Since the CAISO cluster 8 application period is closing in a couple of weeks at the end of April 2015, it is a good time to reflect on the past and present CAISO interconnection queue and give some perspective where this important barometer of large solar projects in development in CA stands.

For those that might not be familiar with this queue, let me remind you of a couple of things.  This queue shows both the active and in-active larger solar projects that have started development in the California CAISO transmission network system.  For SDG&E and PG&E this comprises projects that desire to connect on transmission lines at the 69Kv or larger level; however, for SCE there are legacy 69Kv lines that are classified in their distribution circuit system and interconnection requests of several 20MW ish projects are found on their WDAT distribution network interconnection queue listing.

The total PV active interconnection queue comprises 10.92  GW as of now.  In general C7 projects are at the completed Phase I study stage, C6 projects are at the completed Phase II study stage,  Most C4 projects are forced to be at the large deposit completed interconnection agreement stage, and C5 projects are close to the interconnection agreement signing stage with lots of $$ due to the Utilities.

At present there are 7.23 GW of active projects in Cluster 4 and earlier queues.  In Cluster 4 the three largest remaining projects are:

1. 240 MW in San Bernardino CO
2. 221 MW in Riverside CO
3. 200 MW in Merced CO.

I did not perform cross checking of recent RPS RFOs to determine if these have a PPA at the moment or to check on their present status. These are too big for RAM, of course.

For Cluster 5 – Cluster 7 there are 3.68 GW of projects active with the largest projects being:

1. 370 MW in Maricopa CO
2. 280 MW in Monterrey CO.

Here are some statistics on the dropout that has happened on Cluster 4 and Cluster 5 projects:

• Cluster 4 dropouts have been 27.33 GW
• Cluster 5 dropouts have been 12.78 GW

What a waste of time, money, and effort along with interconnection studies/deposit money because the Utilities were able to resist large amounts of solar in the CPUC PPA approval processes.

Out of the proceedings for the RPS requirements for the utilities for the coming year, D.14-11-042, issued on Nov 20, 2014, and a first proposed ruling for the long-awaited SB 43 program(now called Green Tariff Shared Renewables GTSR), some changes are occurring for a new RAM 6 offering this June.  This ruling allocated a new RAM 6 capacity of 75MW distributed among the three IOUs, and set a proposed offering time of June 30th for this further continuation of RAM as we have known it.

It is important to now separate the RAM procedure and process for procuring renewables from a specific RAM PPA as has been the case.  This proceeding will now allow the mechanism, legal documents,  and requirements of the RAM process to be used for upcoming unspecified PPA procurement on the behalf of the IOUs.  However the CPUC made changes that are very favorable to the Utilities’ desires.

For future offerings the minimum size and maximum project size restrictions will be eliminated. The range from 1-3MW was previously set aside for special programs in the past such as the IPP programs of SCE/PG&E/SDG&E, the SCE CREST program, and the present Re-MAT program.

A phase II study or equivalent Facilities study is necessary for PPA procurement under RAM offerings.

Also it seems that the utilities after RAM 6 will be allowed to change the maximum size in the past of 20MW  to an unlimited size.  So with these changes all the protected program advantages of projects 1-3MW, and the up to 20MW, from the huge ~100-200MW projects in the desert will be taken away.

I will write about the possible consequences of these changes in another posting soon.

Today (11-5-2014) the most important SCE listing of winners and losers in the FINAL RAM 5 RFO were announced.  In all categories they awarded 330.5 MW in this last RAM RFO that is approved by the CPUC.

For solar my calculations of the biggest total portfolio winners are:

• GCL-Solar Reserve   75MW
• Infigen Energy          55MW
• NexEra                       60 MW

Twenty 0ne contracts of all types were awarded with 16 being solar.  The leading companies in solar with offers were EDF Renewables with 10, Sustainable Power Group with 8, and GCL-Solar Reserve with 7.  There were 53 offers that passed all screens for possible selection.

If you study the submission list you can easily determine the Real large solar developers in the CA market at this time.  This is Advice Letter 3128-E and should appear on the SCE advice letter site in the next few days.

