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Los Angeles seeks record sub-two cent solar power price

The city’s municipal utility is readying a 25-year power purchase agreement for 200 MWac of solar at $0.01997/kWh along with 100 MW/400 MWh of energy storage at $0.013/kWh.

From pv magazine USA.

The Los Angeles Department of Water and Power’s (LADWP) board of commissioners was presented with the Eland Solar & Storage Center in Kern County, California, from a LADWP internal team on June 18.

The team told the commissioners, on July 23 it plans to seek approval for a 25 year power purchase agreement (PPA) priced at $0.01997/kWh for 200 MWac/265 MWdc of solar electricity delivered at time of generation plus $0.013/kWh for excess electricity delivered later from a co-located 100 MW/400 MWh storage system. Whether there is a price escalator is unknown at this point – prior agreements between LADWP and developer 8minute Solar Energy have included an escalator – but either way it would mark a record low price for the United States.

When compared to the current U.S. price leader – 8minute’s  $0.02375/kWh at the 300 MW Eagle Shadow Mountain solar project – the Eland project would need a price escalator at or below 1.75% (according to Google Sheets) to have an equal average price. It seems likely the new project, if signed, will be the lowest priced in the United States and LADWP has already said as much in a video and slide presentation after being tipped off, probably by 8minute, the deal would signal a new record.

The project includes the option to add 50 MW/200 MWh of storage for an additional adder of $0.00665/kWh. It was suggested the excess electricity would be used during the evening peak to ease ramping though one presenter also said the morning peak was as important to consider.

The Kern County website holds thousands of pages of development documents – mostly related to environmental analysis – with some describing the installation itself. The project will be built among more than 1 GWac of solar facilities, including others developed by 8minute. The site documents state there is more than 500 MWac of capacity available on various pieces of land in the Eland development proposal, meaning the site will probably expand as more PPAs are signed.

The current world record solar power price was signed in Mexico at $0.0197/kWh, as part of a batch of projects averaging just over $0.02. While a lower bid was submitted in Saudi Arabia, at $0.0179/kWh, it was overlooked in favor of an higher bid from a Saudi developer.

A LADWP representative noted there were probably seven or so other projects on the shortlist the utility is in advanced negotiations with.

The Eland project is expected to receive a note to proceed with construction in 2022, with its first installed capacity set to deliver in April 2023, and a guaranteed commercial operation date of the last day of that year. The presenting team noted the project would represent around 5% of the LADWP renewable portfolio standard goal (see image below) of sourcing 100% clean electricity by 2050.

Using Helioscope (pdf), and data from the Kern County documents, pv magazine USA did a rough simulation of a single 2 MW section of the project, with 2.65 MW of modules attached using single axis trackers. The aim was to determine the volume of electricity that could be captured from clipping if a 1 MW/4 MWh battery was behind the layout considered.

Note that in the image below, from the simulation, there would be approximately 2.7% clipping loss over a year, equal to around 6.5 GWh/year – a figure referred to as ‘constrained DC output’ in the chart below. A 1 MW/4 MWh battery that cycles once a day for a year could move 1.4 GWh/year – around 4.5 less than would potentially be clipped in this 1/100th design.

At $0.013/kWh, that would generate $85,000 per year. If hardware costs for energy storage installed in 2022-2023 are around $100-200 kWh, a 4 MWh unit would cost around $4-8 million

Since the units would only be able to cycle once per day with excess solar power, they could also be performing other tasks in periods outside the charging-discharging period. The presenters noted the morning electricity ramp needs support too, so there could be other services the project delivers to LADWP.

Source: pv magazine