The Smud Power Purchase Agreement: An Overview
The Sacramento Municipal Utility District, or SMUD, is a publicly owned utility that serves the Sacramento County and Sierra Nevada Foothills areas. In recent years, SMUD has been actively pursuing renewable energy sources as a way to reduce its carbon footprint and help combat climate change. One of the ways it has been doing this is through power purchase agreements, or PPAs.
A power purchase agreement is a contract between a utility or energy supplier and a producer of renewable energy. Under this agreement, the utility agrees to purchase a certain amount of energy from the producer, usually over a long-term period of 10 to 20 years. The producer, meanwhile, agrees to supply that energy at a fixed price, usually lower than the market rate.
One of SMUD`s notable PPAs is with the SunPower Corporation, a solar energy company based in California. In 2017, SMUD entered into a 20-year PPA with SunPower for 500 megawatts (MW) of solar energy capacity. This is one of the largest solar PPAs in the United States and will help SMUD achieve its goal of supplying 50% of its energy from renewable sources by 2030.
Under the PPA, SunPower will build and operate a solar farm in the nearby El Dorado County that will generate the contracted amount of energy for SMUD. The solar farm will be built on 2,500 acres of land and will consist of over one million solar panels. It is expected to be completed in 2022 and will be one of the largest solar farms in the world.
The Smud Power Purchase Agreement is an important step for SMUD in its transition to renewable energy sources. It will help reduce greenhouse gas emissions, create jobs, and stimulate economic growth in the region. It also demonstrates the utility`s commitment to sustainable energy practices and its leadership in the industry.
In conclusion, SMUD`s power purchase agreement with SunPower is a significant milestone in the utility`s efforts to pursue renewable energy sources. Through this and other PPAs, SMUD is helping to shape the future of sustainable energy practices and reduce its carbon footprint.