Los Angeles Utility Scale Storage Project: Check my Math !!

[SageBrush]

Los Angeles seeks record sub-two cent solar power price

2 cents a kWh for PV delivered at time of generation;
another 1.3 cents a kWh for electricity stored first

I used the latter figure to estimate the storage cost and came up with $118 per kWh -- installed

Calculated as 365 days a year, 25 year PPA:
0.013*365*25

I'm flabbergasted if it is correct.

 

[Misterbee]

Los Angeles seeks record sub-two cent solar power price

2 cents a kWh for PV delivered at time of generation;
another 1.3 cents a kWh for electricity stored first

I used the latter figure to estimate the storage cost and came up with $118 per kWh -- installed

Calculated as 365 days a year, 25 year PPA:
0.013*365*25

I'm flabbergasted if it is correct.

Noob to solar here. Is this a good thing or a bad thing?

 

[SageBrush]

If people are thinking that $118 a kWh is in-line with prior Elon announcements, the differences here are

1. Installed, not cell price or even pack price
2. Includes BOM
3. Includes Inverter
4. Includes connection
5. 25 years of operation
6. Financing included

Hard to imagine cell prices much over $20 a kWh to make this work for the developer.

 

[nwdiver]

Los Angeles seeks record sub-two cent solar power price

2 cents a kWh for PV delivered at time of generation;
another 1.3 cents a kWh for electricity stored first

I used the latter figure to estimate the storage cost and came up with $118 per kWh -- installed

Calculated as 365 days a year, 25 year PPA:
0.013*365*25

I'm flabbergasted if it is correct.

Utility scale solar is around ~$1/w or ~$1000/kW. I think the actual cost of energy is closer to ~$0.02/kWh the $0.013/kWh figure is based on 'excess' generation.

You forgot hours/day of generation. I think ~6 hours/day is a safe assumption if they're using a tracking array
($0.02/kWh)(6 hours/day)(365days/yr)(25 years) = $1095/kW or ~$1.01/w

Still a great deal.

Remember: Solar capacity is based on Nameplate (kW) not energy produced (kWh)

 

[SageBrush]

@nwdiver , I was figuring the battery cost presuming one full cycle per 24 hour day

The PPA is way too cheap to make sense as I described. They must be counting on substantial FACS revenue and perhaps some arbitrage too.

 

[nwdiver]

Chris, I was figuring the battery cost

Ah; I think that depends on the cycle life. The article mentions using it for morning AND evening peak. That's ~14k cycles over 25 years. But even assuming that it's <$200/kWh. Hard to say...

 

[SageBrush]

The utility has a 25 year PPA; battery life is the owner's problem.
I thought about the comment that AM peak will also be covered but that presumes that the battery is able to regenerate in the AM before load picks up since the preceding evening peak depleted the battery. Call me skeptical

 

[SageBrush]

About the morning supply: I doubt it will be PV sourced but I can well imagine grid arbitrage happening.
Yeah ... this is making more sense now.

 

[nwdiver]

I thought about the comment that AM peak will also be covered but that presumes that the battery is able to regenerate in the AM before load picks

They're likely counting on charging in the early morning... hopefully from surplus wind. I know SPP curtails a lot of wind from ~11pm - 4am.

 

[EinSV]

Can someone help me understand something. We keep seeing these insanely cheap prices for solar and wind projects, with added storage also ridiculously cheap per kWh.

How do we square that with estimates like the one that came out today from GreenTech Media that it would "cost" $4T over 10 years to transition existing fossil fuels to 100% renewables in the U.S. The Price of a Fully Renewable US Grid: $4.5 Trillion

Why can't utilities enter into long-term PPAs like this and get a large chunk of it done "free." There is no upfront cost paid by the utility, and energy costs are very reasonable -- almost certainly cheaper than other alternatives. So using the status quo as the baseline, the solar plus storage component is literally zero cost compared to the status quo.

For context, GTM's estimates are $1.5T for solar/wind, $2.5T for storage and $700B to upgrade the transmission system for a scenario that also sunsets all existing nuclear. It's $500B less without the nuclear component.

Don't get me wrong, I still think it's a no brainer to transition from fossil fuel to 100% renewables for $400B/year -- that's less than 2% of GDP -- but isn't that figure exaggerated given all these extremely cheap solar/wind/storage PPAs we are seeing?

 

[SageBrush]

They're likely counting on charging in the early morning... hopefully from surplus wind. I know SPP curtails a lot of wind from ~11pm - 4am.

