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Utility Scale Solar - Kerinia Cusick
 

Utility Scale Solar - Kerinia Cusick

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    Utility Scale Solar - Kerinia Cusick Utility Scale Solar - Kerinia Cusick Presentation Transcript

    • Georgia Tech Clean Energy Speaker Series: SE Solar Project Development Incentives & Challenges Kerinia Cusick Director, Government Affairs May 26, 2010 0
    • Today’s topics Three types of solar – three business models Drivers and impediments for commercial solar project development North Carolina case study: SunEdison’s Duke project Sun Edison LLC - confidential & proprietary. Do not redistribute. 1
    • Three types of PV, three business models Residential Commercial/Industrial Standard Solar, Silver Spring, MD SunEdison, Kohl’s Laguna Niguel, CA Utility SunEdison, Alamosa, CO Sun Edison LLC - confidential & proprietary. Do not redistribute. 2
    • Residential PV: Largely Cash Purchase Business Residential: Historically cash purchase Alternative financing models just getting started: PACE and power purchase agreements Characterized by upfront incentives Standard Solar, Silver Spring, MD Higher installation costs, but offsetting highest electricity cost Net metered, grid tied systems most common Less cost sensitive customer Key challenges: upfront investment, HOA, complexity for home owner Sun Edison LLC - confidential & proprietary. Do not redistribute. 3
    • Commercial/Industrial: Dominated by Power Purchase Agreements Commercial/Industrial: 90% of commercial/industrial done via power purchase agreements (PPAs) Characterized by output based incentives (PBI, SREC) Economies of scale drop installation costs, but offsetting lower electricity rates SunEdison, Kohl’s Laguna Niguel, CA Customer is very cost sensitive Provides the benefit of distributed generation Interconnected on customer side of the meter Roof or ground mount Key challenges: financing, net metering Source: Greentech Media Research, “Solar Power Services:Edison LLC - confidential & proprietary. DoPV redistribute. Sun How PPAs are Changing the not Value Chain” 4 http://www.greentechmedia.com/GreentechMedia/Report/SolarPowerServicesHowPPAsareChangingthePVValueChain.html
    • Utility Scale: Power Purchase Agreements or Ownership Utility: Ownership models driven by state regulations Competing against wholesale power rates Greatest economies of scale but incurring earthwork and foundation costs Interconnected on the utility side of the SunEdison, Alamosa, CO meter 100% ground mount Key challenges: land use, permitting, financing, utility interest, interconnection studies Sun Edison LLC - confidential & proprietary. Do not redistribute. 5
    • Solar construction occurring all over the US CO: 59 MW MA: 18 MW NV: 100 MW NY: 34 MW CT: 20 MW NJ: 128 MW CA: 1,102 MW AZ: 50 MW FL: 39 MW HI: 27 MW Cumulative solar capacity: SEIA, US Solar Industry Year in Review 2009, April 2010 Sun Edison LLC - confidential & proprietary. Do not redistribute. 6
    • Solar friendly states on the rise Solar friendly states in 2010 Solar friendly states beyond 2010 NH WA VT ME MT ND What makes a state “solar friendly?” MA OR MN NY Renewable Portfolio Standard ID WI SD RI (RPS): specifies amount of MI WY PA CT energy that must come from IA NJ renewable sources by a target NE OH NV IL IN year. Some states have DE UT WV VA specific solar RPS requirements CA CO MD KS MO DC Net metering: allows electricity KY NC to flow back to the grid when a TN customer’s generation exceeds OK SC AZ NM AR usage, offsetting electricity GA MS AL consumed at a different time LA Interconnection standards: TX set of technical, contractual, FL metering, and rate arrangement processes by which an electric customer connects an electricity-generating system to AK the grid HI Sun Edison LLC - confidential & proprietary. Do not redistribute. 7
    • Solar financials driven by more than just insolation levels South East US North East US West US Solar Insolation Levels Electricity Rates Peak/Congestion Charges Large peak load Sun Edison LLC - confidential & proprietary. Do not redistribute. 8
    • Benefits of solar Distributed solar produces power where needed Solar offsets peak power 500 MW 500 MW Central Central power power 450 400 350 Strained transmission 300 kWac lines 250 200 End End End 150 Host load1 customer customer customer 100 2 MW 400 kW 50 Solar electric Solar Solar production 0 6 MW 800 kW 1 MW Solar 0:00 4:00 8:00 12:00 16:00 20:00 Solar Solar Time of day 1. Actual SunEdison production data from 200 kW SunEdison solar installation– August 2008 Source: SunEdison team analysis; Illustrative example Sun Edison LLC - confidential & proprietary. Do not redistribute. 9
    • Distributed solar supports more jobs than any other energy source Job Creation Potential of Various Electricity Generation Assets1 35 Solar PV 30 Number of jobs per MW 25 20 15 Wind Geothermal Biomass 10 Coal Natural Nuclear Tidal gas 5 0 1. Includes upstream manufacturing jobs. Sources: New Enterprise Associates, INEEL, BC Sustainable Energy Association, Renewable Energy Policy Project, SunEdison - confidential & proprietary. Do not redistribute. Sun Edison LLC 10
    • Declaring a state open for solar business Typical market signals required: • State incentive structure that encourages private financing • Ability to secure long-term contracts • Market demand (RPS) • Net metering • Interconnection standards • Appropriate tax structure • Zoning/permitting standards • Incentives designed to meet three separate residential, commercial and utility- scale business models • Allow 3rd party developers Sun Edison LLC - confidential & proprietary. Do not redistribute. 11
    • Case study: Duke Energy Davidson County Project, North Carolina Basic project information: • 17 MW Project/ 354 acres • RFP issued 8/2007 • Contract award 5/2008 • Broke ground summer 2009 • Phase 1 (4 MW) completed 12/2009 • Phase 2 – 4 will be complete 12/2010 Sun Edison LLC - confidential & proprietary. Do not redistribute. 12
    • Steps in getting Davidson County built 1. Permitting/legal 2. Engineering 3. Financing 4. Construction & procurement 5. Earthwork 6. Foundations 7. Electrical 8. Interconnection Sun Edison LLC - confidential & proprietary. Do not redistribute. 13
    • Davidson County Lessons Learned • Large projects = long timelines • State tax incentive limits investment, doesn’t encourage it • Anticipate market/legislative changes • Utility/developer/legislative/PUC partnership is critical • Create repeatable template • Maintain tight control over supply chain • Non issues: – Technology – Skilled labor Sun Edison LLC - confidential & proprietary. Do not redistribute. 14
    • Thank you! Questions? Kerinia Cusick kcusick@sunedison.com 443-909-7200 Sun Edison LLC - confidential & proprietary. Do not redistribute. 15