SHREVEPORT, LA / ACCESSWIRE / November 3, 2023 / Correlate Energy Corp (OTCQB:CIPI) held a live investor summit webinar recently following the news that the distributed energy company had landed a major microgrid deal with one of California's largest privately owned oil and gas corporations. Correlate's largest deal to date, the microgrid project would see the development of 40 megawatts of solar power and storage capacity across twenty sites in the Los Angeles metro area.
The Role Of Microgrids In America's Clean Energy Transition
Microgrids are independent, local power grids that power anything from a single building to an entire community. Sustainable ones, like those Correlate is building as part of the new project in California, can offer cheaper, cleaner and more reliable energy for the users connected to it.
Typically connected to the main grid, these local grids can flexibly switch between supporting the larger grid with sustainable, supplemental energy and providing electricity directly to the customers connected to it.
So, during ordinary use, microgrid owners can benefit from lower energy costs and even generate revenue by selling surplus electricity back to the grid. Then, in emergencies when the main grid goes down, owners have the agility to switch to using their own microgrid to avoid any interruption in power. In California especially, where electricity customers experience 5.4 hours of outages per year on average, that kind of flexibility and resiliency is becoming more and more important.
When set up to generate renewable energy, these microgrids are also more affordable. Electricity generated from fossil fuel is volatile today and can cost anywhere from $0.05 to $0.17 per kilowatt-hour (kWh) but will continue to get more expensive faster as regulations around it become increasingly strict, and the impact of inflation continues to drive the price higher.
Solar power, on the other hand, is a fixed rate and typically is at least ten percent cheaper today is projected to trend lower as the technology to build solar panels and storage infrastructure becomes more and more efficient. Moreover, microgrid owners are generating their own power, which gives them more control over the cost of the energy they generate.
As reimbursement programs, carbon credits and other policies aimed at incentivizing renewable energy use gain traction, microgrids often end up becoming a source of revenue that quickly outpaces the operational costs.
These benefits all hold true across the United States, where aging grid infrastructure and intensifying climate change-related natural disasters are causing electricity customers to experience as much as 80 hours of outages per year in some states - all while the cost of that electricity continues to get higher.
In fact, the Department of Energy estimates that by 2030, between 30% and 50% of power generated in the United States will come from distributed microgrids based on the current rate of new installations. This would substantially lower the burden on the nation's aging infrastructure, reduce the number of outage hours and help the country meet its decarbonization and emission reduction goals.
The Oil And Gas Microgrid Deal Marks The Achievement Of A Key 2023 Milestone For Correlate
The microgrid deal recently announced by Correlate Energy puts the country a step closer to reaching the 2030 distributed renewable energy target. It also marks Correlate's official entry into the microgrid market.
The first phase of the project is projected to exceed $23 million and will serve as a blueprint for similar collaborations with other companies in the oil and gas sector. The California Oil and Gas Corporation operates multiple locations with a total load of 100 megawatts and needs to achieve net zero to comply with the state's ambitious climate policy - AB 32 Climate Change Scoping Plan - under which 100% of California's electricity must be zero emission by 2045. The 40 megawatts of solar and storage capacity that Correlate will develop as part of the deal puts the oil and gas corporation well on the way toward achieving that target.
"This Microgrid portfolio is a long-awaited milestone that we expect to be the first of many for our company," said Correlate Energy CEO Todd Michaels in a statement on the news, adding, "This project not only marks our material entry into the oil and gas sector but also doubles our largest contract size to date."
This summer, the distributed energy company announced a joint venture with eDGe Renewable Partners that will finance up to $100 million to develop microgrid projects nationwide.
SOURCE: Correlate Energy Corp.
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