NV Energy 2.3-cent solar contract could set new price record

Source: By Gavin Bade, Utility Dive • Posted: Monday, June 18, 2018

  • A new solar energy contract proposed by NV Energy could set a price record for the resource in the United States, researchers say.
  • On June 1, NV Energy filed for approval of a 300 MW power purchase agreement with the Eagle Shadow Mountain solar project at $23.76/MWh for 25 years. That price beats a $24.99/MWh contract signed this month in Arizona that GTM Research says was the lowest-cost solar contract in the nation.
  • Eagle Shadow is part of an NV Energy proposal to add 1 GW of renewables and 100 MW / 400 MWh of energy storage. That plan must still be approved by regulators and is contingent on Nevada voters not approving a retail choice ballot initiative.

Determining the true low cost champion in solar contracts is a difficult task, Greentech Media notes. Some contracts include ambiguous pricing details and others have cost escalators, like Sempra Renewables’ Copper Mountain Solar 5 project, also part of NV Energy’s latest proposal.

Copper Mountain’s PPA comes in at $21.55/MWh, but it has a 2.5% annual cost escalator​. Eagle Shadow’s contract, by contrast, is steady throughout its 25-year term. The company was able to offer the low price in part because it is utilizing existing grid infrastructure from a nearby shuttered coal plant.

The PPAs are two of six NV Energy submitted to regulators for approval at the beginning of the month, all of which netted contracts under $30/MWh.

NV Energy’s capacity pricing makes a direct comparison with other solar-plus-storage contracts difficult, but the Nevada projects appear competitive.

A recent Xcel Energy solicitation in Colorado returned standalone storage projects with capacity payments of more than $11,000/MW-month, but Greentech notes that the Nevada projects will enjoy cost savings because they are paired with solar projects.

In addition to the solar PPAs, NV Energy also proposed to retire the 127 MW unit 1 of the North Valmy coal plant by 2021, instead of 2025. Previous analysis by environmental groups argued that replacing the plant with renewable energy could save customers money.

Both the coal retirement and solar PPAs could fall apart if voters approve a ballot initiative to open the state to retail electricity competition this November. If that happens, the utility has said it will not develop any more renewable energy than it is required to by law.