Nexamp lays out its blueprint for utility-scale expansion

Nexamp is breaking into the utility-scale space with plans to establish projects in five of the largest Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) in the U.S.

Marc-Alain Behar, vice president of utility-scale development for Nexamp, told NPM that the plans to expand the Boston-based development company began in 2020, but started in earnest in 2021 as resources became dedicated to the expansion.

Historically, Nexamp has been successful in the community solar world. Behar said Nexamp has an integrated approach, meaning the company built up abilities from land-owner and site acquisition, outreach, to development, construction, financing, and operations of those facilities. Since establishing in 2007, Nexamp has built itself into a leading position in the Northeast, with a strong presence in New York and New England community solar markets. In the last three to four years, it has begun to geographically diversify by building a presence in the Midwest and some development activity on the West Coast, including Hawaii, and in the Southeast.

Stepping into utility-scale has meant utilizing those same capabilities that have made it successful in community solar market by applying them to larger projects. Additionally, Behar said that the utility-scale market is sensitive to different variables. Though utility-scale is subject to certain federal policies, such as tariffs that apply across the board, community solar is more heavily influenced by state level policies.

"Utility-scale might be more insulated from those state level policies," he said.

Though utility-scale has this advantage, Behar said challenges have been observed as well. Though the ongoing U.S. Department of Commerce (DOC) Auxin investigation is impacting the industry overall, Nexamp’s biggest challenge has come from interconnection queue delays from various ISOs.

“For companies that have been in the market for some time now, they’re also feeling those delays and it’s not great for anyone,” he said. “But if you’ve been active in the market for several years now, it means you have projects getting out of those interconnection queues because you maybe put some in four or five years ago and they’re finally coming out after those delays.”

For Nexamp, he said the company began this effort recently and will have to go through those long interconnection queues before it can have projects ready to be built.

“It requires a patient approach and Nexamp is very serious about entering the utility-scale market,” he said. “This is a long-term effort. We would love if things could go a little faster, but we are not deterred by the delays or the long timelines.”

As for its expansion, Behar said Nexamp’s primary focus is on regulated wholesale markets. It has selected five main ISOs, including PJM and MISO, as well as more state-specific ones such as NYISO, ERCOT, and CAISO.

"These are our target markets that we've selected for our project pipeline right now," he said.

Year 1 of the utility-scale effort was in 2021 where Nexamp entered MISO, PJM, and NYISO. Its goal is to enter with its first projects into ERCOT in 2022, and then CAISO in 2023. Behar said Nexamp will keep its focus on these five markets and deepen its portfolio after 2023, though would also keep an eye out for projects or partners on projects outside of those five markets.

In MISO, PJM, and NYISO, Nexamp so far has large-scale hybrid projects of photovoltaic + storage, ranging between 100 MW and 300 MW.

“And they are in areas where we see favorable transmission capacity, where we also see favorable community engagement for those projects, and finally all are in markets where there is still a lot of demand from corporate off-takers that have sustainability goals they’re trying to achieve,” Behar said. “We feel those projects, once they mature, will be well-placed to offer solutions to those customers.”

When asked about the timeline for these projects, Behar said that considering the interconnection queues, the projects may be online around 2025. He added that Nexamp is trying to find opportunities to bring projects online earlier than that, such as the acquisition of new projects.

From the acquisition perspective, Barbara Vasconcelos, Nexamp’s director of M&A for utility scale, said that the company’s strategy is to find projects further along in development to speed up the pipeline. The focus is to find projects that are not easy to replicate.

“Maybe the timeline can be earlier depending on transactions that close,” she said.

Vasconcelos said that the company aims to achieve its goals of closing 2022 with 2.5 GW in its pipeline, including the M&A effort that began in 2022 as well.

Additionally, Vasconcelos said that Nexamp is going into this utility-scale expansion well-capitalized and in good financial health. She pointed to the company’s recently raised USD 240m of equity from Generate Capital, a San Francisco-based infrastructure fund, and raised USD 440m in debt with one of its financial partners.

“Driving this expansion, we are hoping to partner with early-stage developers and either acquire some of their projects or jointly develop them,” Behar said. “We are flexible in our approach and would like to try to build some of those relationships to accelerate our entry.”.

*This story was originally published exclusively for NPM subscribers last month.


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