Released February 10, 2014 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Georgia Power Company (Atlanta, Georgia), a subsidiary of Southern Company (NYSE:SO) (Atlanta), wants to add up to 495 megawatts (MW) of utility-scale photovoltaic (PV) power generation to its portfolio.
In a draft request for proposal (RFP) issued at the end of December, the utility said it wants to procure the new generation under two programs. One program, the Georgia Power's Advanced Solar Initiative (GPASI), will add up to 70 MW of new PV generation in installations of between 1 MW and 20 MW. Projects selected for this program must be operating by year-end 2015.
Under a second program, GPASI-Prime, Georgia Power wants to procure up to 425 MW of new PV generation. The utility wants 210 MW of this tranche operating by year-end 2015, and the remaining 215 MW operating by the end of 2016. The generation in this program can range from 1 to 210 MW for units coming online by year-end 2015. Units coming online in 2016 can range from 1 to 215 MW.
PV generation for both programs must be located in Georgia and may not be part of a net-metering program. The 425 MW of PV generation in the GPASI-Prime program is part of the 525 MW of new solar generation ordered by the Georgia Public Service Commission (GPSC) (Atlanta, Georgia) in its ruling on Georgia Power's integrated resource plan last year.
Georgia Power is using a multi-stage bidding process: It issued a draft RFP last December, and is currently considering comments from bidders. A final RFP will be issued February 24, and responses are due March 24. The utility expects to begin negotiating with firms on its short list this summer. Accion Group Incorporated (Concord, New Hampshire) is Georgia Power's independent evaluator for the bids.
Approximately 160 bidders attended an onsite briefing at utility's Atlanta headquarters January 13, and another 110 attended via conference call, Georgia Power spokesman John Kraft told Industrial Info.
Georgia Power said the RFP will continue to advance its goal of encouraging new opportunities for solar development in the state of Georgia as well as the utility's commitment to a diverse fuel mix. In its draft RFP, the utility said it wants to add renewable resources to its generation portfolio "when that generation is proven to be safe and economic for customers."
"There is rising interest in solar power from our customers, our regulators and our executives," Kraft said in an interview. "As we have gone to the market for new solar generation, we have seen successively larger-scale projects. Solar has a definite place in our generation portfolio. It's another arrow in our quiver, along with nuclear, natural gas, coal and energy efficiency. We want to get the best value for our customers. We see competitive forces bringing good value to customers."
By the end of 2016, Georgia Power will have nearly 800 MW of solar capacity under contract, he noted, which is "the largest voluntary solar portfolio of an investor-owned utility operating without a renewable portfolio standard (RPS), and one of the largest in the nation."
"We have worked hard to design solar programs that don't put upward pressure on customer rates," Kraft said. "Philosophically, we don't want to put upward pressure on our customers' rates."
As part of its effort to hold the line on solar costs, the draft RFP specified that the 425 MW of PV generation procured under the GPASI-Prime initiative shall not exceed Georgia Power's projected levelized avoided costs for the duration of the 20-year power purchase agreement (PPA). In a prior bid for solar generation, the utility placed a levelized avoided cost cap of $120 per megawatt-hour (MWh), or 12 cents per kilowatt-hour (kWh), for PV generation. It said it received a "robust response" to that solicitation, "which included multiple bids significantly under the established not-to-exceed price cap of $120/MWh."
"As evidenced by this robust response, and with the continued expectation that the company will continue to receive highly competitive bids from the market, this (December 2013) RFP does not include an explicit not-to-exceed price cap," the RFP continued. The utility said it "feels confident that sufficient bids will be received to fulfill the 2015 ASI-Prime portfolio with very competitively priced utility-scale projects that will not exceed that established price."
Subsequently, in response to a question from a potential bidder, Georgia Power said its average levelized avoided costs were $85 per MWh, or 8.5 cents per kWh, for solar power procured under the prior solicitation.
Kraft was unable to say whether Georgia Power had a preference for owning the new PV generation or contracting for it through the PPA. "The company is evaluating it and will make a decision based on the best interests of our customers," he said.
Georgia Power is not under a state mandate to have renewable energy account for a set portion of its electricity. But the utility has been under pressure to more rapidly increase its portfolio of renewable electric generation. For more on this issue, see June 13, 2013, article -- Georgia Power Greens Generation Portfolio, but Hears Louder Calls for Solar.
"We support cost-effective solar generation in Georgia," Kraft told Industrial Info. "Without a legislative mandate or change in law, Georgia has one of the fastest growing solar markets in the nation, (worth) an estimated $1.7 billion (in) investment (value)."
"We are retiring a large amount of generation for a variety of reasons," Kraft continued. "A good bit of that is coal-fired generation. But typically, solar power won't offset base-load coal-fired generation. Nature decides when solar power will produce electricity. We see solar power as augmenting our generation fleet."