With regard to winning pricing, one should note that the continuing decrease in the TOU table pricing would make a winning bid in this RAM 5 offering worth less than the prior RAM 4 offering.  The summer full capacity deliverability factor went from 2.77 to 2.64 for instance.  Also groups had to consider the effects of tariffs on Chinese modules into the picture for their bid prices.  Generally the rumor is that the high bids were limited to about $0.072/Kwh.

 

 

After fighting to terminate their IPP Solar PV program for almost two years, this third offering of 50MW per year is finally being announced as of October 21st. This third offering should have happened in 2013, but PG&E as well as SCE on their SPVP programs, fought hard to terminate them and put the capacity into the RAM 5 offering. Fortunately opposition forced them to keep these nice programs that might have capacity for some sub 20MW solar projects going forward.

This third offering will be for 50MW plus 8 MW from terminated prior winning projects. The 8 comes from 4 terminated 2MW projects initially by SilRay at a very low rate at the time of less than $0.07/Kwh.  In May of 2012 that would have seemed like an unbelievable low rate for small 2MW projects to produce a tolerable unlevered IRR for further financing and ownership groups.

Since 20MW projects are eligible for this program as well as 1MW projects we could expect only three winners again.  Two 20MWs and a downsized 18MW that was actually a 20MW interconnection application.  Thinking positively, maybe some 1.5MW and 2MWs might be allowed to win by PG&E to prevent too much complaining to the CPUC.

Strictly speaking one criterion for eligibility is clearly stated in their documents as:

It is well understood that for the full resource adequacy (full deliverability) TOU payment you must apply basically in the cluster process of CAISO each March for this determination. Also it is known that any application using the somewhat streamlined RULE 21 application process for smaller projects would have to separately apply for full deliverability in the March cluster.

However, the statement above, and in all docs approved for this program, would seem to imply that NO rule 21 small project application would be eligible for this program now or in the future?  If that is the interpretation, then projects of recent time that have been using RULE 21 and thought this was sufficient for programs of the sub 3MW size would be terribly surprised at this finding.

In the update presentation today from PG&E, SDG&E, and SCE the results for the first 6 program period rounds of the ReMAT program for the solar projects was presented.

You can see that for SCE some sanity has occurred among the participants with the price at the $81/MWh level for the next acceptance period.  However you can see the insane actions by some participants in PG&E territory.  Financing a project of that small size at the $51/MWh level even if it had full capacity TOU payments would seem quite a challenge.

 

For baseload (geothermal etc.) and non peaking (wind and biogas) these programs are completely stalled with few participants as noted.

On May 29, 2014, SCE filed Advice 3045-E with the Commission which finalized changes in the RAM procedures and PPA documents.  There will be a web conference on June 5th but developers will have to be almost finished by that time on the large application documentation as the deadline for submission is still June 27th as expected.

SCE states a desire to purchase these allocations:

• solar 150-190MW
• wind 80-120MW
• geothermal, biomass 0-40MW

Later in the day both PG&E and SDG&E filed their advice letters for RAM 5, so the program is underway for June as expected.

There are other posting which have stated that the winning bids for the RAM 4 RFO were in the $0.073/KWh range, but I suspect that was at the high portion of the range.  This is of course before the TOU adder which is different for each of the IOUs and is much different with and without full capacity allocations.

Since the filing in December of 2012 by PG&E to try to terminate the third thru fifth year of their PV program this RFO for projects between 1-20MW has been in considerable limbo.  Let me refresh your memory on some aspects of this program.  This was the PG&E PV only program with a stated allocation of 250MW for the utility to build and 250 for IPP bids divided into 50MW for each over a 5 year period.  The SCE program was called the SPVP program with a bias for smaller ~1.5MW or lower rooftop projects.  These programs proceeded normally for the first two years, then the Utilities filed advice letters and requests to TERMINATE their programs and basically throw the remaining allocations into the normal RAM yearly offerings. Last year against their wishes(to my total surprise that they did not get what they wanted)  SCE was forced to hold the third round of the IPP portion, while being allowed to terminate their UOG portion and put that capacity into the RAM allocation.  That is why their RAM allocation was increased to the level seen today.

The new status is the rejection of the PG&E termination effort and their giving up for a third round of the IPP portion with an RFO in June.  There were earlier docs which were rejected but I believe this one from Feb 26 will probably be the accepted version, with some minor changes from the objection period.

