Solar plant could be step to reregulate electricity
Neither the CPV solar- and gas-powered generators or the Criterion wind-power project acquired by Constellation Energy have begun construction. We'll see how quickly they get built -- or in the case of the CPV project, whether it gets built at all. If it does, it may turn out to be Maryland's first step toward reregulating electricity.
CPV's proposed 10-megawatt solar facility is pretty big -- for a solar facility. PVResources.com lists the DeSoto Next Generation Solar Energy Center, in California, as the biggest solar array in the United States. It was completed in October and is 25 megawatts. That's No. 15 in the world, according to PVResources. The biggest photovoltaic generator is in Spain -- 60 megawatts. At 10 megawatts CPV's unit would be in the top 100 in the world, but presumably many others are under construction and might bump it from the top ranks.
At Calvert Cliffs, Constellation Energy's nuclear reactors can produce 1,700 megawatts of juice, so you can see how small the solar generators are by comparison.
We'll see if the CPV unit gets built at all. For a while now the company has been seeking permits for a companion, gas-fired generator. Maryland needs the extra generation capacity, but there's a catch. CPV says it won't build either the gas or the solar generator without a contract with a customer. But this is not the way electricity deregulation in Maryland was supposed to work.
When the General Assembly deregulated a decade ago, it decided that generation plants should seek customers on the open market instead of having dedicated customers and regulated prices. Letting CPV sign a contract, with, say, Pepco customers or BGE customers, would be a return to the old days. The problem is that no generation company wants to risk building a new Maryland plant without a guaranteed client.
CPV may well get its plants and its customers. The company has been very astute at judging Maryland's political winds. Gov. O'Malley wants some sort of reregulation, and I bet it'll look something like what CPV wants. Adding the proposed solar project to its gas-plant proposal is a brilliant stroke by CPV. The O'Malley administration loves solar. The key question is: How much both CPV plants cost Maryland electricity customers?
Comments
I don't think there is anything per se that precludes a bilateral contract for the power. After all the Clipper Wind project has exactly that as I understand it with the Old Dominion generating co-op. True the current system of bidding required by the Public Service Commission for BGE and Pepco doesn't allow for such deals, but the PSC set up the rules so presumably they could modify them without legislative interference. At least as much as anything can get done in Maryland without legislative interference.
Your cost question is very interesting. I would be quite surprised if the proposed solar facility could produce power at the current 10-12 cents/kwh and recoup its costs. On the other hand if the contract included the nat gas generation then perhaps the combined contract could come in at a reasonable cost as the nat gas plant would produce far more power than the solar facility. I agree the proposal is rather clever.
Thanks for the comment and good point about bilaterals. The state is shopping for renewable power for its agencies, and it could strike a bilateral deal with these guys for solar. But CPV also is trying, through the PSC, to make a utility buy MW from its gas plant. That would be a game-changer. - -JH
Posted by: Charie | December 1, 2009 2:55 PM
If they're assuming the SRECs are sold off for RPS compliance, 10 - 12 cents is a very doable (actually, rather high) solar $ / kWh for a 2011 solar install in MD. Grab the Lawrence Berkeley Labs "tracking the sun" report on installed solar costs and then figure a 25-30% decline for late '09 / '10 reported by most manufacturer / integrators, sell thhe MD SRECs for $.25 or better per kWh, get some finance based on a fixed bilateral of some kind, and it starts to look easy....
Posted by: WOV | December 2, 2009 2:35 PM
As the Clipper project shows, the current deregulated market can achieve long term contracts for renewable energy. The problem for CPV is not getting a long term contract for the solar plant. They don't need to change any laws do to that. In fact, Clean Currents would have interest in that deal. The problem is a long-term contract for a gas plant. Natural gas, unlike wind and solar, is highly volatile price-wise and very difficult, if not impossible (at a good price) to lock in for the long term.
Posted by: Gary Skulnik | December 3, 2009 11:48 AM
You should do a column on rooftop solar generators. The utilities are attemptimg to gut the carry forward of Kwh by zeroing out each month. You should take a look at Rulemaking 41 (RM41) on the PSC website and read the Maryland Energy Admin evaluation. Looks like utilities only want to deal with other utilities. Monopoly power at its worst. I am a Solar Tier1, Level 1 rooftop generator and you can see my initial comments in the RM41 docket.
Posted by: Paul Verchinski | August 31, 2010 12:19 PM