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Finding DG ValueBefore it Finds You
John Farrell, Senior Researcher
Presentation 11/11/12 to FERC/NARUC Smart Response Collaborative
Disconnect
20 MW
4400 MW
Minnesota IOU solar plan for 2025
Res. and Comm. solar at retail price parity by 2022
-20¢
-15¢
-10¢
-5¢
0¢
5¢
10¢
Cost of solar Energy value Grid benefits Social benefits
4¢
$4/Watt
How the utility values distributed
generation
•prevent blackouts•reduce pollution•create jobs•on-site/near demand•lower transmission losses•reduce dist. system stress•hedge against fuel prices•avoided cost
0¢
-20¢
Solar Power Generation in the US: Too expensive, or a bargain? - http://tinyurl.com/3tqmerh
traditionally
^
“lev
eliz
ed c
ost”
ove
r 25
yrs
.
-20¢
-15¢
-10¢
-5¢
0¢
5¢
10¢
Cost of solar Energy value Grid benefits Social benefits
4¢
0¢
-20¢
8.5¢ But it’s worth more
•prevent blackouts•reduce pollution•create jobs•on-site/near demand•lower transmission losses•reduce dist. system stress•hedge against fuel prices•avoided cost
Solar Power Generation in the US: Too expensive, or a bargain? - http://tinyurl.com/3tqmerh
-20¢
-15¢
-10¢
-5¢
0¢
5¢
10¢
Cost of solar Energy value Grid benefits Social benefits
4¢
Solar Power Generation in the US: Too expensive, or a bargain? - http://tinyurl.com/3tqmerh
0¢
-20¢
and more
8.5¢
12.4¢
•prevent blackouts•reduce pollution•create jobs•on-site/near demand•lower transmission losses•reduce dist. system stress•hedge against fuel prices•avoided cost
0¢
1¢
2¢
3¢
1 3 5 7 9 11 13 15 17 19 21 23 25Years
Business As Usual
Savings if utilities embrace DG or stranded costs if utilities persist in large-scale transmission build-out while DG happens anyway.
Current TAC Depreciation + O&M
$80 billion
Transmission Access Costs
0¢
3¢
6¢
9¢
12¢
EnergyGen. capacityEnvironmentT&D DeferralLoss SavingsDisaster Recovery
Austin Energy Value of Solar Tariff
10.8¢
(per kWh)
Source: The Value of Distributed Photovoltaics to Austin Energy and the City of Austin
Utilities value DG
0¢
3¢
6¢
9¢
12¢
15¢
18¢
2006 2007 2008 2009 2010 2011
Austin Energy Value of Solar Tariff
Source: The Value of Distributed Photovoltaics to Austin Energy and the City of Austin
12.8¢
(per kWh)
Utilities value DG
6¢ per kWh in addition to
electricity
$0
$0.03
$0.06
$0.09
$0.12
$0.15
Brown energy replacementAvoided transmission lossesEnvironmental (RPS compliance)Avoided transmission accessLocal capacity value
Feed-In Tariff for PV in Palo Alto, Calif. Imminent: http://tinyurl.com/72sxgsb
}7¢
Palo Alto, CA, CLEAN Program
Utilities value DG
Total Ratepayer Cost of Solar
0¢
3¢
6¢
9¢
12¢
15¢
100kWroof
500kWroof
1 MWroof
1 MW ground
5 MW ground
50 MW ground
Required contract priceT&D costs
Distribution Grid T-GridSources: CAISO, CEC, and Clean Coalition, July 2011; see full analysis at www.clean-coalition.org/studies
per kWh
DG solar sweet spot
Distributed solar is happening by big companies and thousands of homeowners
30%
It’s launching distributed storage too - 30% of San Diego EV owners
have solar
Distributed Solar Potential at Parity by 2022(residential and commercial MW)
8500
590
750
30,000
16,000
7200
11,000
1800
990
360012,000
780
7000
8200
510011,000
190026,0002400
7300
5100
360
26001100
1200
800
14004800
1800
32,000
5000
580
970
2300
4100
4400
2900
7200
6800
2800
7100
11,000
11,000
550010,000
12,000
20
1140700
4000
Percent of Sales1-5%5-10%10% or more
Get Ready!