Distributed Energy Resources

SCPPA inks 25-year PPA for solar project that includes storage

Southern California Public Power Authority has signed a 25-year power purchase agreement with EDF Renewables for the energy and renewable attributes of a 70-megawatt solar photovoltaic project paired with an energy storage facility in Riverside County, California.

The Desert Harvest II is designed not only to produce renewable energy but to minimize the strain it puts on the grid. In particular, EDF Renewables said it structured the project to address challenges associated with California’s “duck curve” and to shelter the buyer from exposure to volatile merchant power prices.

The duck curve refers to the mid-day spike in power generation from solar power that drops off as the sun sets and needs to be replaced by peaking plants in the evening.

To protect the buyers from exposure to merchant power prices, EDF Renewables used a “Renewable Energy Credit (REC) + Index structure” for the power purchase agreement under which SCPPA pays a fixed price for the RECs and an indexed price for the energy from the project. The marker to which the price is indexed is confidential, Valerie Barros, senior power marketer at EDF Renewables, said.

EDF Renewables, in turn, is protecting itself from volatile power prices by entering into a hedging agreement with Morgan Stanley Capital Group, under which EDF Renewables will pay a fixed price for energy.

The project also includes a 35 MW, 4-hour energy storage system that EDF Renewables will use to manage the risks to the project associated with the REC + Index structure, Barros said.

The PPA structure and the energy storage facility are both the responsibility of and will be operated for the benefit of the EDF Renewables, which means that the project, not SCPPA, will receive the benefit and assume the risks related to the hedge and the storage facility.

The project is expected to begin delivering electricity to SCPPA’s participating members, Anaheim, Burbank, and Vernon, starting in 2020. The solar project is sited on unincorporated land in Riverside County administered by the Federal Bureau of Land Management.

The BLM has designated the area as a Solar Energy Zone and a Development Focus Area for utility-scale renewable energy development. The solar project will use horizontal single-axis tracking solar photovoltaic technology.

The Desert Harvest II project is EDF Renewables’ second collaboration with SCPPA. EDF Renewables developed the Linden Wind Farm in Goldendale, Washington, for SCPPA. The 50-MW wind plant provides electricity to SCPPA on behalf of its participating members Los Angeles Department of Water and Power and the City of Glendale.

EDF Renewables, an affiliate of French national utility Electricite de France, sold the Linden project to SCPPA in 2009, and the project entered service in June 2010.