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Amazon will source energy from Maryland’s largest solar farm planned at a former coal mine, the company announced Monday, highlighting appetite for developing former industrial lands for clean energy projects.
The tech giant, the world’s largest corporate buyer of renewable energy, signed a power purchase agreement for the output of the CPV Backbone Solar project, a 170-megawatt of direct current project in Garrett County, Md. The project is expected to be fully operational by the second quarter of 2025, according to the Silver Spring, Md.-based developer, Competitive Power Ventures (CPV).
Reclaimed former coal mine lands and brownfield sites are increasingly attractive for developers as they hunt for places that are optimal to connect to the power grid. Federal incentives to develop clean energy on such sites could spur more development.
Competitive Power Ventures sought out the Garrett County site, the company’s third site on former coal lands, said Sean Finnerty, executive vice president of renewable energy for CPV.
While there are challenges building on reclaimed land and sculpting the site for a solar project, an existing transmission line had available capacity for the farm, Finnerty said. Plus, the site’s history of development also made the interconnection and permitting process relatively quick, he said.
“Because a lot of that due diligence work was already done there because of legacy assets, those projects are much more likely” to be completed, Finnerty said. “It presented us with an opportunity on land that really couldn’t be developed for anything.”
Developers have access to federal funds to build certain projects on abandoned mine lands under the 2021 infrastructure law. They can also receive a 10% tax credit under the Inflation Reduction Act to build in energy communities, defined as brownfields, sites near closed coal plants or mines, or sites in areas with a higher proportion of fossil fuel workers.
It can take many years to build new transmission lines and for power plant projects to be studied by grid operators, which have been overwhelmed by a dramatic increase of grid-connection requests from proposed renewable energy projects.
Some 2,700 power projects are currently being studied by PJM Interconnection, the country’s largest grid operator that coordinates the flow of power through 13 Eastern states and the District of Columbia. The vast majority of those proposed projects never get built, according to Energy Department studies.
Partnering with Amazon made sense because the CPV project was viable in the short-term, Finnerty said.
“We’re seeing a flight to quality, if you will,” Finnerty said. “Those companies are contracting with a smaller group of project developers and project owners who give them a higher level of assurance that projects will get done and get done on time.”
CPV Backbone marks one of Amazon’s first two utility-scale solar farms in Maryland. The company also announced an agreement with a 400-acre solar farm in Kent County, Md., that will use sheep to graze around the panels and help control vegetation, demonstrating the growing interest in projects that allow agriculture and solar energy to coexist on the same site.
Amazon, on track to power its operations with renewable energy by 2025, said it plans to use two farms to match consumption at some of its substantial operations in Maryland, including 11 fulfillment and sortation centers, 16 delivery stations, and an air hub.
Globally, Amazon’s renewables portfolio grew to 479 projects so far in 2023, up 78 projects from its 401 project total in 2022, the company said Monday.
“Our growth rate in this space has been tremendous, and I don’t see that slowing down,” said Nat Sahlstrom, head of energy, water and sustainability for Amazon Web Services.
CPV Backbone will include more than 300,000 solar panels on the site of a former Arch Coal mine. The more than $200 million project is expected to employ more than 200 construction workers. Once operational, the project will help the region avoid more than 133,000 tons of carbon dioxide, the equivalent of taking more than 26,000 cars off the road each year, CPV said.
Amazon and other big corporate buyers help solve some of the grid constraints by providing steadily growing demand, well-defined climate goals, and a proof of executing agreements with large-scale projects, Sahlstrom said. Big consumers of energy have increasingly beefed up lobbying operations in Washington and at regional transmission organizations (RTOs) to press for a quicker power grid buildout.
“Regulators and RTOs understand that we’re serious,” said Sahlstrom, who joined Amazon 12 years ago to set up its renewable energy procurement business. “We’re not out here just speculating about renewable energy investments. We want to go bring predictable loads onto grids, and we want to make them green.”
Brownfield sites with access to transmission are “not just wildcatter ideas,” he said. “They’re well understood. It’s really about bringing an off-taker, like Amazon, financing a developer who’s got the technical expertise to go develop one of these things and make these things happen fast.”
More than 450,000 US brownfields represent an “emerging opportunity for solar projects, as they are often located near power lines and public roads, making it easier to connect to the grid, and present an opportunity to turn unused property into an economic opportunity,” Amazon said in a press release.
While the Maryland project, conceived in 2020, predated those incentives, the company is excited about further development, Finnerty said.
“We do think that bringing investment to brownfield sites like this is a good thing the IRA certainly helped,” Finnerty said.
The project provides “an array of economic and environmental benefits to the region and we are excited to learn that Amazon is supporting this project,” said Jennifer Walsh, executive director of The Greater Cumberland Committee, an economic development organization, in a statement. “TGCC looks forward to working with CPV over the coming year as the construction ramps up.”
To contact the reporter on this story: Daniel Moore in Washington at dmoore1@bloombergindustry.com
To contact the editors responsible for this story: Maya Earls at mearls@bloomberglaw.com; Zachary Sherwood at zsherwood@bloombergindustry.com
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