Dive Brief:
- SunEdison, the world’s biggest renewables developer, began construction in Colorado on the 156 MW Comanche solar installation. Its output will go to Xcel Energy subsidiary Public Service of Colorado, the state’s dominant electric utility, and Bloomberg reports the power will cost less than if it came from any other source.
- The project’s 25 year power purchase agreement (PPA) with Public Service was won through a 2013 open solicitation. SunEdison’s bid price — undisclosed at the time — beat those for natural gas generation at $5.90 per million British thermal units (mmbtu) for 20 years and at $5.96 per mmbtu for 25 years, according to PSC. Natural gas was $2.71 on August 21 but forecasted by the utility to be over $6 by 2020.
- The PPA with SunEdison provides the added value of helping Public Service of Colorado comply with the state's 30% renewables by 2020 mandate and allows the utility to sell power without any fuel price risk, a utility executive told Bloomberg.
Dive Insight:
Record low prices for solar are coming in across the country, and in some locations solar is already the least-cost provider of electricity.
Austin Energy's recent request for 600 MW of solar yielded multiple declining bids. The most recent was under $40 per MWh (less than $0.04 per kWh). That's 20% lower than 2014’s $0.045 per kWh price for a 150 MW solar project and only 25% of 2008’s $160 per MWh ($0.16 per kWh) bid for a 30 MW project.
The price of solar is dropping so precipitously that Austin Energy leaders, concerned about buying too high, want to slow the march toward the utility's 600 MW solar target by completing contracts for only 200 MW at present. They are considering developing 400 MW in-house.
NV Energy, a subsidiary of Warren Buffett’s Berkshire Hathaway Energy, also recently signed a PPA for the 100 MW output of First Solar’s Playa Solar 2 installation at $0.0387 per kWh, which is thought to be the lowest rate for solar yet made public, according to Bloomberg News, and likely the cheapest electricity available in the U.S. today. NV Energy paid $0.1377 per kWh in 2014 for solar.
