Resources (PGR)  yesterday.

Public Law 29-62, passed in April 2008, requires GPA to establish and meet Renewable Portfolio Standards, with the first standard requiring 5 percent of net sales to be generated from renewable resources by December 2015.

GPA initiated its renewable acquisition process based on the GPA 2008 Integrated Resource Plan to lower production costs and as a fuel diversification strategy.

In an earlier Consolidated Commission on Utilities meeting, GPA General Manager Joaquin Flores reported that the energy will be provided through a power purchase agreement. The cost of the solar and wind facilities, through the agreed contract term, is around $153 million, with around $95 million allocated for wind energy and $58 million for solar energy.

Under a power purchase agreement, a contract is drafted between a first party who generates electricity for the purpose of sale, and a second party who is looking to purchase power.

Last June, GPA signed a contract with Quantum Utility Generation to officially launch the first phase of their renewable energy project – a photovoltaic or solar facility that will produce 20 megawatts of power, enough to provide the energy requirements of 1,700 homes.

Enrique Cruz, PGR president, said the facility will provide 5.65 megawatts of solar power and 9.35 megawatts of wind power, for a total of 15 megawatts.

"We have a three-year contract to complete from beginning to end for both energy farms. We anticipate finishing the solar part probably a year and half from today. The wind part, probably three years at the most. We want it to be commercially operational three years from today," he said.

Cruz said they still need to get a conditional use permit from the Guam Land Use Commission.

Under the power purchase agreement, PGR is fully responsible for finding and purchasing the property for the facility. The company had to find a private lender to fund the project and take care of the construction, maintenance, operation and engineering of the facilities.

Flores said there is a minimum production of energy they have to produce for the grid every year. The contract requires GPA to purchase the energy, which is about 38,000 megawatts per year – enough to power 2,200 homes.

"The amount of energy that we purchase from them for the first year, for example, is a little over $200 per megawatt hour. So it's nearly $8.5 to $9 million per year. But at the same time it is also saving oil that we would have purchased if this had not been completed," he said.

“About 110 jobs will be involved with construction and 27 new jobs will support daily operations. Over 900,000 barrels of oil is replaced with renewable energy through the contract term at an estimated savings of $5.5 million annually. This circulates in our local economy instead of going off-island to pay for imported oil,” Flores said.

“This project is not only a partnership for renewable energy, but also an economic stimulus for our island as part of an ‘oil to jobs’ initiative,” he added.

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