Lawrence Berkeley Lab: Utilities Don’t Fully Account for Benefits of Solar Projects

By Andrew Mills and Ryan Wiser

Recent declines in the cost of photovoltaic (PV) energy, increasing experience with the
deployment of concentrating solar power (CSP), the availability of tax-based incentives for solar, and state renewables portfolio standards (RPS) (some with solar-specific requirements) have led to increased interest in solar power among U.S. load-serving entities (LSEs). This interest is reflected within LSE planning and procurement processes and in a growing body of literature on the economic value of solar energy within utility portfolios. This report identifies how current LSE planning and procurement practices reflect the drivers of solar’s economic value identified in the broader literature. This comparison can help LSEs, regulators, and policy makers identify ways to improve LSE planning and procurement.

The report reviews 16 planning studies and nine documents describing procurement processes created during 2008–2012 by LSEs interested in solar power (Table ES1). We first summarize the typical approach used by LSEs in planning studies and procurement processes. We then analyze the LSEs’ treatment of the capacity value, energy value, and integration costs of solar energy; the LSEs’ treatment of other factors including the risk reduction value of solar, impacts to the transmission and distribution system, and options that might mitigate solar variability and uncertainty; the methods LSEs use to design candidate portfolios of resources for evaluation within the studies; and the approaches LSEs use to evaluate the economic attractiveness of bids during procurement. We offer several recommendations that could help LSEs improve planning
studies and procurement processes.

Read the full report:  http://emp.lbl.gov/sites/all/files/LBNL-5933E.pdf

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