Amazon received court approval to acquire what may become one of the largest solar power storage facilities in the United States after the original developer filed for bankruptcy, the latest example of a major tech company diving deeper into the electric power sector.
U.S. Bankruptcy Court for the Southern District of Texas last week approved Amazon's $83 million all-cash bid for the Sunstone solar power project near Pendleton, Oregon. The developer, Pine Gate Renewables, filed for Chapter 11 bankruptcy protection in November.
Giant tech companies and data center developers are increasingly taking a direct role in power generation as electric utilities struggle to keep pace with soaring demand. Google's parent company last year agreed to pay $4.75 billion for Intersect Power, a developer of renewable energy sources for data centers. Property developers are also looking to construct power plants on the same site as data centers, and the use of battery storage systems, such as Pine Gate's Sunstone project, is becoming a more popular option.
Amazon's purchase of the Oregon solar project comes after the tech giant and e-commerce behemoth filed a complaint with Oregon state regulators against PacificCorp last year, claiming the utility was not providing it with adequate electric power for its data centers.
Amazon Web Services, the cloud computing subsidiary of Amazon, operates about 40 data centers in Oregon, according to Baxtel, an information provider for data centers. Its Oregon data center portfolio includes properties in Boardman, Hermiston and Umatilla, and it's developing a new campus in Arlington. All are located in the Columbia River valley near the site of the Sunstone solar storage project.
The Sunstone project in Lexington, about 50 miles west of Pendleton, would store about 7,200 megawatts of solar-generated electric power in either lithium or zinc batteries, according to the Oregon Department of Energy. The 9,442-acre complex would include substations and transmission lines to connect to the West Coast electric grid, as well as additional buildings. The site is next to Boardman Bombing Range, a U.S. Navy training facility.
The project has received all required state and federal approvals, and construction is expected to begin later this year. Amazon contracted with Bozeman, Montana-based Gallatin Power Partners to provide development services for Sunstone.
Pine Gate, based in Asheville, North Carolina, filed for bankruptcy on Nov. 6, citing unfavorable changes to the regulatory environment for renewable energy projects and difficulties obtaining project financing. The Trump administration has ended federal subsidies for renewable energy projects and has attempted to block the development of proposed solar and wind projects.
Also in Pine Gate's bankruptcy case, the Israeli company Nofar separately obtained court approval to acquire $285 million worth of Pine Gate's assets in North Carolina, South Carolina, Alabama and Texas.
For the record
Latham & Watkins and Hunton Andrews Kurth are legal counsel to Pine Gate. Alvarez & Marsal is the restructuring adviser, and Lazard is the investment banker for Pine Gate. Davis Wright Tremaine and Dentons are counsel to Amazon.