Allianz, Nephila Climate provide proxy generation PPA for Texas solar farm


Lightsource bp, a developer and manager of solar energy projects, has secured a proxy generation power purchase agreement (pgPPA) with the capital solutions unit of Allianz Global Corporate & Specialty (AGCS), in partnership with Nephila Climate. 

The pgPPA is for electricity generated by Lightsource bp’s 153 megawatt Briar Creek solar farm in Navarro County, Texas, which is expected to start commercial operation at the end of 2021.

A pgPPA is a renewable energy contract structure to manage weather related risk, similar to a virtual PPA but settling energy on a proxy generation index rather than the metered generation. Proxy generation is an hourly index that specifies the volume of energy that a project would have produced if it had been operated as specified by the developer or owner. 

The solar project is expected to generate $19.7 million in property tax revenue to Navarro County over its life. It will create about 250 jobs during construction and brings $152 million of private capital investment in new, local energy infrastructure for Texas.

REsurety provided analysis in support of the transaction and will serve as the calculation agent for the life of the contract.

Kevin Smith, chief executive officer of Lightsource bp in the Americas, said: “Innovative power contract structures such as virtual and proxy generation PPA’s are valuable tools we can leverage to meet the needs of our corporate partners, manage risk, and continue to finance and build new solar projects for our low carbon future.”

Ariane West, director of structured finance at Nephila Climate, said: “Risk transfer solutions designed to meet the needs of the renewable energy market are essential to support investment and financing of infrastructure on the scale needed to achieve zero carbon targets.”

Lightsource bp, Allianz Global Corporate & Specialty, Nephila Climate, Kevin Smith, Ariane West

Bermuda Re