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For those not obsessed with Snowden, Zimmerman, the Immigration bill, the Ag Bill
or the 2014 election, I thought I would mention something interesting.

The city of Palo Alto is signing long term Solar PV contract prices for power at 7 cents/KWH.
Now the national average price for electricity is usually 12 cents/KWH and in california it's
averaging 15 cents/KWH.

Let's get into the details after the jump....

The City of Palo Alto has approved a long term solar energy purchase that will provide 18% of its electricity at the very low price of 6.9 cents per kilowatt hour!

Its municipal utility will buy 80 megawatts (MW) of solar from several solar plants under a 30-year power purchase agreement.

The price is competitive with natural gas and wind and cheaper than they could get from a new nuclear or coal plant.

The city will buy the electricity from three solar plants, all sited on distressed agricultural land and all coming online in 2017.

When that happens, Palo Alto will get a full 50% of its energy from renewables.


lets get this straight.

Palo Alto is buying half the electricity the city needs, on a long term power purchase
agreement, cheaper then coal, nuclear and competitive with gas.  

This is a very interesting change of status and we should be seeing in a few years,
most large organizations switching to Solar for cheap power.

Originally posted to patbahn on Tue Jun 25, 2013 at 08:10 AM PDT.

Also republished by Kosowatt.

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Comment Preferences

  •  5.6 cents for wind here (9+ / 0-)

    My town signed an aggregate rate contract with wind farms in IL, and we're getting 5.6 c per kWh. Good to see solar in the same ballpark now.

    •  $0.027 per kWh for hydro here (retail) (1+ / 0-)
      Recommended by:
      Norm in Chicago

      and it's publicly-owned. There's a lot of wind generation in WA and OR, but I don't know how they price it.

      But 7 cents for solar is very good. I believe that's about what our public utility district wholesales power for into the grid.

      No matter how cynical you become, it's never enough to keep up - Lily Tomlin

      by badger on Tue Jun 25, 2013 at 10:00:34 AM PDT

      [ Parent ]

  •  Palo Alto has a lot of roof space (4+ / 0-)

    I hope most new solar there is being put on existing rooftops rather than chewing up open land.

  •  Thanks for this encouraging post patbahn. (5+ / 0-)
    Recommended by:
    Lawrence, JeffW, Jim P, afisher, marsanges

    Reposted to Kosowatt.  

    The means is the ends in the process of becoming. - Mahatma Gandhi

    by HoundDog on Tue Jun 25, 2013 at 08:21:51 AM PDT

  •  I'm not surprised. Solar power is on its way to (8+ / 0-)

    becoming as cheap as wind, which is currently the cheapest.

    The price of solar power has dropped so fast that anyone still using 2 or 3 year old data when arguing energy issues is now a dinosaur.

    Tipped and recced.

    "A candle loses nothing by lighting another candle" - Mohammed Nabbous, R.I.P.

    by Lawrence on Tue Jun 25, 2013 at 08:26:37 AM PDT

  •  Palo Alto is just a bunch of (5+ / 0-)
    Recommended by:
    litho, JeffW, StrayCat, cocinero, Tinfoil Hat

    wild eyed , pot smoking , believe in anything , dirt worshiping , nuke hating , revolted by science , can't do math ...

    Tech moguls call Palo Alto home, too—Apple CEO Tim Cook, Google CEO Larry Page, and Facebook CEO Mark Zuckerberg all live there.

    The standard you walk past is the standard you accept. David Morrison

    by indycam on Tue Jun 25, 2013 at 08:28:10 AM PDT

  •  Centralized power is not the way (5+ / 0-)

    While this is great and it will encourage more companies to get into the solar power business, it is only part of the solution.  Centralized power be it from wind, coal or solar still as two major problems, first the grid which needs to be updated and the fact that power is coming from a single location, if anything happens to that location everyone is SOL.  The other end of the solution which is such an easy fix that no body wants to address is the distributed power generation.  All that needs to be done is a simple change to the building code requiring all new home construction to have homes produce a certain percentage of their own power.  By each home producing their own clean power, it would save the consumer money (good for the economy), it would reduce the strain on the grid and prolong it's life and if enough power is generated at home you could shut down our dirtier power generation plants

  •  suggest you dig a little deeper, (0+ / 0-)

    especially looking at the natural gas "backup" to be installed by the contracting company.

    I suspect that you'll find that the majority of the power delivered under this contract will come from the "backup" generators, at substantial profit to the contracting company (natural gas generated electricity is currently coming in at around 4 cents/kwh).

    Fake Left, Drive Right . . . not my idea of a Democrat . . .

    by Deward Hastings on Tue Jun 25, 2013 at 08:57:15 AM PDT

    •  you are welcome (0+ / 0-)

      to do the research.

    •  your accusation has in it's core a dangerous (1+ / 0-)
      Recommended by:

      business assumption..

      I suspect that you'll find that the majority of the power delivered under this contract will come from the "backup" generators, at substantial profit to the contracting company (natural gas generated electricity is currently coming in at around 4 cents/kwh).
      Let us assume, what you propose is actually true.

      This is an 80 MW long term Power purchase agreement.
      I'm assuming it's 80 MW of electricity during peak hours
      so 10-6 Monday-Friday, 52 Weeks a year.

      So, best available solar power installs on commercial is about $2.50/watt, so they install $200 million of PV upfront,

      then natural gas peakers are around

      Natural gas-fired peaking power plants are around $6 a watt.[6]
      Add in the 30 year price of natural gas has been all over the map.

