Posted by: jbarnesca | April 13, 2010

Maximum Bid PPA Price for SCE SPVP Program

The recent 2010 Solar PV RFO conference for the SCE solar roof program(SPVP) at the LA airport went into some good detail about many aspects of the process for prospective IPP bidders.  Among the useful information was their interpretation of the CPUC ruling for the maximum price that the IPP bidders are allowed to place offers in this “reverse auction” style process.

SCE was awarded a compensation of $0.26/Kwh for the energy that the can produce for their owned rooftop programs, with little fanfare in formal legal “protest”  letters filed to the CPUC.

So SCE made their interpretation of this for the IPP bidders to be as follows:

  • Take the $0.26/Kwh payment to them and divide by a factor of 1.35 to estimate the effect of a typical PV rooftop installation in their territory for the TOU payment.
  • Thus the maximum rate that can be bid is $0.1925/Kwh times the TOU schedule.

Any of these payments using the TOU schedule show that you need to maximize your payments in the late afternoon in the summer time.  If your solar installion does a great job of this, you can end up getting more than the projects with poor time of usage solar energy generation.

Also, it was my impression that SCE expects to be oversubscribed a lot in this solicitation round and that the winners would be in the $0.14/Kwh range.  Maybe they were just trying to scare bidders.  Later SCE connection approval people stated that there were over 160 projects in the connection queue already, and without that approval you will miss the deadline for the program.

All and all a useful meeting to attend in LA.

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Responses

  1. Thanks for providing some insight into a “reverse auction” process that looks rather opaque to an outside observer. I look forward to your updates as this pricing experiment develops.

    • Great information, John. What PPA prices are you seeing for larger scale solar projects with SCE (e.g., 250 MW).

      Karen

      • Karen, Since this is a secret RPS solicitation agreement number, I don’t want to be quoted on this number from the recent RPS solicitation wins.

        Regards, John Barnes Solar Power Development Partners 408-813-2683 http://www.solarpowerdp.com

  2. Sorry, I meant for my question to be from a more generic perspective and not specific to a particular procurement.

    Karen

    • For a RPS solicitation the Utilities are expected to reach an agreement with the solar farm owner for a PPA rate “close” to the MPR (market price referral) price for that year; however a time of use (TOU) adder can be applied. They are also allowed a “overage fund” to go over that rate for some bids.

      Enough said, so they would make the deals in the range of $0.10/kWh with a TOU adder. They can make the deal nicer with the overage fund. This shows you why the deals are made, but construction is delayed until the costs drop to make this not such a losing lousy IRR proposition.

      I believe the details of the PPA RPS deal are then posted THREE years after the deal, so we have yet to see the details of the major projects agreed to in the last few years for solar farms by SCE and PG&E.

      The reverse auction PG&E 250MW program IPP winners are expected to win at a rate around $0.13/kWh with a TOU adder.

      Regards, John Barnes Solar Power Development Partners 408-813-2683 http://www.solarpowerdp.com

  3. […] the Large and Small PV PPAs. Although contract price bids cannot exceed $246/MWh ($0.246/kWh), a “Maximum Bid PPA Price for SCE SPVP Program” comment at the The Solar CA Blog of John Barnes said: The reverse auction PG&E 250MW program […]

  4. This solicitation request 4-bidding price, under different curtailment option. The $0.13/Kwh, are you referring to the initial bid price? not the LCOE

  5. Hi John, what should be the estimated installed cost per DC watt in order to go in for a bid below the weighted average of $0.1925/kwh. For bidding, I am sure lower is better> However, what would be the cost should be so as to sell the power for $0.1925/wkh as breaking even.

    • Hello Michael,
      Sorry I did not see your post until just now.
      First of all I am reluctant to give out such real numbers from best in class groups: however, I do want to comment that to be a winning bid in these reverse auctions the bid must be much lower than any maximum bid possible number such as $0.1925/kwh.


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