When FERC opened wholesale power markets to competition a decade ago in Order No. 888, it codified a system for awarding grid access known as the pro forma Open-Access Transmission Tariff (OATT),...
Renewable Reality Check
How solar PV could redraw the map for green energy and grid investment.
The report then proceeds to conduct a so-called “sensitivity analysis” to get a handle on what these lower costs might mean in practice if they could be accepted as valid:
“This sensitivity tests an alternate thin-film technology for solar with capital costs of about $3,700/kWe, roughly half that of tracking crystalline. This figure represents goals and cost targets provided by manufacturers and developers. Notably, these capital costs are also lower than the large-scale solar thermal projects; therefore thin-film solar is assumed to occur both at the distributed scale (20 MW) and also in large sale blocks (150 MW).
“The results of this sensitivity run are dramatic… More importantly, the cost-competitive in-state non-CREZ resources increase by more than 20 times to about 45,000 GWh/yr. This figure is over two-thirds of the net short requirement. The large majority of these non-CREZ resources are 20-MW solar PV projects assumed to connect to the distribution system. (See, RETI Phase 1B Final Report, January 2009, pp. 5-27, 5-28.)
To put this long statement into perspective, consider these written comments from Kim Delfino, California Program Director for the environmental group Defenders of Wildlife:
“The RETI report only briefly acknowledges that solar PV potential is virtually inexhaustible, and that at projected decreases in PV costs, a fleet of small-scale, direct-to-grid PV facilities distributed around the state could provide two-thirds or more of the net short renewable energy needed by 2020 to meet the state’s goals.
“This direct-to-grid scenario,” writes Delfino, “would drastically reduce the need for new transmission and for massive transmission dependent projects.”
In truth, there remains some debate about whether the substations and local distribution networks across California are sufficiently robust to accept distribution-level interconnections of modular solar PV units as large as 20 MW.
PG&E noted in its written comments on the RETI Phase 1B report that “in areas where there are large parcels of undeveloped land suitable for 20-40 MW PV installations many of the PG&E substations are small, with a capacity much less than this amount.
“Therefore,” notes PG&E, “the total distributed PV potential is likely substantially less than the estimates suggested in the Phase 1B report.”
Even OptiSolar, a major manufacturer of thin-film solar panels, echoes PG&E’s concerns over substation capacity: “The development timeframe for the total build out of 20-MW projects [distributed, point-of-use solar PV] would be much longer than building the larger utility scale PV projects.”
Yet the promise of distribution-level renewable energy still appears too compelling to ignore for engineers such as Bill Powers, of Power Engineering of San Diego.
In written comments he offered in November 2008, Powers noted that the 30-percent federal solar investment tax credit and other incentives approved in last fall’s $800 billion stimulus package and now made available even for generation built by investor-owned utilities could effectively lower the gross installed capital cost of a thin-film solar PV system by 58 percent, from the $2,700 to $3,500/kW range to $1,130 to $1,470/kW.
Under that assumption, wrote Powers, a newly installed thin-film solar PV capacity of 14,000 to 18,000 MW would come in for the same