      What that is is a tremendous variation in price that is locked in against a 30 year PPA, seems like a really crappy bet.

      increase the CAPEX 50%, lock in a 30 year put on electricity
      and need to option now 30 years of gas plus buy 30 years of gas.

      Can you really show me in simple words, how that's a good bet?

      Or are you just making up weird accusations, because you
      don't like solar?

      •  you can "assume" (0+ / 0-)

        whatever you want to "assume", to make whatever argument you want to make.  And readers can be fooled if they want to be.

        You don't seem interested in exploring what will actually keep the lights on in Palo Alto.  I have no interest in speculating why that is.

        Fake Left, Drive Right . . . not my idea of a Democrat . . .

        by Deward Hastings on Tue Jun 25, 2013 at 11:54:09 AM PDT

        [ Parent ]

        •  Details, please? You could both be right. (2+ / 0-)
          Recommended by:
          Sparhawk, Deward Hastings

          I'm just an interested reader looking for info.

          D.H. is fairly clearly saying (a) the solar power provider has a natural-gas backup; (b) the gas backup will likely provide most of the power; (c) the city could've just bought gas power labeled as gas power and saved money.

          Patbahn...I'm sorry, but I'm not a financial analyst and I'm having trouble following your jargon-filled reply. I get that you don't think D.H.'s point makes financial sense, but I don't get why.

          My own 2 cents:

          1. The price of solar is likely to fall over 30 years. By making a 30-year commitment, the city is taking a long-term risk of overpaying in order to (a) save money in the short term (which may or may not happen, depending on whether D.H. is right), and (b) jump-start solar power for the greater good.

          2. Even if D.H. is right in the short term, the price of natural gas is likely also subject to long-term fluctuation, especially if greenhouse emissions get restricted or priced sometime in the next 30 years. By purchasing a 30-year bundle of mixed gas-solar power, the city is hedging its bets--diversifying to mitigate risk. The city will neither reap all the rewards of the more efficient 30-year power source, or suffer all the costs of the less efficient 30-year source. The city is acknowledging that it's impossible to know which source will be cheaper over the next 30 years. If that's what's happening, it seems reasonable.

          "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

          by HeyMikey on Tue Jun 25, 2013 at 12:10:37 PM PDT

          [ Parent ]

          •  you basically captured it. (1+ / 0-)
            Recommended by:

            See DH is proposing that this Solar system will actually have a Natural gas turbine behind it that will provide the power.

            My discussion of CAPEX is Capital Expenditure.
            you buy solar systems soup to nuts for about $2.50/watt
            installed (Large Commercial).  You buy gas turbine
            peakers for about $6/watt.  Now to commit to contracts
            in Solar PV, you typically have to overprovision in solar,
            about 3X if you want to maintain absolute grid stability,
            but it's about a wash between the Solar PV and the gas turbine, you only save $1.50 per watt multiplied by a
            yield function which is kind of complicated.

            What's worse is you face tremendous fluctuation in gas
            prices.  Gas gets pricey at times. Plus when the system is
            running you pay a ton to run those.  

            Gas is cheap right now, but against a 30 year contract?
            the fluctuations are crazy.

        •  lets quote your words (0+ / 0-)
          I suspect that you'll find that the majority of the power delivered under this contract will come from the "backup" generators, at substantial profit to the contracting company (natural gas generated electricity is currently coming in at around 4 cents/kwh).

          Now you don't actually show any data, you
          don't actually cite anything, and you appear to
          be making an accusation that this is a scam
          hidden behind a large capital investment
          and tied to a 30 year contract.

          I showed how to pull off your suspicious activity
          it requires a 50% additional CAPEX and ties to a 30 year
          power price with risk factors all over the place.

          and you refuse to cite a single fact, element, link, anything for your suspicions.


          Do you have any evidence?

      •  He's just making up weird, unsubstantiated (1+ / 0-)
        Recommended by:

        allegations and completely ignoring that solar currently cuts into peak power, ie. needs no peakers at this time, and that electricity storage is coming around real fast and will likely see a drop in cost similar to the drop in cost that solar power has gone through.

        You see these kinds of contortions in logic a lot from the strongly pro-nuke crowd.

        Don't let it bother you.

        "A candle loses nothing by lighting another candle" - Mohammed Nabbous, R.I.P.

        by Lawrence on Tue Jun 25, 2013 at 03:27:22 PM PDT

        [ Parent ]

  •  Between 10 am and 3pm.... (0+ / 0-)

    that's when solar will be delivered. Period. EVERYTHING outside of this period is not solar. It's about 88% gas, 15% hydro (if it's summer time) and 7% nuclear.

    Go to the CALISO web site and look at the historic Bay Area peaks:

    Today it's at 1700 hours, or 5pm. Solar is about 10% of it's noon peak (I think solar peak on the Coast is 12:30pm). So actual demand is way higher than what solar can possibly supply.

    Solar is not the reason nuclear is not doing as well (in the US). That's a huge, and different discussion. Nuclear provides power around the clock, solar does not, especially solar PV. Completely different products. Same with wind. You can't get around needing base load power (minimum 24hour power). The only base load sources are hydro (seasonally), gas (conventional and gas turbine), coal, and nuclear (and, in some places, oil).

    Dr. Isaac Asimov: "The most exciting phrase to hear in science, the one that heralds new discoveries, is not 'Eureka!' but 'That's funny ...'"

    by davidwalters on Thu Jun 27, 2013 at 07:48:19 AM PDT

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