Private Investment Drives Wind, Solar Projects in California
A flurry of power-supply deals between renewable-energy providers in California and private firms Apple, Google and Kaiser Permanente will mean billions in construction dollars for the state, which is already a U.S. leader in renewable-energy expansion. The deals signal that private, industrial-scale customers are playing an increasing role in wholesale renewable-energy sales, which have depended mostly on public policy for market share, says First Solar, a solar-power supplier.
Apple signed an $848-million power purchase agreement (PPA) with First Solar to buy 130 MW from the proposed 280-MW California Flats project in Monterey County. The PPA is the "largest in the industry," says Steve Krum, First Solar's business development manager.
The utility Pacific Gas & Electric will purchase the solar plant's remaining 150 MW of capacity. "The Apple piece shows that private companies are stepping up, that renewable-power solutions are not cost prohibitive, and the environmental benefits have value," Krum says.
The environmental impact review of California Flats was certified and approved by Monterey County the same day as the Apple announcement, says John Ford, the county's planner. The project now enters the preconstruction phase of permitting and mitigation, he says.
A NextEra Energy Resources project to replace aging turbines with more efficient models at the Altamont Pass wind farm, one of the nation's oldest, will get a boost now that Google and Kaiser Permanente signed two separate PPAs—each for 43 MW—covering the revamped facility's entire generating capacity. Financial details were not made available.
NextEra will replace approximately 770 turbines at Altamont Pass with 48 new machines, expected to produce twice the energy. The new configuration will be less dangerous to birds, which is a concern raised by opponents of solar and wind projects, says NextEra.
Kaiser Permanente also will purchase 110 MW from NextEra's proposed 485-MW Blythe Solar Power Plant in Riverside County, Calif. Construction of the first of three planned phases at the $1.1-billion Blythe plant is expected to begin later this year.
In a separate deal with NRG Energy, Kaiser Permanente plans to install enough solar capacity throughout its health-care network to generate 70 MW of electricity per year at a locked-in price for 20 years.
Despite the recent deals, utility-scale applications continue to be the key driver of the U.S. solar market, accounting for 61% of total installations in the third quarter of 2014, according to a University of California study. Utility-scale solar-power generation has quadrupled since 2012, and the renewable market share has grown to 19% in 2014 from 11% in 2008.
Tax credits, American Recovery and Reinvestment Act funding and California's Renewables Portfolio Standard—which requires 33% of the state's energy supply to come from non-fossil-fuel sources—are driving the new construction. The California Environmental Quality Act, which addresses greenhouse-gas emissions, also has played a key role, says Peter W. Philips, author of the study.
Amazon, Google and Facebook all say they have long-term strategies to source 100% of their power from renewables, and Apple says its data centers are already 100% alternative-fuel-powered. Energy from California Flats will power Apple's headquarters, along with some retail stores and a data center, First Solar says.
Approximately 4,250 MW of photovoltaic and thermal-solar power were built in California over the past five years, generating over 10,000 construction jobs.
As construction workers build this surge of alt-energy infrastructure, they are developing new skill sets that will increase the value of the labor workforce, Philips says in the study.
"Because of the classroom and on-the-job training that this solar boom is financing, human capital in construction is being built alongside the physical capital of utility-scale and distributive solar rising in the deserts and on the rooftops of California," he says.
