Competitive Power Ventures, Inc. (CPV), GE Energy Financial Services and Diamond Generating Corporation (DGC), co-owners of the planned $900 million CPV Sentinel power plant, announced today that they have closed the largest project financing in the U.S. thermal power industry this year, for the facility to be built in Riverside County, Calif.
The CPV Sentinel project is located near Desert Hot Springs, five miles northwest of Palm Springs. It is expected to create 300 construction jobs at peak with a $40 million payroll, along with nearly 400 indirect jobs with a $15 million payroll. The project will provide an estimated $30 million in sales tax during construction and an estimated $6.4 million in annual property taxes once operational.
CPV, GE Energy Financial Services and DGC announced that 23 banks—working with lead arrangers MUFG, Royal Bank of Scotland, ING, Natixis and Sumitomo Mitsui Banking Corp.—agreed to provide credit facilities of nearly $800 million for construction and other capital needs. With almost $2 billion of commitments received from lenders, interest in the project was so high that the syndicated loan was 2.4 times oversubscribed. Additional details of the financing were not disclosed.
With all permits finalized and the debt financing in place, Gemma Power Systems California, Inc. is scheduled to start construction of the 800-megawatt (MW) project immediately, with CPV Sentinel scheduled to go into commercial operation in the summer of 2013.
“This is a landmark announcement for CPV, and we are proud to partner with such an excellent team of industry leaders,” said John Foster, executive vice president of Competitive Power Ventures. “The project’s cutting-edge technology will help to modernize California’s energy portfolio while meeting both current and future demands in the most environmentally sensitive manner possible.”
Complementing GE Energy Financial Services’ backing of the plant, GE Energy signed an agreement to supply eight gas-fired LMS100 turbine-generators capable of reaching full load in 10 minutes. CPV Sentinel will help prevent blackouts during extremely hot weather by providing peak power on demand. Given CPV Sentinel’s close proximity to 600 MW of wind farms, the project also will support California in meeting its goal of generating 33 percent of its power from renewable sources by 2020 by facilitating the integration of wind and solar power into the electric grid. California is requiring the largest addition of renewable generation of any U.S. state. When the wind doesn’t blow or the sun doesn’t shine, CPV Sentinel can backstop the lost generation.
The highly efficient ecomagination-certified aeroderivative LMS100 gas turbine-generators helped CPV Sentinel meet environmental challenges and assisted in reducing carbon dioxide emissions. At the CPV Sentinel plant, the turbines are designed to operate at 43 percent simple-cycle efficiency, nearly 10 percent better than the next most efficient simple-cycle plant in California today.
“With the help of GE’s technology and financial backing, the CPV Sentinel plant’s supply of consistent and reliable power on demand will facilitate the growth of intermittent energy sources like wind and solar that are plentiful in this area of southern California,” saidDarryl Wilson, vice president—aeroderivative gas turbines for GE Power & Water.
The CPV Sentinel project will supply power to the Coachella Valley and Los Angeles Basin under a long-term agreement with Southern California Edison, an Edison International (NYSE: EIX) company, which needs additional capacity for grid reliability and renewable integration. CPV will manage the project while DGC will serve as the plant operator.
“DGC is pleased that we will be a part of this important project in Southern California, helping to provide reliable electricity for the community in which we live and work and bringing much-needed economic development to the region,” said DGC President Yasuyuki Asakura.
CPV, the managing member and developer, owns 25 percent of the project, while DGC owns 50 percent and GE Energy Financial Services owns 25 percent.