California regulators have approved five power purchase agreements that could boost the state's renewable energy capacity by 1,088 megawatts (MW) and produce 2,927 gigawatt-hours (GWh) of energy.
The projects, two for wind and three for solar, are divided among the state's biggest utilities – Southern California Edison, Pacific Gas and Electric and San Diego Gas & Electric – all of which are required to source 33 percent of their energy from renewables by 2020. The state recently reported that in 2010 the utilities passed the 16 percent mark.
Southern California Edison led the way in this new round of approvals, getting the state Public Utilities Commission (CPUC) to sign off on 20-year power purchase agreements the utility reached last January for power produced at three solar photovoltaics (PV) projects backed by San Jose-based SunPower.
Those projects include a 110-MW plant in Las Banos that is scheduled to be in operation by the end of 2014, and dual 325-MW and 276-MW plants set for Rosamond that are expected to be generating power in October 2016.
While the commission didn't release the pricing details, CPUC President Michael R. Peevey said he was " glad to see that these contracts represent more than 700 megawatts that are below the market price referent." The market price referent is a tool the state uses to compare the long-term cost of new energy sources to the long-term cost of getting power from a new 500-MW natural gas-fired combined cycle gas turbine (CCGT).
The other solar contract approved was San Diego Gas & Electric's amended 20-year deal with a Pattern Energy-owned project in Imperial County that is expected to provide 299 MW of capacity. This project is further along, with energy deliveries expected to begin in December.
Lastly, Pacific Gas and Electric won backing for 25-year agreements with NextEra's Montezuma 1 and 2 wind projects in the Montezuma Hills of Solano County. The PUC said the plants will provide 78.2 MW of new capacity and generate 201 GWh of energy annually, begining in November.
While California's utilities, which were delivering about 16 percent of their power from renewables in 2010, have until 2020 to hit the state's 33 percent renewable portfolio standard target, they can't dawdle in adding capacity. That's because the law requires them to be at 20 percent by the end of 2013 and 25 percent by the end of 2016.
Plus, not all the power purchase agreements result in power actually making it to the grid. According to that report on the state's renewable progress, "About 30 percent of long‐term RPS contracts (10 years or more) approved by the California Public Utilities Commission have been cancelled," and "the contract failure rate increases to about 40 percent if contracts that are delayed are considered."
Based on that, the report advised utilities to contract for renewable capacity considerably beyond the amount needed to meet the RPS.