Canadian Solar Inc will supply solar energy to oil and gas pipeline company Energy Transfer from a solar project in the Permian in a first-ever dedicated solar contract that Dallas-based Energy Transfer has signed.
Canadian Solar's wholly owned subsidiary Recurrent Energy has signed a power purchase agreement (PPA) to supply Energy Transfer with solar energy from the Maplewood 2 project in Pecos County in West Texas for a duration of 15 years, the Canadian solar company said in a statement.
"Insiders of the renewable energy industry know well that solar PPAs often help corporations lock in low-cost electricity prices to power their operations. However, it is rewarding in 2019 to also see valued partners from the traditional energy sector like Energy Transfer view a purchase of electricity from high quality Canadian Solar assets like the Maplewood 2 project as a financially sensible decision," Dr. Shawn Qu, chairman at Canadian Solar, said.
According to David Coker, vice president of Power Optimization at Energy Transfer, the PPA makes economic sense for the oil and gas pipeline company.
"We are always focused on operating our facilities safely and efficiently, and while we mainly rely on electrical energy powered by natural gas, we do use a diversified mix of energy sources when it makes economic sense to do so. In fact, the percentage of electrical energy we purchase that originates from solar and wind sources is now more than 20 percent on any given day with the addition of this contract with Recurrent Energy," Coker said.
This is not the first time an oil and gas company has signed a power purchase agreement to use renewable energy for its oil and gas operations.
U.S. supermajor Exxon signed in November last year a 12-year deal with Danish renewable energy company Orsted to buy 500 MW of electricity produced by solar and wind farms to power its oil production in the Permian. Although the terms of the contract remained undisclosed, it is the largest such contract featuring an oil company as a party, Bloomberg New Energy Finance commented.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More