• Misae Solar Park II is a second phase of a successfully developed 324 MW/dc Phase I that was sold in 2018 to Copenhagen Infrastructure Partners (“CIP”) a large infrastructure fund with an established track record in the US renewables market

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• Located in Childress, Texas, Misae Solar Park II is a 517 MWac/692 MWdc solar project and one of the largest solar investment opportunities in ERCOT and in the US

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• Developed on 3,800 acres of flat agriculture land next to Phase I and to Tesla substation with easy access through Hwy 287

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• Will interconnect to Tesla Substation’s 345 KV line

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• Will supply 129,000 homes with green energy and will avoid the emission of 826,000 tons of CO2 into the atmosphere

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• Ready to build with an executed interconnection agreement

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• Full interconnection study (facility, short circuit, steady state and dynamic studies) has been posted as final by AEP

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• Expected to declare Notice to Proceed in September 2021 and reach COD in October 2023

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Opportunity Overview

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Misae Solar Park II provides a unique opportunity to invest a large equity ticket size at an asset level ranging between $200MM levered and $450MM unlevered at attractive high single digit returns or low double digits in solar in a region dominated by wind projects that have historically been subject to basis and congestion risk.

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However, unlike wind, solar generation is better aligned with the demand load profile, resulting in lower basis and congestion risk. Based on an independent analysis performed by nFront, the basis risk and congestion associated with this project are minimal.

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In addition to the favorable alignment of a solar asset’s generation profile with the demand load, several other market factors – including additional demand from a utility migrating from the Southwest Power Pool, cancellation of 550MW of wind capacity in the queue, and ERCOT transmission capacity improvements – further enhance investment economics for solar generation projects in the region.

 

The Electric Reliability Council of Texas (“ERCOT”) recently released a series of upgrades planned for the Texas interconnection that are expected to greatly improve project economics. The upgrades address future ERCOT congestion concern while creating more stability in the Panhandle region. Combined, the pending changes in ERCOT transform the region to one with significant upside for solar projects.