By Chris Matthews
A BP joint venture is considering three utility-scale solar energy projects northwest of Victoria, Texas.
The proposed projects would be developed on pieces of land in eastern DeWitt County, northwest of Victoria and east of Cuero, Texas, according to documents filed with the Texas comptroller’s office. The projects — Shaula Energy Project LLC, Shaula Energy Project II and Shaula Energy Project III — are wholly owned by BP Solar Holdings and being developed by Lightsource BP under a development services agreement. Energy giant BP PLC (NYSE: BP) owns 50% of U.K.-based Lightsource.
Each of the DeWitt County projects would have a solar production capacity of 200 megawatts and feature more than 530,000 photovoltaic panels, Lightsource confirmed. Tax incentive applications show that Lightsource would invest $180 million in each of the three projects and development of each solar farm would create 300 full-time construction positions.
Lightsource has asked Cuero Independent School District and Yoakum ISD, both with boundaries in eastern DeWitt County, for tax incentives to develop the solar projects under Chapter 313 of the Texas Tax Code. Shaula Energy Project and Shaula Energy Project III would be developed on separate pieces of land falling within the boundaries of Cuero ISD, while Shaula Energy Project II would sit in western Yoakum ISD, the company said.
“Many Texas counties, including DeWitt County, offer attributes needed for a utility-scale solar project,” Lightsource BP said in a statement to the Houston Business Journal. “These attributes include transmission access, strong solar resource, landowners interested in leasing their land for solar in order to diversify their income, land that’s relatively level and a welcoming community.”
Chapter 313 allows school districts to limit the taxable value of certain kinds of industrial projects that fall within their borders. Developers for solar farms, wind farms, renewable fuels plants and even semiconductor manufacturing plantshave sought tax abatements with Texas school districts through Chapter 313 applications. All Chapter 313 agreements must be approved by the Texas comptroller, who must decide that the incentives are a determining factor for the project.
Lightsource would spend $180 million developing Shaula Energy Project, but the company’s application under Chapter 313 asks Cuero ISD to limit that project’s taxable value to $20 million for the first 10 years in operation. Lightsource is also seeking to limit the taxable values of Shaula Energy Project II and Shaula Energy Project III to $30 million and $20 million, respectively, over 10 years.
“Several things need to come together to move a project forward into construction, including a power purchase agreement, equipment supply, [engineering, procurement and construction] contract and property tax agreements,” Lightsource said. “The incentives are passed to the power buyer to make the power pricing more competitive. Our goal is to bring these various activities together in early 2023 in order to start construction.”
If the incentives are approved and Lightsource moves forward with development, Shaula Energy Project would commence commercial operations in summer 2024, the company said. Shaula II and III would become operational in December 2024 and June 2025, respectively, according to the applications.
School districts generally don’t face individual financial risk for accepting Chapter 313 deals, whether or not the project would have been built otherwise, because of the way the Texas school funding formula works. That risk is spread out to broader state education funding instead. After the Texas Legislature did not advance a bill that would have extended the incentives by two years, the Chapter 313 program is slated to expire at the end of 2022.
New projects developed in DeWitt County would complement Lightsource’s existing footprint in the Lone Star State. The company has three operating utility-scale solar projects near Dallas: the 260-megawatt Impact Solar farm, the 163-megawatt Elm Branch project and the 153-megawatt Briar Creek solar farm. Lightsource also has an office in Austin. “Texas will continue to be key market for Lightsource BP to add valuable, clean and cost-efficient energy to help diversify the Texas grid,” Lightsource said.
The company also has several other utility-scale projects in development around the U.S. In January, Lightsource closed $100 million in financing for the 130-megawatt Black Bear Solar farm in Montgomery County, Alabama. Lightsource BP has developed 5.4 gigawatts of solar energy generation capacity, the firm said.
BP’s U.S. headquarters is in Houston, home to the company’s largest employee base in the world. BP ranked No. 10 on the HBJ’s 2021 Largest Houston-Area Energy Employers List, based on the company’s 4,500 local, full-time employees.