Utilities traditionally have met renewable portfolio standards with power purchases from IPPs. But new approaches are allowing utilities to build their rate bases with investments in solar...
PV vs. Solar Thermal
Distributed solar modules are gaining ground on concentrated solar thermal plants.
Like an ever-receding mirage, solar power has for decades been viewed as the future of electric generation. It always seemed to offer virtually unlimited potential, yet always was just out of reach. Now, it is closer than ever.
With soaring prices for fossil fuel and intensifying concerns about climate change, many state legislatures have adopted increasingly ambitious mandates for developing renewable resources through instruments such as renewable portfolio standards, feed-in tariffs, so-called green tags and net-metering standards (See tables, “Net Metering in the States”) . These mandates, along with dollops of federal and state subsidies, are now turning the solar mirage into a reality.
As the industry approaches the new solar oasis, companies and regulators will take a closer look at the differences in prices to be paid for different solar technologies, and will compare them to other options—most notably windpower. While all of the solar technologies promise abundant and competitively priced electricity, for the long-term future the most economically viable options might not be the ones utilities have embraced in the past. Namely, photovoltaic technologies (PV) are appearing more attractive than concentrated solar thermal plants.
Wind Settles Down
The primary beneficiaries of government support for renewable energy projects have been windpower developers. Wind resources currently account for the majority of new renewable resources. Thousands of megawatts of capacity dot the landscape, especially across the sparsely populated expanses of the West and Midwest. Wind manufacturers have made great strides in exploiting scale economies. The generating capacity of individual turbines has increased many times over (with generating capacities today of over 1.5 MW) and so has the scale of individual wind farms. These typically contain dozens or even hundreds of turbines.
For a while, it seemed as if windpower would yield electricity at prices able to compete favorably even with the most efficient natural gas-fired facilities. But all has not gone smoothly with windpower, which has, to some extent, become a victim of its own success. Growth in manufacturing capacity for wind turbines has not kept pace with demand—to some degree stymied by the on-again, off-again status of federal tax credits for wind development. This has resulted in increased prices for turbines and multi-year queues.
Moreover, the full cost of providing needed transmission infrastructure for these wind developments hasn’t always been accounted for in valuing the net benefit of wind-generation additions. The best sites for wind developments tend to be far from existing transmission infrastructure. Some states have responded to the lack of transmission infrastructure by forming government organizations to identify the necessary infrastructure