AES Energy said Tuesday that it signed long-term contracts for 494 MW of renewables capacity in the first quarter and it is on pace to sign 10 GW of renewable power purchase agreements through 2022.
The Arlington, Virginia-based merchant firm, which has had operations in as many as 28 countries in the past, also said it has agreed to sell assets in Jordan and Ireland for $211 million, reducing its footprint to 13 countries.
The company's CEO, Andres Gluski, said AES has signed a 12-year tolling agreement to sell up to 18 trillion Btu/year of LNG in the Caribbean, beginning in 2020.
Also Fluence -- AES' energy storage joint venture with Siemens -- has delivered or been awarded 776 MW in 81 battery storage projects in 18 countries, he said.
Asked about the April 19 incident at an Arizona Public Service battery storage facility north of Phoenix, in which four first responders received chemical burns, Gluski said, "What we had was a thermal event, not a fire, per se."
He said a Fluence and APS investigation continues and he understands how important it is for AES to inform the battery storage industry "of what occurred and what the root causes were."
GREEN, BLEND, EXTEND
Gluski said that AES "continues to execute on our strategic plan: de-risking our portfolio; growing our LNG and renewables businesses; and becoming a technology leader."
The company has a $9.25 billion capital expenditure plan for 2019-2021 to help it bring online a gross 4,462 MW capacity over the next three years.
It reported that across its global portfolio it plans is to bring online 1,327 MW of wind, solar and energy storage between 2019 and 2021 at a cost of about $1.94 billion. It said that 49% of that capacity is due to come online in the US.
It also has a 49% stake in a 1,320-MW coal-fired facility in India, a 100% stake in the 1,284-MW gas-fired Southland repowering project in California, and 62% of Chile's 531-MW Alto Maipo hydroelectric project.
Gluski said that in locales such as Mexico and Chile the installation of wind generation is not solely for environmental purposes, but also to help increase generation capacity where wind replaces thermal. "To get more capacity you can do "green, blend and extend" or install storage," he said.
In Mexico, where Gluski said AES is "relatively a little exposed, let's say, to some of the changes that they have announced for the CFE and others," the strategy is to "sign long-term, dollar-denominated contracts with investment grade off-takers in the private sector."
"I think our clients are looking for green energy. In many cases they're looking for the green, blend and extend. So those projects continue on track and we expect to be signing more [of them]," he said.
In the US, Gluski said he was "particularly pleased" with the speed at which AES has been able to transition projects from development to construction.
AES has received all necessary permits for subsidiary sPower's 500-MW Highlander Solar Project in Virginia, the largest solar project in the mid-Atlantic.
"This project has long-term contracts with commercial and industrial customers such as Apple and Microsoft, and we expect to begin construction this summer with completion targeted for 2020 and 2021."
LNG TOLLING AGREEMENTS
AES is focusing its LNG efforts on Vietnam, Panama and the Dominican Republic.
Its LNG business "is based on long-term tolling agreements with no direct commodity risk," Gluski said.
The expansion of AES' LNG projects "is complementary to our renewable businesses as it provides capacity while displacing heavy fuel oil and diesel with cheaper and cleaner natural gas."
In Vietnam, AES is developing 450 TBtu of LNG storage capacity and 2,00 MW of associated combined-cycle gas plants.
"We expect this project to significantly contribute to our growth beginning in 2023," the AES CEO said.
In the Caribbean and Central America, AES has a total of 150 TBtu of LNG storage capacity in Panama and the Dominican Republic.
Gluski said he assumes AES will "contract some of the excess capacity available at these two terminals."
In fact, in Q1 2019, AES signed a 12-year contract for up to 18 TBtu of annual capacity, he said, and "locked in the terminal capacity payments that are assumed in our guidance through 2022."
