Charlotte, North Carolina-based Blue Sphere Corp., an international independent power producer (IPP) that is globally active in the clean energy production and waste to energy markets, announced the anaerobic digestion (AD) facility that it has been developing in Charlotte, North Carolina, has received confirmation that Duke Energy has accepted the notice of or commercial operations date (COD).
On Nov. 18, 2016 as previously announced, the Charlotte facility connected to the electrical grid with Duke Energy. Both of these events mark major milestones for Blue Sphere and the Charlotte development as all three generators are now operating. The facility will now enter the mechanical completion, feedstock ramp-up and commissioning phases of the project.
These phases include the gradual intake of waste from our feedstock suppliers, increasing the biogas production and renewable energy generation, commissioning the waste-water and digestate treatment systems and completing all other mechanical features needed for the plant to operate at its full capacity. This ramp-up and commissioning period take approximately three to four months and at that time the project is fully operational generating its "name-plate" electricity output.
The milestone of connecting the Charlotte facility to the electrical grid also triggers certain financial changes for Blue Sphere. The company will now recognize a portion of the deferred revenues listed in the liabilities section of the balance sheet as equity. The amount of deferred revenues that will be recognized as equity will be approximately US$5.5 million. This change will be reflected in the year-end financial reporting of the company.
The North Carolina biogas plant will generate 5.2 MW of renewable electricity. The energy produced by this facility will be purchased under long a term power purchase agreement (PPA) with Duke Energy.
Once fully operational, the facility is estimated to produce annual revenue of approximately US$10.0 million and Operating Income of approximately US$7.3 million. Blue Sphere owns 25% of the Charlotte project. Once online and at full operating capacity, the Blue Sphere cash flow participation from the projects will take the form of equity dividends. In addition, the project qualifies for and has received incentive tax credits. Blue Sphere and its financial partners will receive the benefits of these incentives by either taking credits against project earnings or potentially selling the benefit to another user at a discount.
"I am very excited about achieving this important milestone for the facility in Charlotte. Getting to this point has not come without challenges and we have met and overcome them all. Our team of talented employees, operating partners and financial partners have worked very hard to make this project come to life and I could not be more proud. We believe that this milestone is a testament of what is to come," said Shlomi Palas, the Blue Sphere CEO.
