The move marks the second PPA between the companies in the southwest USA after the Oxbow Solar PPA signed in Aug’21
The corporate power purchase agreement (PPA) covers the supply of ~327 GWh/yr from the 145 MWac / 180 MWdc Prairie Ronde Solar project. The PPA will help Mcdonald's decarbonize the power consumption of ~630 restaurants. The deal marks Lightsource bp’s second PPA with McDonald's, following a 2021 agreement to supply power to Mcdonald's and eBay from the 345 MW Oxbow solar project.
The Prairie Ronde solar project will be fully financed, built, owned, and operated by Lightsource bp, with a total development cost of ~$170mn. Construction of the project is expected to begin in early 2023, with commercial operation planned for late 2024. With the signing of the PPA, Lightsource bp will now work on securing financing for the asset. The company generally relies on a combination of equity and debt capital, as it did with the Oxbow solar project, which was financed through parts of proceeds from a $267mn tax equity facility by Wells Fargo and a $533mn multi-project package led by HSBC. As per Enerdatics’ research, Lightsource bp’s power marketing strategy focuses on signing long-term PPAs with corporate customers, with more than 2.5 GW of contracts signed globally since 2019. Earlier this month, the company signed corporate PPAs with H&M group and XXXX Brewery in the UK and Australia, respectively.
McDonald’s announced in 2018 its target of reducing greenhouse gas (GHG) emissions related to its restaurants and offices by 36% by the end of 2030, compared to the 2015 level, as well as a 31% reduction in emissions intensity. In Dec '22, McDonald’s became the first corporate entity of its type to act as an anchor buyer for its partners by signing a 189 MW virtual aggregation deal with Enel. As an anchor buyer, McDonald’s will purchase the renewable energy certificates (RECs) associated with the produced power, while physical delivery of the electricity will take place to five of its supply chain partners. Going forward, Enerdatics expects more corporations to pursue such PPAs, helping smaller-scale off-takers to decarbonize by shouldering the bulk of the legal and contractual aspects of the agreement.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.