Posted by: jbarnesca | September 27, 2013

RAM 4 Intial Winning Bids

I have just returned from three days(Sept 24-26) at the Utility Scale Solar Summit conference in San Diego which always has the majority of the top directors, VPs, and CEOs of the leading utility scale developer and investor/owner companies of projects in the US.  So here are some observations discussed there.

The initial winning bid range for SCE and PG&E in the Sept RAM 4 seemed to be from $69/Mwh to $72/MWh before the appropriate TOU table of each utility.  Remember that this round of the RAM used a new and lower TOU table for both “full deliverability” and “energy only” bids.  So a win at $70/MWh in RAM 4 is actually a significantly lower win than the same win in RAM 3.  Some rumors of a lower ~$60/MWh winning bid with an escalator which gets back toward the $69/Mwh bid after averaging over the 20 year term were discussed.

There are ongoing changes in the winning projects as we hear that some of the initial winners have dropped out due to the fact that changes in pricing, interconnection costs, and permitting issues have occurred for the worse since the bids were initially submitted.

Consequences

We have talked about the CAISO cluster queue for Cluster 3, 4, and 5 in the past postings.  Now that the last scheduled RAM award is in the spring of 2014 and continuing massive transmission grade upgrade postings are due, the 20MW listings should be massively reduced in the coming months once again.

Furthermore it would seem that many of the best developers found that their low bid with any possibility of financing and building these projects at this time was around $73/MWh.  Of  course we will see if these winners become casualties and are dropped in the upcoming years before the construction deadline of the PPAs.

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