Dive Brief:

• The Los Angeles Department of Water and Power (LADWP) is preparing a potentially world record-setting power purchase agreement (PPA) for solar + storage at 1.997 cents and 1.3 cents per kWh, respectively.

• LADWP presented the 400 MW solar, 800 MWh storage project to the city's Board of Power and Water Commissioners on June 18, previewing its planned July 23 submission for approval. The solar + storage contract would beat out the previous U.S. record, a 2.376 cents per kWh solar project proposed by NV Energy in June 2018, with both the Nevada and California projects under developer 8Minute Energy.

• LADWP has a goal of generating 100% of its power from carbon-free resources by 2050, five years after California's mandate for its investor-owned utilities to reach 100% clean energy. The project will make up approximately 5% of the capacity necessary to meet that goal, according to the municipal utility.

Dive Insight:

As states and utilities continue to pursue aggressive clean energy goals, competitive power prices are making that transition more attractive to ratepayers and power providers alike.

LADWP said the project could include the cheapest bid for solar+storage in the world in its presentation to the commission. The current solar price world record was in Mexico for 1.97 cents per kWh, PV Magazine reported.

"This is, I believe, truly revolutionary," manager of integrated resource planning at LADWP James Barner told the board.

The Eland Solar + Storage Center is the product of over 130 proposals and would be the first integrated battery/photovoltaic system for the LADWP, the utility said. The project will be built out in two phases, starting with 200 MW of solar and 400 MWh of battery storage over a 25-year PPA, slated to begin service in April 2023. 

The center "maximizes existing transmission capacity because it can deliver the full output during most of the year," said Barner. The solar portion of the project is intended to act as generation from roughly 7 a.m. to 7 p.m., and the battery will kick in from 7 p.m. to 11 p.m., depending on system needs, according to the utility. 

"This is like music to my ears," Commissioner Christina Noonan told LADWP. "I wish that every procurement request laid out this way — over 130 offerings, lowest price in the United States, great capacity. … I'm very, very, very impressed."

California is seeking more generation in order to meet its peak system reliability needs from 2019 to 2024, and last week launched a procurement track that would add 2 GW of new resources. LADWP noted projects such as the Eland Center are important toward meeting high capacity needs.

"We need to have more capacity on our system and this is an inexpensive way, and a clean way, to do that," said Barner.

Prices for solar are expected to continue falling, potentially dropping as low as $14.07/MWh through 2022, according to an August 2018 report from Greentech Media Research.

LADWP is "actively negotiating" two more PPAs that it hopes to present to the commission by the end of the year, as part of its 100% clean energy goal, Barner said.