Each investor-owned utility in California has developed a program designed to use distributed generation photovoltaics as wholesale generators. The approved programs total 1.1 GW over the next 4 years–an amount equivalent to the daytime output of 2 mid-sized coal plants. The first results are coming in–and are exciting.
PG&E just filed for approval of its first purchases under the program (pdf): 3 projects, each under 20 MW, and each under the price of natural gas. That’s right–under the 2009 MPR, which is a calculation of the 20 year levelized cost of energy from a 500 MW combined cycle gas turbine.
There’s plenty more where that came from.
We have said it before and we’ll say it again: the transition to renewable energy is a source of economic opportunity, not economic pain.
A few notes on elements of successful programs in this space:
* Standard contracts. In order to reduce transaction costs and help ensure project viability, parties pre-negotiated standard form contracts for this program.
* Interconnection. PG&E provided maps to help developers understand where interconnection might be accomplished most easily.
* Competition. Over the years, California has nurtured a vibrant solar industry, and this program provides developers with multiple market opportunities
* Project viability. For any program with limited contract capacity, it is critically important to ensure that contracts go to those with the intent and means to actually bring the projects to fruition. In order to protect the integrity of the process, this program requires winning bidders to submit development security.
Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.