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Idaho Power recently outsourced 120 MW of solar energy for a record price of 2.175 cents per kWh of electricity, a world record.
This figure is incredibly low, one of the numbers grouped around this price level. But if you take a closer look at the specific conditions of the project, you might think that the current holder of that particular title does not have to worry.
In the rapidly changing world of the solar industry, recordings often do not last very long.
Industrial power lines that extend across the desert of Idaho. Photo credit: Getty
Getty
Technological performance benchmarks often collapse as soon as they are defined. Billionaires can make a fortune and losses. An industry record seems to be running out of roads yet and the Idaho Power deal is the pretender to the throne. It is an honor for the solar industry that many projects built around the world at prices push the boundaries of their respective markets.
Other projects claiming this "record" award include the last phase of the Mohammed bin Rashid Al Maktoum Solar Park at 2.4 cents per kWh and the 300 MW Sakaka Project in Saudi Arabia at 2,342 cents / kWh.
In the United States, Eagle Shadow Mountain Solar Farm is priced at 2,376 cents over the term of its 25-year power purchase agreement.
A long series of projects in the southeastern states have swapped the lowest ever recorded in the United States. only hold the eye-catching price in the early years before a price escalator comes into playagain, this is a reason for exclusion. The Idaho Power contract has a 20-year term, but the site can be expanded beyond the original 120 MW power, but in this case, the price will increase.
The Idaho Power project has another major price advantage. It is under constructionreplace"The much larger coal plant in North Valmy, Nevada will use the grid connection left vacant by the site, which is undergoing a gradual decommissioning process starting this year. This means that the initial upfront costs of connecting the installation to the network are avoided.
As its completion is not expected until 2022, it will also benefit from lower component prices.
But it is an argument that all US projects can not really be compared fairly because they benefit from the 30% Investment Tax Credit (ITC).
A study conducted in 2016 by the National Renewable Energy Laboratory (NREL) estimated the impact of credits on the discounted cost of energy (LCOE). This is the & nbsp; measurement of the cost of electricity generated when all factors have been taken into account, land costs, permits, interest costs badociated with any loan, price and performance of components used, etc. large scale solar projects if the ITC was not in place, would be at least 15% higher.
In fact, comparing two solar projects is a delicate exercise. Prices obtained in the Middle East have benefited from other advantages, including very low cost financing and exceptional sunshine. Thus, while the Idaho project deserves congratulations for having exploited the opportunity created by the closure of the coal-fired power plant, it may have too many advantages to place it at the top of the hierarchy. It's a good job that it's not a competition.
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Idaho Power recently outsourced 120 MW of solar energy for a record price of 2.175 cents per kWh of electricity, a world record.
This figure is incredibly low, one of the numbers grouped around this price level. But if you take a closer look at the specific conditions of the project, you might think that the current holder of that particular title does not have to worry.
In the rapidly changing world of the solar industry, recordings often do not last very long.
Industrial power lines that extend across the desert of Idaho. Photo credit: Getty
Getty
Technological performance benchmarks often collapse as soon as they are defined. Billionaires can make fortunes and dramatic losses. An industry record seems to be running out of roads yet and the Idaho Power deal is the pretender to the throne. It is an honor for the solar industry that many projects built around the world at prices push the boundaries of their respective markets.
Other projects claiming the "record" award include the last phase of the Mohammed bin Rashid Al Maktoum solar park in Dubai (2.4 cents per kWh) and the Sakaka project of 300 MW (Saudi Arabia) at 2.382 cents. the kWh.
In the United States, the Eagle Shadow Mountain Solar Park is priced at 2,376 cents over the 25-year term of its 25-year Power Purchase Agreement (PPA).
A long series of projects in the southeastern states have swapped the lowest ever recorded in the United States. Many of these projects only hold attention during the early years, before a price escalator triggers. view. The Idaho Power contract has a 20-year term, but the site can be expanded beyond the original 120 MW power, but in this case, the price will increase.
The Idaho Power project has another major price advantage. It is being built "to replace" the much larger coal plant in North Valmy, Nevada, and will make critical use of the grid connection left vacant by the site, which undergoes a gradual decommissioning process from that site. year. This means that the initial upfront costs of connecting the installation to the network are avoided.
As its completion is not expected until 2022, it will also benefit from lower component prices.
But it is an argument that all US projects can not really be compared fairly because they benefit from the 30% Investment Tax Credit (ITC).
A study conducted in 2016 by the National Renewable Energy Laboratory (NREL) estimated the impact of credits on the discounted cost of energy (LCOE). It is the measure of the cost of electricity produced when all the factors have been taken into account: land costs, permits, interest costs badociated with any loan, price and performance of the components used etc. It was found that solar projects with no ITC in place would be at least 15% higher.
In fact, comparing two solar projects is a delicate exercise. Prices obtained in the Middle East have benefited from other advantages, including very low cost financing and exceptional sunshine. Thus, while the Idaho project deserves congratulations for having exploited the opportunity created by the closure of the coal-fired power plant, it may have too many advantages to place it at the top of the hierarchy. It's a good job that it's not a competition.