Exactly.

I'll venture a guess that the developer is on the hook to supply one cycle per day to the LA utility at 3.3 cents a kWh and any additional cycling is offered to the highest bidder.

 

[SageBrush]

How do we square that with estimates like the one that came out today from GreenTech Media that it would "cost" $4T over 10 years to transition existing fossil fuels to 100% renewables in the U.S. The Price of a Fully Renewable US Grid: $4.5 Trillion

As I mentioned before, that number is an apples to oranges comparison with fossils.

Fossils have relatively low (excluding nuclear) start up costs and expensive running costs.
Wind/Solar are the reverse.

It only makes sense to compare (start_up + running_costs). The clean energy start-up costs may be as estimated but they ignore the subsequent much lower running costs.

As you have realized, the PPA per kWh delivered is the cost of merit.

 

[nwdiver]

How do we square that with estimates like the one that came out today from GreenTech Media that it would "cost" $4T over 10 years to transition existing fossil fuels to 100% renewables in the U.S. The Price of a Fully Renewable US Grid: $4.5 Trillion

Hopefully this doesn't wander too far off topic... but keep in mind that beyond ~20% solar or ~40% wind & solar each additional kWh displaced gets exponentially more expensive. Roughy ~40 - 60% is probably as expensive as 0 - 40%, 60 - 80 as expensive as 0 - 60... and so on... the last ~10% may be just as difficult as the first 90%. We're already curtailing renewables and we're not even at ~30% yet.

This was a bit of a nuclear trop I disagree with but it's a good lecture that presents how shifting to renewables get very difficult at higher penetrations. I think the key is some kind of power => gas (H2 or CH4) NOT nuclear.

 

[SageBrush]

Hopefully this doesn't wander too far off topic... but keep in mind that beyond ~20% solar or ~40% wind & solar each additional kWh displaced gets exponentially more expensive. Roughy ~40 - 60% is probably as expensive as 0 - 40%, 60 - 80 as expensive as 0 - 60... and so on... the last ~10% may be just as difficult as the first 90%.

Do those analyses use today's prices ?
California is at ~ 33% renewable and the PPA prices of clean energy are tumbling.

Once the psychopath currently in the white house is thrown into jail and large scale transmission projects enable regional sharing I suspect that the anticipated costs of high penetration clean energy are not going to happen.

 

[nwdiver]

Do those analyses use today's prices ?

No. That's the other problem I have with that lecture. They assume $6/w for nuclear.... ROTFLMAO. Not sure what they assume for solar or wind. The key takeaway is the exponentially increasing levels of curtailment.

Absent demand response or storage you're throwing away ~28% of generation to get to 80% renewables...

 

[SageBrush]

^^ 28% over generation is nothing compared to the price curve PV is enjoying -- even if true which I doubt if EVs are around to soak up the 'excess.'

 

[Misterbee]

I am new to solar, and considering taking the plunge. Please, can anyone decode the jargon here?

 

[EinSV]

^^ 28% over generation is nothing compared to the price curve PV is enjoying -- even if true which I doubt if EVs are around to soak up the 'excess.'

That's a great point.

Ignore the last 20% for a minute because the last part of the transition to 100% renewables is more complicated, but if we are seeing <2c/kWh PPAs already, even with 28% of the generation capacity wasted wind/solar PPAs should be pretty cheap. (And we probably wouldn't waste that much because storage is also cheap (1.3c/kWh in the new LA PPA) and there is low hanging fruit for demand mgmt, etc.)

Anyway, don't mean to distract from the good news in this thread, I am just wondering if it is better news than appears at first glance for the cost to get to 50%, 80% and eventually 100% renewables.

 

[EinSV]

I am new to solar, and considering taking the plunge. Please, can anyone decode the jargon here?

Hi @Misterbee -- sorry for all the acronyms! "PPA" is a power purchase agreement. Utilities enter into these agreements with power suppliers (could be natural gas, coal, solar, wind, whatever) for the delivery of electricity under certain conditions.

The article in the OP is about a large, utility scale solar project that also includes battery storage that allows the energy to be used at night or when the solar panels are not generating power. Hope that helps.

 

[SageBrush]

To sum up my OP:
My attempt to estimate 2020 - 2030 battery storage costs is flawed because the developer is counting on FACS and arbitrage revenue.

This does not detract from the amazing deal the utility got for itself; it only means I don't have a clue how much the developer expects to pay for the storage.