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With grazing sheep and oil giant Shell, community solar developer Silicon Ranch raises $600 million

A solar panel sits facing the sky on the ground, above beds of crops
Image credit: Wix

Since launching in 2011, community solar developer Silicon Ranch has risen to become one of the largest independent power producers in the country, with a portfolio that includes more than five gigawatts of solar power and battery systems coast to coast, from the U.S. to Canada.

Over the last thirteen months, the Nashville-based company raised more than $1 billion in equity funding, capped by this month’s $600 million round.

Silicon stands out from competitors, with its acquisition of Clearloop, which helps companies offset CO2 via financing solar development to its 2021 launch of Regenerative Energy.

Along with opening up new opportunities for solar in the Southeast, Regenerative Energy is the hallmark of many of Silicon Ranch’s rural projects where grazing sheep and cows can be found along hundred-to-thousand-acre patches of solar panels.

According to Silicon Ranch, they always try to hire and train locals; the sheep are no exception, from the 400 ewes flocking around panels in Mississippi's Hattiesburg Solar Farm to those grazing in the shade of panels in Chattanooga, Tennessee, to the ones fertilizing and seeding the soil in the 100-megawatt project in Early County, Georgia.

With Regenerative Energy, Silicon partners with regenerative ranchers and local farmers to keep solar farmland in agricultural production and use holistic agriculture practices on solar farms.

The company says this includes practices that restore grassland ecosystems, remove carbon from the atmosphere, revitalize the soil, improve air and water quality, increase biodiversity, and create long-term jobs for farmers and sheep alike.

But the holistic approach that helps Silicon Ranch be a good neighbor to rural communities isn’t the only feature that sets them apart. Perhaps more head-turning than the sheep is the company's record year in funding.

Led by existing shareholders including Manulife Investment Management, TD Asset Management Inc., and Mountain Group Partners, January’s equity raise comes in two parts, starting with $375 million closed in December, and ending with $225 million rolling in through early 2023.

Silicon Ranch kicked off 2022 with a $775 million round, where the most headlining-grabbing investor was oil giant Shell.

In 2018, Shell secured a 44% stake in the company. The same year, Silicon Ranch became the U.S. solar platform for Shell. According to Silicon, the transaction enabled it to accelerate its growth strategy by developing new projects, entering new markets, and expanding product offerings across its portfolio.

But for Shell, Silicon was the latest in a long portfolio of solar projects around the world. Recently, the two began a solar project in Alberta, Canada, the solar developer’s first project in the Great White North, and the region’s first large-scale solar farm.

The project is a 58-megawatt solar farm adjacent to Shell’s Energy and Chemicals Park Scotford in Edmonton, Alberta. According to Shell, the project will provide solar power to Shell’s Scotford refinery for the next 25 years, allowing 20% of the refinery’s energy to be renewable.

The project began construction in 2022 and is set to begin providing electricity later this year.

Along with energy efficiency goals, the refinery is also the site of a carbon capture and storage (CCS) operation. At Scotford, Shell also uses a portion of biofuels to reduce the amount of CO2 emitted.

The project epitomizes Shell's growing efforts to expand its renewable energy portfolio while still pumping out billions of tons of greenhouse gases. At the Scotford oil refinery, it converts synthetic crude oil into gasoline, diesel, jet fuel, propane, and butane. This of course releases massive amounts of emissions, and despite the carbon capture technology, Vice reports that Scotford emits far more greenhouse gases than it claims to capture.

The human rights organization Global Witness found that the “climate forward” plant has the same carbon footprint per year as 1.2 million fuel-powered cars. In the report, the blue hydrogen Shell claimed to be produced with natural gas and CCS support, was found not to be very "blue" at all.

Shell has a number of renewable energy investments, including its recent purchase of Europe’s biggest biogas producer, Denmark-based Nature Energy. The company sold €1.9 billion. As part of the deal, Shell will acquire Nature Energy’s 14 industrial plants and an international development pipeline of about 30 plants across Europe and North America.

The acquisition comes one month after competitor BP announced its $4.1-billion plan to buy Archaea Energy, a US-listed biogas producer.

These clean energy purchases by big oil companies are exemplifying a trend, and BP and Shell are just the beginning. Other global giants like America’s Chevron and Exxon, France’s Total, and Italy’s Eni pumped billions into clean energy over the last few years, partnering with and buying stakes in wind, solar, electric vehicle, and carbon capture ventures. Many criticize these investments as massive greenwashing, exemplified by Shell’s enormous greenhouse gas emittance in Scotford despite its CCS initiative.

Technically, Shell (like everyone else) has a plan to reach net-zero emissions by 2050, but this is far from guaranteed as the fine print reads, “as these targets [net zero by 2050 and Net Carbon Footprint by 2035] are currently outside our 10-year planning period.”

It goes on to say “In the future as society moves towards net-zero emissions, we expect Shell’s operating plans to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.”

The oil and gas industry saw record profits this year and as E&E News reports, the industry's 2023 will be shaped by Big Oil's investment in renewables and natural gas, along with boosting CCS to help reduce emissions.

Silicon Ranch's partnership with Shell is a notable development as the oil giant uses renewables to boost energy efficiency at the Scotford refinery and lower its carbon footprint in terms of power generation. However, the lack of emittance reduction with its CCS plant continues to raise eyebrows.

In the meantime, the money from Shell and Silicon’s other investors will support the company’s expansion, hiring, and construction of a multi-gigawatt pipeline of contracted projects, Silicon Ranch ​​Chief Commercial Officer Matt Beasley told Canary Media. According to Beasley, owning and operating the projects for the long haul has allowed Silicon to build trust with the rural communities it is a part of.

Since Shell's initial investment in the company, Silicon Ranch has more than tripled its contract portfolio. Much of this portfolio is in the rural communities, Beasley points to, dotting the U.S. south. By working here, Silicon Ranch says that they are often the largest taxpayer in the country, providing dollars that are invested back into the community.

From the panels to the sheep, the company says their Regenerative Energy approach adds value to the land, "creates traditional, long-term jobs for the rural workforce and generations to come," and "helps meet the need for decentralized and resilient food systems to ensure families are fed."

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