Southern California Edison Buys 250 MW of Distributed Solar PV for Less Than Electricity from Natural Gas
The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/southern-california-edison-buys-250-mw-distributed-solar-pv-less-electricity-natural-gas/Updated 3 PM: Preliminary numbers had suggested that Southern California Edison’s distributed rooftop solar PV purchase would be among the most cost-effective solar projects in the world, and data released yesterday confirmed that:
Southern California Edison has selected 250 MW worth of solar bids from companies able to produce solar electricity for 20 years for less money annually than the 20 year levelized cost of energy of a combined-cycle natural gas turbine power plant.
SCE’s bidding process for smaller renewable projects is smart. These small projects do not face the multi-year bureaucratic delays for extensive reviews, like most utility-scale solar, so each small unit can be built as quickly as normal commercial rooftop solar projects. They are made up of multiple distributed solar installations of under 20 MW, which in combination total a power plant-sized 250 MW.
…The requirement is that the renewable energy has to be priced to cost no more than the Market Price Referent (MPR) – which is an annual calculation of the 20 year levelized cost of energy of a combined cycle gas turbine.
The MPR has recently been around 11 cents per kilowatt-hour, so the solar PV projects will produce electricity for less than the retail rate in southern California. There’s indication of enormous distributed PV demand, because SCE received bids for up to 2,500 MW of projects, but only accepted 250 MW.
talked with Al Weinrub as he wrote this report and I think it’s another great demonstration of the cost and local economic superiority of distributed renewable energy generation. Commuity Power helps overturn the conventional wisdom that bigger is better, illustrating how decentralized, distributed renewable energy can provide a cost-effective and economy-boosting strategy for meeting our power needs.
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