Key takeaways:

• They desire to offer a PV only RFO for 58MW in June at the same timing for the RAM 5 RFO
• They desire to revise the PPA document to closely match that being used for the RAM 5 RFO.  There were different PPAs for projects 1-3MW and then up to 20MW in the first two years of the program and in the program design and CPUC approval at that time.
• Because of the initial program attributes projects from 1-3MW are allowed, one last time.  However going forward they will be excluded as is done in the RAM RFO.
• They and SCE are still trying to terminate the 4th and 5th year of the IPP program
• They will then place the remaining 4th and 5th years of both their UOG and IPP programs into a separate later RFO that is PV only but using the mechanics of the RAM RFO  This is a new 200MW opportunity. They specifically do not want this to be called a RAM 6 extension, but separate.

So in summary PG&E has been FORCED to have a third year PV program RFO like SCE was last year. It is the normal 50MW per year plus the 8MW coming from the terminated SilRay projects from the second year RFO.

So at present this change could produce a 58MW PV only PG&E RFO for this June and a psuedo RAM extension in PG&E territory for 200MW more over a new two year period.

The “2013 Preliminary Annual 33% RPS Compliance Report of Pacific Gas and Electric Company” was published today.  So let’s look at what they are saying now.

Using the data up to February 10, 2014 they had procured approximately 22.5% of their 2013 retail sales with actual 2013 deliveries from prior RPS procurements.  Of note is that 78% of this came from projects executed before June 1, 2010 and before the phenomenal drop in prices that have occurred in subsequent annual RFO and RAM solicitations.

Also they once again state no further need for Renewables until the 2020 time frame.

They state why in the 2013 RPS RFO they have sought incremental capacity with a preference for 2020 operation.

I would expect that the SCE filing will produce similar statements.

The coming Cluster 7 CAISO and SCE interconnection application deadlines for projects ~20MW and larger are approaching.  SCE has distribution circuits that support 20MW projects so I include their WDAT cluster in this discussion.  This window is from April 1st to April 30th this year.

So why could this be interesting?  Remember that starting with Cluster 5 in April 2012 the usual massive number of applications dropped off significantly as groups realized that obtaining a PPA and operating the projects before the ITC expiration deadline did not seem probable. Even now the Cluster 5 applications do not seem well set up for the RAM RFO in June, due to the timing of those interconnection completions.

Then why would you submit for Cluster 7 in a month from now?

What if you wanted to place a long term bet that the ITC issue would not be too bad, that the carrying costs of Cluster 5- Cluster 6 projects for 3-4 years would force most to drop them, and then you might be set up for a change in policy and need for PV at that time?  Also you would be able to resubmit projects that had earlier dropped out with known SIS and Facilities reports for possible reference to guess the cost when most in the prior queues had dropped out. The significant deposits from the Phase I and Phase II studies are not even starting until 2015, so you could have a bet with possible little carrying costs to see what happens.

Let us see what the leaders and new long term players think and how large this Cluster 7 group of submission becomes.

If you need help in developing projects for this application, surely give us a call to make that happen at Solar Land Partners, Inc.?

 

 

 

The first comments by all parties on whether the RAM program should be extended with a new authorization of capacity were filed on 1/30.  In these comments all three utilities (SCE, PG&E, and SDG&E) came out on the same side.  They claim the goals of the RAM program are already met, that they are meeting their RPS goals into 2017, and that the program should NOT be extended.

As usual SCE was the most opposed to any new program and had a new twist that they desired to use the RAM PPA contract with no negiotiation terms going forward in some future RFOs that might be needed later.

There was some language from PG&E about what they would propose if they were forced to accept a new program extension.

In other filings that have occurred PG&E had joined SCE in once again proposing that their IOU and IPP PV program be terminated and folded into the last RAM allocations. Again SCE is trying to terminate their SPVP program with the third year offering last year that they were forced to hold against their wishes.

In looking at the comments filed by the lobbying groups that usually have some clout in CPUC proceedings, it seemed to me that these were not strong enough to overcome the desires of the utilities to terminate the program with RAM 5 this coming June.

Comments and lobbying efforts should be made about this expected outcome, if your companies care about future RFOs for 20MW and lower size projects into next year.