Distributed Energy Resources

NV Energy solar PPAs include prices below $30/MWh

NV Energy in a joint filing for its Nevada Power and Sierra Pacific Power subsidiaries is seeking approval of six solar power purchase agreements with some of the lowest prices seen to date.

All six PPAs have prices below $30/MWh, and one, Sempra Renewables’ proposed 250-MW Copper Mountain PV farm near Boulder City, starts at $21.55/MWh with a 2.5% annual escalation over the 25-year term of the contract.

The next lowest price is for 8minuteenergy’s 300-MW Eagle Shadow Mountain solar farm on the Moapa Indian Reservation in Clark County, which has a PPA price of $23.76/MWh.

A third project proposed for Nevada Power is the 50-MW Techren V solar plant proposed by 174 Power Global, a subsidiary of Hanwha Group of South Korea.

The project, sited in Boulder City, would sell power at $29.89/MWh with no escalation.

The other three proposed solar projects would sell their output to Sierra Pacific and all include energy storage capability. The largest is NextEra Energy’s 200-MW Dodge Flat solar plant in Wadsworth that includes a 50-MW, 200 MWh battery storage system.

The project would sell power at $27.51/MWh or at $26.51/MWh, if another NextEra project is approved, the 100 MW Fish Springs Ranch solar farm near Pyramid Lake with 25 MW, 100 MWh of storage.

The sixth project is Cypress Creek’s 101-MW Battle Mountain Solar project in Humboldt County that includes 25-MW, 100 MWh of storage. The PPA carries a flat price of $26.50/MWh.

The three solar-plus-storage projects also would receive capacity payments, which range from $6,100/MW-month for Dodge Flat to $7,755/MW-month for Battle Mountain.

Five of the projects would enter service in 2021. Techren V would enter service at the end of 2020.

The solar-plus-storage projects are designed to make up for the gap left by NV Energy’s proposed early retirement of the 127-MW North Valmy 1 coal-fired plant by Dec. 31, 2021. That decision, which is part of NV Energy’s filing, “cannot be made lightly,” the company said in the filing, noting that the capacity from North Valmy is critical in the mining-heavy north Nevada region.

The other driver behind the PPAs for which Sierra Pacific is seeking approval is that by 2021 the utility will have drawn down the credits it needs to meet its renewable portfolio standard targets to near zero. Sierra Pacific is seeking approval of more than would actually be required to fill that need in order safeguard its ability to meet any potential changes to the RPS in the future.

The renewable PPAs are part of NV Energy’s preferred low carbon plan and one of four plans the company tested over a range of scenarios. NV Energy said the low carbon plan would cost an estimated $2.175 billion and result in only 0.5% of Nevada’s power coming from coal-fired generation while 332% would come from renewables.

NV Energy added, however, that implementation of its low carbon plan is dependent on voters turning down Question 3 in the November election. A “yes” vote on the Question 3 ballot initiative supports an amendment to Nevada’s constitution that would establish an open, competitive retail electric energy market and prohibit energy monopolies.

Prices for renewable power have been dropping rapidly in recent months, especially in western states.

Earlier this month, the Central Arizona Project, a water supply agency, signed a 20-year PPA with AZ Solar 1 at $24.99/MWh.

And in January, Xcel Energy made headlines with reports that a solicitation for solar-plus-storage projects attracted a median price of $36/MWh.