James Montgomery, Associate Editor, RenewableEnergyWorld.com
March 01, 2013 | 2 Comments
New Hampshire, USA -- Today (March 1) at 8:00 am EST, Georgia Power Company began accepting applications for its Advanced Solar Initiative (GPASI), a program that will add 210 megawatts of solar capacity over the next three years. This first deadline is for small and medium-sized facilities (up to 100 kW and 100 kW - 1 MW, respectively), for which the utility is seeking a total of 45 MW in each of the next two years. An additional 60 MW of utility-scale projects will be solicited for 2013 (that RFP goes out next month) and 2014, to be brought online in 2015 and 2016.
Initial interest in the GPASI indicates there's a lot of untapped demand for utilizing Georgia's plentiful sunlight. Within 90 minutes, Georgia Power had already received 15 applications.
It's a big step forward for Georgia Power and the state, and one it's doing voluntarily without an RPS or third-party PPAs. Solar has been slower to gain ground in Georgia due to low electricity rates, no RPS requirement, and blockage of power-purchase agreements due to the state's Territorial Service Act of 1973.
The GPASI program represents the nationwide transition and evolution of energy mix, points out Julia Hamm, president and CEO of the Solar Electric Power Association (SEPA). "Utilities — regardless of whether they are big or small, owned by investors or municipalities or customers, under an RPS mandate or not — are seeing solar as a cost-effective option," she said. "This type of solar progress from a conservative utility with low retail rates and wholesale power costs serves as a strong example for other utilities."
Kerinia Kusick, director of government affairs for SunEdison, who earlier this month led a panel discussion at PV America reviewing several eastern-U.S. solar markets, acknowledges Georgia Power's efforts to bring in more solar energy capacity, though she also credited the influence of the Georgia Public Service Commission (PSC).
"In 2012 we recognized that technology costs continued to come down, and that solar has to have a place in our portfolio," explained Ervan Hancock, manager of renewable and green strategies at Georgia Power. By the middle of 2012, Georgia Power was sending trained workers across the state to help customers understand solar technology and make informed decisions, and beefing up its online resources to help customers understand solar's benefits and limitations.
In November the PSC approved the GPASI program, but squeezed the scheduled duration into two years and hiked the distributed generation portion from 30 MW to 90 MW. Simultaneously, the PSC narrowly rejected a request by Georgia Solar Utilities, which had petitioned to develop utility-scale solar capacity and sell energy directly to retail customers — but in that decision the PSC acknowledged solar energy's "potential benefit to ratepayers" in Georgia and encouraged its development.
The Value of Solar Energy
The GPASI establishes levelized pricing at $0.13/kWh, with all-in value starting at $0.08/kWh and going up to $0.175/kWh over 20 years. (Utility-scale projects were approved for $0.12/kWh pricing.) Without specifically breaking down the numbers behind those calculations, Hancock explained that Georgia Power combined NREL energy evaluations with its own energy forecast, prices from traditional energy sources, to get most of the pricing value. "Then we looked at the production curve what solar produces," including the capacity benefit of having the load center and generator in the same place which provides long-term value to Georgia Power to avoid upgrading transformers and lines.
As costs for solar energy generation have continued to fall — and as costs go up for other local energy sources, such as nuclear and biomass — Georgia Power now feels it can responsibly adopt solar into its portfolio, said Hancock. "We will pay a premium for solar and renewable energy — if customers will pay that premium, and subsidize renewables."
It's worth noting that the 210 MW of new solar energy capacity under the GPASI comes at the expense of other renewable energy efforts, a PSC-approved reallocation of pledged biomass capacity which hasn't panned out. Georgia Power has negotiated approximately 800 MW of biomass capacity but "none of it has come online" due to economic and environmental hurdles, Hancock said. Georgia Power's own proposed 120-MW biomass conversion project in Albany, for example, is currently on hold and in review due to changing EPA regulations.
In-house meetings last week on the GPASI's distributed generation RFP and the utility-scale RFP process each had 300 attendees in person or online, according to Georgia Power execs. If applications for distributed generation exceed the 45-MW capacity limit, a lottery for all approved participant applications will be conducted by April 5th, and a waiting list will be established (20 percent of that pledged capacity, or 9 MW) in case any awarded projects miss the 6-12 month interconnection grace period. Kusick predicts oversubscription, but thinks the lottery system is the wrong mechanism that rewards the lucky, while "first-come/first-served rewards the prepared."
Beyond the GPASI program, Georgia Power is already in the early stages of its longer-term (20 years out) energy planning cycle, looking at all energy resources including renewables, from load forecasts to need requirements. It'll take another four months to complete the open-stakeholder process. "People need to know how the Georgia market is evolving," Hancock said. Parent company Southern Company has been investing for several years in solar where its is cost-effective, he said, "and now we're investing on behalf of customers that it's cost-effective but doesn't impact their rates."
No matter how the GPASI pans out over the next two years, it's already achieved something important, Hamm and Kusick point out: an opportunity to talk more about the future mix of renewable energy in the state of Georgia, and a bigger shift toward solar's role in that discussion.
Lead image: Atlanta skyline with sun rays and peach fruit, via Shutterstock