BayWa r.e. origination executive discusses strategy shift due to proposed PJM interconnection pause
The US arm of BayWa r.e. is starting to reposition its origination activities in PJM on the heels of the ISO’s proposed two year pause on interconnection for new projects through the end of 2025.
BayWa r.e. had gained momentum in the region in recent years taking two of its projects operational in the past two years and having multiple 100 MW plus projects in late-stage developments.
“With most other markets, we’re thinking about 2024 and 2025 projects this year, but with PJM, those projects will be 2027 and beyond most likely,” said Chris Lazinski, origination associate at BayWa r.e. Solar Projects in an interview with NPM.
However, Lazinski conceded that “even with the delay in the interconnection timeline, PJM is a hard market to ignore.”
BayWa took the 20 MW Camden Solar project operational in July 2021 with a 15-year PPA in hand from Hershey, and in late 2020, completed its 133.6 MW Fern Solar project in North Carolina with multiple virtual power purchase agreements in tow with Starbucks and others.
While it also has several early-stage opportunities across the region, Lazinski still supports the ISO’s decision.
“The outcomes of the PJM Interconnection reform process do not make anyone fully satisfied, but to me, that’s the hallmark of a broad and robust stakeholder process,” said Lazinski adding that “we believe that they conducted a fair process and valued the input of the renewable energy development community in putting together their proposals.”
Also, this will give BayWa r.e. pause to consider what will become valuable in the region in the later part of this decade in terms of whether to build co-located storage or standalone projects.
In the meantime, BayWa r.e. plans to shift its attention to offtake and development execution on its existing PJM pipeline and “allocated extra development resources to areas with fewer interconnection challenges [to] investigate new markets and technologies.” BayWa made a filing with the Bureau of Land Management in late 2021 that it is planning to build a 600 MW solar PV and energy storage system--Titus Canyon Solar--in Nye County, Nevada.
In terms of different verticals, BayWa r.e. is also looking to boost its storage portfolio as it now amounts to 2.3 GW or roughly a third of its total 6 GW pipeline. It recently sold a project out of that pipeline--200 MW/400 MWh Guajillo storage project—to Eni New Energy US Inc.
Lazinksi said he expects the company’s storage capacity to “increase through 2022.”
BayWa r.e. is also involved in new verticals globally, but it remains to be seen whether it would bring that expertise to the US market.
BayWa r.e. is owned by Germany’s BayWa AG and Energy Infrastructure Partners (EIP). It is based in 28 countries. In the US, the business is divided into solar projects, wind projects, solar distribution and energy solutions and services.
In the UK, it announced a partnership with Octopus Hydrogen to provide electrolyzers and hydrogen storage systems alongside selected wind and solar projects.
“This is part of a larger strategy to ramp up our involvement in hydrogen production in Europe, but it remains to be seen how and whether we will pursue this business in the US,” said Lazinski.
*This story was originally published exclusively for NPM subscribers last month.
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