Pine Gate exec Details Mississippi projects & ERCOT Pipeline growth

With three projects in Mississippi under development and up to 600 MW of projects on the way in ERCOT, Pine Gate Renewables SVP and Head of M&A Andrew Vietze says this region will continue to be the priority for the firm throughout 2023.

The firm is moving forward with its third project in Mississippi, 79 MW Sunflower Solar, following a town hall with local residents and stakeholders late last month. During the hearing, representatives from Pine Gate including project permitting manager David McGlothlin detailed information on the USD 115m project.

The project has undergone significant changes even from the preliminary version approved by state regulators as recently as July 2022. That USD 115m price tag represents a USD 33m cost increase over the original proposal, even as the scope of the project has been scaled back significantly from 112 MW to 79 MW. Pine Gate’s VP of Market Development Piper Miller has attributed this significant increase to rising costs for materials and shipping, increased labor costs fueled by inflation and a shortage of qualified labor, and overall supply constraints.

In an interview with NPM, Vietze characterized the project as in the “later stages of development,” but the truth is it still has a long way to go before construction is ready to begin in late 2024. The project still has no interconnection agreement in place, no PPA and no financing. Vietze says Pine Gate expects to kick off financing for the project “later this year or next year to line up our closing with NTP.”

He adds that although Pine Gate will likely look to secure an offtaker for the project “at some point,” he says they are keeping their options open in the event an area utility is interested in acquiring the project through a build-transfer agreement (BTA).

Sunflower Solar is one of a growing number of projects under development in Mississippi, a state that has seen fewer than 10 utility-scale solar projects reach COD over the last five years. Already this year, a number of firms including Silicon Ranch and NextEra have advanced projects in the state, with the latter awarded two contracts with Entergy Mississippi at the conclusion of the first of its two 500 MW solar RFPs.

Sunflower Solar itself is the third project in the state from Pine Gate, which has two other 79 MW projects, Moonshot Solar in Hancock County and Cane Creek Solar in Clarke County set to reach COD over the next 12 months.

Vietze says Pine Gate “really likes the Southeast in general,” and is “optimistic about states like Mississippi” as the firm progresses both greenfield development and pursues acquisitions in the region.

That focus has also expanded west to Texas, a state Vietze characterizes as a “natural extension” for the firm to expand. Pine Gate is ramping up a 600 MW portfolio of projects in the state with 300 MW consisting of the 174 MW Porter Solar project and 120 MW Montague Solar project currently under construction with closed financings.

Pine Gate has indicated both projects also have PPAs in place, though they are not disclosing them at this time. Vietze says Pine Gate is “trying to be strategic” in how it approaches “projects, offtake structures, and partnerships” in the state, which he says has “plenty of opportunities relative to other markets given the dynamics of its interconnection process,” which is relatively cleaner than ISOs like PJM and MISO grappling with lengthier queue times.

Beyond Porter and Montague, Vietze says the firm has eyes on another 300 MW of unannounced projects set to begin construction by the end of the year. Like the other projects, these projects will be strictly solar and solar + storage; Vietze says the firm has no interest in getting into the saturated Texas wind market.

Beyond development activity in the state, Vietze says he is also eyeing acquisitions in ERCOT. Vietze predicted last year the state would be a hot M&A market in the wake of the Department of Commerce’s solar tariff investigation and says Pine Gate is “still seeing a good amount of M&A activity, particularly from large portfolio coming to market rather than one-off assets.”

“We’re excited about the next few years in ERCOT as the IRA really bolstered the timelines projects can work on,” Vietze said. “Pine Gate is well-positioned to take advantage of opportunities.”

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


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