Posted by: jbarnesca | August 26, 2010

Proposed CPUC Decision on 1GW RAM Solar PV Program

Yesterday(August 25th) the CPUC published their proposed final decision on the impending 1GW sized solar PV program for Utilities in CA.  This has been long awaited and is the program that first introduced the RAM(reverse auction mechanism) preference of the CPUC for all of the new IPP programs that have been approved recently.

This will apply for applications from >1.5-20MWp in a bidding pool that supposedly will be done twice a year.

It is hoped that this larger bidding pool will allow more winners with diversity that the restricted bids of 50MW each yearly cycle.  For instance in the PG&E IPP program with a bidding pool of 50 MW this cycle and a size limit of 20MWp, then three bids could win: 2 @20MWp and 1 at 10MWp for instance by very large established developers trying to low ball the market and get recognition.

Simplified Preapproval Threshold, SPT, Understand It!

Introduced is a concept of SPT to set a pricing about which bids would appear to be rejected in the initial bidding.  This is very detailed in the proceedings with the above MPR rate set and the various Utility TOU schedules applied.  This rate is MUCH less than the previously approved rates for the SCE, PG&E, and SDG&E IPP programs.  So we know how low the maximum bids must be for this program, and at what rate above the MPR table that the CPUC values solar PV .

This is a very important program, and I will post details after much careful reading in the next week.

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Responses

  1. Hi –

    It’s good they placed a ceiling on these bids with the SPT, but what about a declining mechanism?

    As we know costs come down when the industry can plan and invest with confidence, and economies of scale are achieved. Also, don’t we wish to incentivize the industry to improve their costs? After all, that’s what European style FITs (when properly designed) do so well.

    It seems that a RAM without a declining mechanism provides plenty of opportunity for large sophisticated developers to game the system, even with the SPT.

    Cheers,
    Bob

    • The fact that this total program is expected to be exhaused within two years of the first bid would seem to satisfy any desiire for a decreaseing cap to first reject bids.

      I would believe that the winning bids will produce this decreasing pressure over such a short time frame.

  2. I did a quick check of the SPT and, while it’s pitched in the document as being much lower than the previous cap, once you factor in the 1.35 TOU multiplier and the fact that these projects won’t come online til 2015 it’s actually identical.

  3. good start

    • After considerable complaints from SCE and the other IOU’s it would seem now that the RAM program will move forward soon.

  4. Hello,
    In this post, you reference a minimum system size of 1.5 MW. I do not see anything in the decision eluding to a minimum system size. Have I missed something?


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