Energize Weekly, January 10, 2018
Xcel Energy received an “unprecedented” response to a call for new generation projects for its Colorado subsidiary with more than 430 proposals, according to a report filed by the utility with the Colorado Public Utilities Commission.
“For comparison, the Company received 55 bids in the 2013 All-Source Solicitation,” Xcel said in the report.
More than 350 proposals are for renewable energy projects with an average price for 96 wind projects at 1.8 cents a kilowatt-hour (kWh) and the 152 solar photovoltaic (PV) projects 2.95 cents per kWh.
“The Company has not yet sufficiently evaluated all of the proposals . . . to determine if any contain any ‘fatal flaws’ such that they are unlikely to achieve their proposed in-service dates,” Xcel stated.
The proposals add up to 238 projects with Xcel having some level of ownership in 99, including a proposal by the utility to build its own facility. Other plans would have Xcel receive ownership after the facility is built, buy existing generation or have a joint purchase power agreement with company ownership.
The median price for the 30 combustion turbine/internal combustion engine proposals was 48 cents a kWh, but the prices for the two natural gas-fired combine-cycle turbines were not released. These turbines are among the most cost-effective generation technologies. A 2017 energy cost study by the financial adviser and consultant Lazard put the of natural gas turbines at 4.2 cents to 7.8 cents a kWh compared with 3 cents to 6 cents for wind.
The Xcel filing also gives a glimpse of the prices on new technologies, and combinations of generation and storage.
The 28 stand-alone battery storage projects average 1.13 cents a kWh and the 11 wind plus storage projects average 2.1 cents a kWh. The 87 solar plus storage projects average 3.6 cents a kWh.
That median price for solar plus storage would appear to be the lowest ever offered, according to Shaye Kann, head of research at GTM Research, a clean tech marketing and consulting firm. Kann said the lowest known price to date is in Arizona at 4.5 cents a kWh.
There were seven proposals for a combination of wind, solar and battery storage with a price of 3.06 cents a kWh.
“Pricing is provided on an ‘as-bid’ basis and does not include other costs such as resource integration costs, additional transmission network upgrade costs for interconnection or deliverability, or credits for items like quick-start capability; that is, these are not based on ‘all-in’ costs,” Xcel said in its report. “Bid ranking for purposes of computer-based modeling will be conducted on all-in costs.”
Xcel declined further comment saying the proposals are under evaluation.
Among the outside issues that may affect that evaluation are the impact of the new federal tax law and a pending trade case that could lead to tariffs or quotas on imported PV cells, which would raise the price of solar projects.
