Latest CPUC Report on Cost of Renewables in California

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The California Public Utilities Commission prepares quarterly reports on the status of the state’s Renewable Portfolio Standard. The latest was released in November. You can read the whole thing here (pdf).

Some of the highlights include:

  • More than 783 MW of renewable capacity came online in the first and second quarters of 2013 and over 1,944 MW is scheduled to come online before the end of the year
  • In the first and second quarters of 2013, the IOUs submitted 103 contracts for CPUC approval, representing 447 MW of renewable capacity.
  • In the first and second quarters of 2013, the CPUC approved 107 contracts, representing 756 MW of renewable capacity

Nice progress — 2 GW more coming online by the end of the year, and that doesn’t even include behind-the-meter (rooftop) installations.

The premise behind RPS policies is that the way to bring down costs is to build scale. The theory is that as market opportunities expand, economies of scale kick in, the industry learns helpful lessons, and costs come down. How’d that theory work out in practice?

“The bid prices in the 2012 RPS Solicitation were highly competitive compared to bid prices from the 2011 Solicitation. The weighted average bid price in the 2012 Solicitation was approximately 28% lower than the weighted average bid price from the 2011 Solicitation. Specifically, there continues to be a downward trend in pricing for solar PV, with the weighted average price of solar PV bidding into the 2012 Solicitation dropping 34 % from the 2011 Solicitation.”

Premise worked out pretty well, I’d say.

What are those prices? Actual contract prices are kept confidential, but the report does offer some helpful information (page 12):

“The CPUC has approved 30 contracts, for 400 MW of renewable DG capacity, from the first and second RAM [Renewable Auction Mechanism program — for systems 3-20 MW in size] auctions. Of the 30 contracts, 23 were for solar PV projects (330 MW of a total 400 MW). The weighted average price of all contracts (post-time-of-delivery adjusted) from the first and second auctions was less than $90/MWh.

The third RAM auction closed on December 21, 2012. In the second quarter of 2013, the Commission approved 21 contracts, representing 337 MW of capacity, from the third RAM auction. Of these 21 contracts, 17 were for solar PV projects (295 MW of a total 337 MW). The weighted average price of all these contracts (post-time-of-delivery adjusted) was less than $80/MWh.”

This is emission-free energy, well under the price necessary to build new coal or nuclear plants, and competitive with natural gas.

If you want large amounts of emission-free electricity, all you have to do…is buy it. No waiting around for magic-bullet technology necessary.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

About Author

Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.