Wow,
Tuscon Electric signs solar+storage PPS for 'less than 4.5c/kWh'.
The project calls for a 100MW solar array and 30MW, 120MWh energy storage system, both to be developed by NexEra Energy and deployed by the end of 2019. It is interesting that proposal noted solar/storage Kaua'i PPA as a reference, as well as noting that conventional peakers in Arizona produce power at about $0.20/kWh. There is no word on who will supply solar panels and batteries for the project.
Another interesting tidbit is that:
As promised, here is my take on the significance of the sizing of the storage portion of the system.
Almost all large solar+storage projects had storage capacity in kWh rated at 4x of the solar capacity in kW. This sizing makes (averaged overall) solar capacity totally dispatchable (I suspect this sizing rule is geographically dependent, but 4x apparently works for California, Hawaii and Arizona **EDIT** See
@jhm post above on more color and clarification of this - perfect timing
). This means that the BES is large enough that all of the energy generated during the day can be stored and discharged into the grid at any time, say late afternoon/evening peak hours. The advanatge of this sizing is full dispatchability, which, however, comes at a cost of required large BES.
While a lot of attention was dedicated to the elimination of net metering in Arizona, another very consequential proposal a
Clean Peak Standard or CPS, did not garner much attention (I need to do more research on this, but as far as I know now it is still a mandate proposed by the state's consumer advocate and endorsed Arizona Comissioner). Here are the highlights from the link:
An unprecedented proposal from Arizona’s consumer advocate on how to improve the state’s renewables mandate could be a policy whose time has come throughout the nation.
In August, Arizona Corporation Commission (ACC) Chair Doug Little opened the first review of Arizona’s Renewable Energy Standards and Tariff (REST) in almost 11 years. His surprising suggestions to increase the state's 15% renewables mandate to 30% by 2030 and to include new technologies like energy storage were initially expected to be the most controversial topics in the proceeding (
Docket E-00000Q-16-0289).
But a
white paper just introduced last week by Arizona’s Residential Utility Consumer Office (RUCO) would enhance the mandate in a completely new way by adding a mandate for renewables to meet peak demand.
While the idea is new, its immediate relevance to grid needs across the nation is already attracting attention of regulators, utilities, and important private sector players in other states.
Traditional renewables mandates do not differentiate between renewable MWh based on their value to the grid, the RUCO white paper notes. But states with high wind and solar penetrations are already seeing times when there is
more renewable generation than the system needs. That overgeneration can result in curtailment if it occurs during times of low power demand, with fast-reacting natural gas turbines ramping up during evening usage spikes.
Driven by
renewable portfolio standard (RPS) mandates, more states will be achieving high levels of renewables penetration, the white paper reports. “New approaches will likely be needed to guard against diminishing returns of a simple MWh-based approach.”
The CPS builds on
the RPS construct “by adding a new dimension whereby a certain percent of energy delivered to customers during peak load hours must be derived from clean energy sources,” the white paper explains. A 30% CPS would require 30% of delivered MWh during the identified peak demand period to come from “qualifying clean peak resources.”
As can be noted, reduction of the BES portion of the system for the TEC solar+storage system from the "conventional" MWh size of 4x of the solar MW to the MWh capacity of 4x of 30% of the solar MW capacity, i.e. 30 MW, 120MWh has the following advantages:
- Reduces overall cost of the system and PPA pricing due to reduced BES size, which makes only 30% of solar MW capacity dispatchable, with the rest being provided to the grid at the time it is generated
- is consistent with the CPS approach
- demonstrates that solar+storage can compete not only with fossil **peaking** generation capacity, but fossil **intermediate** capacity as well
Currently the CPS approach is being seriously considered in California and Arizona, and, if adopted, will be another de-facto mandate for the deployment of BES, while addressing grid operator concerns over high penetration of the renewables.
