In California, is smaller better?

After several years of promoting large-scale solar projects capable of generating hundreds of megawatts, political and administrative circumstances may create an opportunity for more smaller PV projects. 

Large-scale PV and CSP projects have faced a number of new challenges in recent weeks. At the end of December, Sen. Dianne Feinstein introduced legislation seeking to block development of large-scale solar and wind projects on 1 million acres of federal land in California. In early January, environmental groups continued their challenge to BrightSource Energy's 440 MW Ivanpah Solar Power Complex, citing a federal government finding that the development site interferes with the habitat of two dozen rare tortoises. BrightSource cancelled another large-scale CSP project in the Mojave Desert in September, citing a desire to avoid wrangling with Sen. Feinstein over her proposed legislation.

Difficulties obtaining development permits from the Bureau of Land Management, as well as raising capital sufficient to fund the construction of large-scale projects, have hampered the development of this segment of the U.S. solar market over the last two years. The challenges are so apparent that the California Public Utilities Commission has started recalibrating its efforts to developing renewable energy generating capacity in California.

In March 2009, the CPUC put out a proposal for a market-based feed-in tariff for projects ranging from 1.5 MW to 20 MW. Under the plan, the CPUC would mandate IOUs in California to purchase the revenue requirement equivalent of 1,000 MW over a four-year period through a reverse auction. In a reverse auction the utility would set a ceiling price and accept project bids up to that price until the bids equal the utility's capacity allocation. Projects between 1.5 MW and 10 MW would be must-take, while those between 10 MW and 20 MW would be at the utility's discretion. A ruling on the feed-in tariff is expected in 2010, with implementation to occur beginning in 2011.

If approved, the regulation would move California closer to solar development patterns in other states where "distributed" large-scale projects connected at the substation are the norm. In Texas, Ohio, Nevada, New Mexico and other solar states most operational and announced system-sided PV projects are between 10 MW and 30 MW, far smaller than the multi-hundred MW projects on the books in California. These projects require far less land, little or no transmission build-out or distribution-level improvements, and have much shorter construction lead times than the centralized projects planned for California. Because they are sited closer to load, these projects typically incur lower interconnection costs and lose less power post-busbar than projects cited further out.

That's not to say there's no future for the centralized large-scale solar projects. In fact, the BLM recently committed to fast-track review of 14 large-scale solar projects before December 2010, only one of which is smaller than 100 MW. Still, in the years it may take to fully develop the 6.5 GW of solar capacity these projects represent, a large number of smaller projects built on private or non-federal public land may become operational. In this case, speed to commissioning may outweigh overall cost to the benefit of "distributed" large scale plants, since utilities in states with Renewable Portfolio Standards are required to meet annual targets. In California, where the three major IOUs are still short of their 2010 goal, we may see a number of "distributed" large scale PV plants pop up over the next 24 months.   

 

 

 

Tags: feinstein, pacific gas and electric, pge, pv, solar, texas, thermal, utility