In a sign that the sun may finally be shining on solar energy, an administrative law judge in Minnesota has found that a plan to build distributed solar arrays and supply renewable-energy credits delivers life-cycle value superior to rival proposals to build combustion-turbine plants. He recommends the Minnesota Public Utilities Commission select the solar developer's proposal.
Geronimo Energy, Edina, Minn., was the lone developer offering solar energy in response to a call from Xcel Energy Inc. for 150 MW of capacity by 2017 and possibly 500 MW by 2019. Geronimo proposed a ground-mounted single-tracker system of photovoltaic panels with 130 MW of direct-current capacity, yielding 100 MW of alternating current. The proposed system would be distributed over 20 sites, ranging from 2 MW to 10 MW, located near distribution sub-stations, thus making no demand on transmission capacity. The total estimated cost would be $250 million, or $2.5 million per installed MW, says Betsy Engelking, Geronimo vice president.
Three other offers—from Calpine Corp., Invenergy LLC and Xcel itself—proposed gas turbines in various configurations and capacities, while a fourth, Great River Energy (GRE), offered renewable-energy credits to Xcel from existing plants. Because of the difficulty in comparing the proposals, the Minnesota PUC asked for a report and recommendation from an administrative law judge following a more complete development of the record.
On Dec. 31, Administrative Law Judge Eric L. Lipman reported that Geronimo's system, coupled with GRE's capacity, offered scalability that the fixed turbine size of the other three plans could not match, avoiding the problem of overbuilding capacity. Further, he found Geronimo and GRE offered renewable-energy credits the other firms did not.
Lipman's report also notes that Geronimo's proposed facilities would not emit carbon dioxide or air pollutants and that they would not require cooling water for operation. Also, Geronimo's distributed generation would avoid transmission-line losses, saving an estimated $9 million.
Lipman recommended the PUC select Geronimo's proposal, augment it with capacity from GRE if necessary and direct Xcel to negotiate a purchase power agreement with the selected companies. Calling the procurement a "turning point in Minnesota's energy-resource planning process," Lipman concluded, "Geronimo entered this bidding process as the sole renewable technology and beat competing offerers on total life-cycle costs."
Lipman's report is not the final word, and the commission may or may not adopt his recommendation, says Burl Haar, PUC spokesman. The PUC will be requesting exceptions and is not likely to decide the case before March, he says.
Xcel Energy, which issued the request for proposals, disagrees with the report and says it will file a complete response when the commission receives exceptions.
"The cost of solar technology is coming down much faster than anyone expected" because of more efficient solar panels, the declining cost of materials and increased production economies combined with a softening European solar market, says Engelking.