Brock Ramey, Industrial Info's Manager of North American Power Research, said: "The cost of PV modules has declined sharply in recent years, and a federal Investment Tax Credit (ITC) for solar power is in effect through the end of 2016. The combination of declining materials costs, increasing supply-chain sophistication, better construction and operation techniques and federal aid should help developers put together very competitive bids."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
In a draft request for proposal (RFP) issued at the end of December, the utility said it wants to procure the new generation under two programs. One program, the Georgia Power's Advanced Solar Initiative (GPASI), will add up to 70 MW of new PV generation in installations of between 1 MW and 20 MW. Projects selected for this program must be operating by year-end 2015.
Under a second program, GPASI-Prime, Georgia Power wants to procure up to 425 MW of new PV generation. The utility wants 210 MW of this tranche operating by year-end 2015, and the remaining 215 MW operating by the end of 2016. The generation in this program can range from 1 to 210 MW for units coming online by year-end 2015. Units coming online in 2016 can range from 1 to 215 MW.
PV generation for both programs must be located in Georgia and may not be part of a net-metering program. The 425 MW of PV generation in the GPASI-Prime program is part of the 525 MW of new solar generation ordered by the Georgia Public Service Commission (GPSC) (Atlanta, Georgia) in its ruling on Georgia Power's integrated resource plan last year.
Georgia Power is using a multi-stage bidding process: It issued a draft RFP last December, and is currently considering comments from bidders. A final RFP will be issued February 24, and responses are due March 24. The utility expects to begin negotiating with firms on its short list this summer. Accion Group Incorporated (Concord, New Hampshire) is Georgia Power's independent evaluator for the bids.
Approximately 160 bidders attended an onsite briefing at utility's Atlanta headquarters January 13, and another 110 attended via conference call, Georgia Power spokesman John Kraft told Industrial Info.
Georgia Power said the RFP will continue to advance its goal of encouraging new opportunities for solar development in the state of Georgia as well as the utility's commitment to a diverse fuel mix. In its draft RFP, the utility said it wants to add renewable resources to its generation portfolio "when that generation is proven to be safe and economic for customers."
"There is rising interest in solar power from our customers, our regulators and our executives," Kraft said in an interview. "As we have gone to the market for new solar generation, we have seen successively larger-scale projects. Solar has a definite place in our generation portfolio. It's another arrow in our quiver, along with nuclear, natural gas, coal and energy efficiency. We want to get the best value for our customers. We see competitive forces bringing good value to customers."
By the end of 2016, Georgia Power will have nearly 800 MW of solar capacity under contract, he noted, which is "the largest voluntary solar portfolio of an investor-owned utility operating without a renewable portfolio standard (RPS), and one of the largest in the nation."
"We have worked hard to design solar programs that don't put upward pressure on customer rates," Kraft said. "Philosophically, we don't want to put upward pressure on our customers' rates."
As part of its effort to hold the line on solar costs, the draft RFP specified that the 425 MW of PV generation procured under the GPASI-Prime initiative shall not exceed Georgia Power's projected levelized avoided costs for the duration of the 20-year power purchase agreement (PPA). In a prior bid for solar generation, the utility placed a levelized avoided cost cap of $120 per megawatt-hour (MWh), or 12 cents per kilowatt-hour (kWh), for PV generation. It said it received a "robust response" to that solicitation, "which included multiple bids significantly under the established not-to-exceed price cap of $120/MWh."
"As evidenced by this robust response, and with the continued expectation that the company will continue to receive highly competitive bids from the market, this (December 2013) RFP does not include an explicit not-to-exceed price cap," the RFP continued. The utility said it "feels confident that sufficient bids will be received to fulfill the 2015 ASI-Prime portfolio with very competitively priced utility-scale projects that will not exceed that established price."
Subsequently, in response to a question from a potential bidder, Georgia Power said its average levelized avoided costs were $85 per MWh, or 8.5 cents per kWh, for solar power procured under the prior solicitation.
Kraft was unable to say whether Georgia Power had a preference for owning the new PV generation or contracting for it through the PPA. "The company is evaluating it and will make a decision based on the best interests of our customers," he said.
Georgia Power is not under a state mandate to have renewable energy account for a set portion of its electricity. But the utility has been under pressure to more rapidly increase its portfolio of renewable electric generation. For more on this issue, see June 13, 2013, article -- Georgia Power Greens Generation Portfolio, but Hears Louder Calls for Solar.
"We support cost-effective solar generation in Georgia," Kraft told Industrial Info. "Without a legislative mandate or change in law, Georgia has one of the fastest growing solar markets in the nation, (worth) an estimated $1.7 billion (in) investment (value)."
"We are retiring a large amount of generation for a variety of reasons," Kraft continued. "A good bit of that is coal-fired generation. But typically, solar power won't offset base-load coal-fired generation. Nature decides when solar power will produce electricity. We see solar power as augmenting our generation fleet."
Brock Ramey, Industrial Info's Manager of North American Power Research, said: "The cost of PV modules has declined sharply in recent years, and a federal Investment Tax Credit (ITC) for solar power is in effect through the end of 2016. The combination of declining materials costs, increasing supply-chain sophistication, better construction and operation techniques and federal aid should help developers put together very competitive bids."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
