Developers and investors are seeing increasing clean energy opportunities in Georgia. Below we discuss recent Georgia solar legislation, growth in biomass, and the major potential for wind power in the state, as well as related ancillary benefits in reduced energy-related water demands.
New Solar Legislation Approved
Solar markets in Georgia appear poised for major growth following recent legislative activity. On March 27, the Georgia legislature passed the Solar Power Free-Market Financing Act of 2015. The new law opens up third-party ownership of leased rooftop solar projects up to a maximum of 10 kW generation capacity. In addition, the bill permits third-party ownership of commercial solar energy installations, up to a limit of 125 percent of the customer’s actual or expected annual peak energy demand. Georgia Governor Nathan Deal is expected to sign the bill soon.
Despite lacking strong policy incentives such as a Renewable Portfolio Standard (RPS), Georgia ranked 7th among the U.S. states in 2013 in new solar installations, attracting $326.2 million in private investment in the solar energy sector, a 1,025 percent increase over 2012, the largest gain of any state in that year. In lieu of mandatory standards such as an RPS, Georgia has relied largely on voluntary clean energy programs, which are expected to bring nearly 900 MW in renewables online by the end of 2016.
The state’s largest utility, Southern Company subsidiary Georgia Power Co., has been recruiting private sector participants through its Advanced Solar Initiative. Additionally, the utility is working with the U.S. Army Energy Initiatives Task Force to build, own, and operate 90 MW of solar power across three Army bases, which will, when operational, cover an estimated 18% of the energy used by the Army in Georgia. Another potential opportunity is presented by power sales in out-of-state markets, with a study by Arizona State University finding Georgia to be one of the top three states that could benefit from cross-border sales.
All of this activity is translating into substantial job creation. According to one study, solar jobs in Georgia are expected to increase by nearly 40% from 2014 through the end of 2015.
Setting the Pace for Biomass Energy
According to data compiled by The Pew Charitable Trusts, 100.5 MW of biomass capacity was installed in Georgia in 2013, the most out of any renewable energy sector in the state. With its substantial forest resources, Georgia is set to become a beacon for biomass, aided by investments by Constellation, a subsidiary of Exelon Corp. For example, Constellation is set to build a $200 million cogeneration plant in Albany, Georgia, to provide electricity to Southern Company’s Georgia Power and steam to Proctor & Gamble (P&G). This commitment represents a major investment by P&G which plans to use the steam to dry its paper products, substantially reducing the carbon footprint of the energy intensive pulping process.
Major Potential for Wind
Georgia does not presently host large scale wind farms, but may soon be in for a wind makeover based on recent models demonstrating the potential for wind resources. The National Renewable Energy Laboratory’s (NREL) new wind resource potential maps, which bases its projections on the use of more advanced turbine designs on newly available land, show a gross capacity factor of at least 35%, indicating over 8 gigawatts of land-based wind potential in the state. NREL’s Jobs and Economic Development Index (JEDI) indicates that developing just one gigawatt of this wind power in Georgia would result in around 4,400 direct, indirect and induced jobs during construction and 130 ongoing operation jobs with a total annual payroll of $7 million.
The shoreline potential for wind power in Georgia is also bright. A recent report by the Southern Alliance for Clean Energy focuses on the role that Georgia’s nearshore and offshore development areas could play in replacing expensive peak generation providers to avoid summertime blackouts. Georgia Coastal and Marine Planning, in conjunction with Georgia Tech, Georgia Department of Natural Resources (DNR), and the National Oceanic and Atmospheric Administration, has created the Georgia Coastal and Marine Planner, which is a GIS data collection that will help determine ideal locations for offshore wind development. Additionally, Georgia Power recently announced that it has applied to deploy a site-specific wind data collection configuration off the coast of Tybee Island, Georgia.
An added benefit of deploying wind and solar energy is the inherent reduction in water use, which is particularly vital in Georgia and other states that are prone to droughts. Georgia, which has also been entangled in “water wars” with neighboring states, stands to benefit greatly from the water-saving aspects of wind and solar. A recent NREL study estimates that an addition of 1000 MW of wind energy in Georgia would result in annual savings of 1.628 billion gallons of water, as well as related reductions in energy use for managing that water.
If you have any questions regarding renewable energy projects in Georgia, please contact our Energy Finance group.
Special thanks to Morgan Gerard and Emma Spath who assisted in the preparation of this post.