US energy company AES is to establish a new subsidiary to develop, own and operate utility-scale solar photovoltaic (PV) installations in a move that will broaden its business portfolio.
AES Solar will be a 50:50 joint venture between AES and Riverstone Holdings, a New York-based private equity firm focused on energy and power. It is aiming to become a global leader in PV project development.
The two partners will each invest $500 million of capital over five years in projects that will be grid-connected. The projects will range in size from 2 to over 50 MW and will consist of land-based PV panels.
AES says that the business will follow a traditional independent power producer and wind business growth model by initially focusing on developments in countries offering the most attractive tariffs. As the costs of PV panels and installation come down, AES Solar will expand into other countries with appropriate market incentives.
“Renewable energy is an increasingly significant part of AES's overall portfolio and currently accounts for 20 per cent of our global generation capacity,” said Paul Hanrahan, AES president and chief executive officer. “Solar is a natural extension of our business, much as wind generation has been, and we see tremendous opportunity for growth in this market. We look forward to partnering with Riverstone in this joint venture, to make solar power a viable energy source worldwide.”
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