Solar Power for Saipan - Incredibly Cost-Effective

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The Northern Mariana Islands are one of several island U.S. territories, lying three-quarters of the way from Hawai'i to the Phillippines. Like most islands, their electricity supply has been almost entirely supplied by diesel-fueled generators, at enormous cost.

So why have islanders in the Marianas – such as the residents of Saipan – been struggling to install solar and other renewable power?

The utility, Commonwealth Utilities Corporation, has raised the same objections of mainland utilities, that technical barriers inhibit the reasonable uptake of variable renewable energy. But the cooperative utility serving Kaua'i island in Hawai'i is forecasting that 50% of its daytime electric demand will be met with solar by the end of next year. And California utilities are finding solutions to many of the purported technical barriers.

The economics are ironclad: switching from imported diesel to domestic clean energy would save a bundle. The following presentation explains.

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Solar Power for Saipan - Incredibly Cost-Effective

  1. 1. S O L A R F O R S A I PA N A N I N C R E D I B LY C O S T- E F F E C T I V E E N E R G Y P O L I C Y John Farrell Director of Democratic Energy May 20, 2014
  2. 2. COSTLY IMPORTED POWER
  3. 3. Fuel cost: $60 million per year (2010) $1100 per person per year Commonwealth of the Northern Mariana Islands Initial Technical Assessment Report, NREL 2011
  4. 4. C O S T O F E L E C T R I C I T Y ( P E R K I L O WAT T- H O U R ) $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 Residential Commercial $0.33 $0.26 Diesel L O W E S T I M AT E Source: CUC rates
  5. 5. S O L A R S AV I N G S
  6. 6. C O S T O F E L E C T R I C I T Y ( P E R K I L O WAT T- H O U R ) $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 Residential Commercial Solar $4/W $0.33 $0.26 C O S T O F E L E C T R I C I T Y ( P E R K I L O WAT T- H O U R ) $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 Residential Commercial $0.19 L O W E S T I M AT E Customers save at least $0.07 to $0.14 per kWh with solar
  7. 7. C O S T O F E L E C T R I C I T Y ( P E R K I L O WAT T- H O U R ) $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 CUC diesel cost $0.30 The utility saves $0.30 for every kWh avoided with solar KEMA Renewable Energy Integration Study, 2013
  8. 8. For every customer that installs 5 kW of solar… Saves $1,600 per year Saves $350 per year Net metering @ $0.26 per kWh
  9. 9. For every customer that installs 500 kW of solar… Saves $195,000 per year Breaks even Feed-In Tariff@ $0.30 per kWh
  10. 10. N O R E A S O N T O WA I T
  11. 11. KEMA Renewable Energy Integration Study, 2013 U T I L I T Y ( C U C ) C O S T S AV I N G S F R O M S O L A R + W I N DMilliondollars $0 $3 $6 $9 $12 % of peak energy use from solar 20% 40% 69% $11.9 million $6.8 million $3.3 million
  12. 12. 2 0 % R E N E WA B L E E N E R G Y Solar 19% Wind 1% Diesel 80% Technology Capacity Solar + Wind 7,000 kW Energy Storage 3,400 kW Annual Balance Renewables Cost -$2.1 million Fuel + Operations Cost Savings $2.8 million Net Benefit $0.7 million See final slide for assumptions
  13. 13. 4 0 % R E N E WA B L E E N E R G Y Solar 38% Wind 2% Diesel 60% Technology Capacity Solar + Wind 14,000 kW Energy Storage 6,800 kW Annual Balance Renewables Cost -$4.2 million Fuel + Operations Cost Savings $5.6 million Net Benefit $1.4 million See final slide for assumptions
  14. 14. Technology Capacity Solar + Wind 24,150 kW Energy Storage 11,700 kW 6 9 % R E N E WA B L E E N E R G Y Solar 66% Wind 4% Diesel 31% Annual Balance Renewables Cost -$7.3 million Fuel + Operations Cost Savings $9.7 million Net Benefit $2.4 million See final slide for assumptions
  15. 15. N O T T H E F I R S T
  16. 16. Energy Storage: The Next Charge for Distributed Energy (2014, ILSR) K A U A’ I C O O P E R AT I V E E L E C T R I C I T Y, % R E N E WA B L E 0% 10% 20% 30% 40% 50% 2006 2013 2015
  17. 17. S O L A R S E R V I N G H A L F O F D AY T I M E D E M A N D ( 2 0 1 5 ) Other 50% Solar 50% Energy Storage: The Next Charge for Distributed Energy (2014, ILSR)
  18. 18. K I U C E N E R G Y M I X Energy Storage: The Next Charge for Distributed Energy (2014, ILSR) 2 0 1 3 Non-renewable 85% 3% Utility solar 3%Hydro 9% 2 0 1 3 & U N D E R D E V E L O P M E N T Biomass 12% Non-renewable 58% Customer sola 6% Utility solar 14% Hydro 9% Customer solar
  19. 19. 6 MW of battery storage installed at substations Energy Storage: The Next Charge for Distributed Energy (2014, ILSR)
  20. 20. S U R M O U N TA B L E B A R R I E R S
  21. 21. S U R M O U N TA B L E B A R R I E R S
  22. 22. ≤ ? 1. A Limit on Local Power Generation! Utilities always want local power generation to be less than local minimum electricity demand so that electricity will not flow out of neighborhoods and back onto the grid.* ! ! 2. A Guesstimate of Minimum Demand! Whoops! Utilities assume minimum demand is about 30% of peak demand, because they don’t measure minimum demand. ! ! 3. An Arbitrary Safety Margin! Utilities take this 30% threshold and divide by 2 to get a 15% cap on local solar. ! ! ! *Also addressed with 2-way electrical equipment How Local Solar Gets Capped 15% Peak use “Minimum”(30%) ÷2 Percent of peak power allowed from local solar Default cap of ÷2
  23. 23. ! 1. A Daytime Minimum! How much solar power is produced at 4 AM? None. But that’s the time of day utilities used for their minimum demand calculation. ! Hawaii solar advocates negotiated a change: to estimate minimum demand when the sun is up (Sundays at noon). ! Even though utilities maintain the arbitrary “division by 2” safety margin, this change could allow nearly twice as much local solar on the grid. How States Can Raise the Cap (Hawaii) “Daytime min.” ÷2 ~25% Hawaii’s Update (2011) Hawaii estimates the minimum demand during daytime. Cap is raised to Percent of peak power allowed from local solar
  24. 24. Daytime minimum ~50%Cap is raised to Percent of peak power allowed from local solar ÷ California’s Update (2012) Measured daytime demand No “division by 2” How States Can Raise the Cap (California) ! 1. A Measured Daytime Minimum! Utilities must actually measure the minimum demand on a power line between 9 AM and 4 PM and no longer use peak demand as a proxy. ! 2. No “Division by 2”! Utilities can’t arbitrarily divide the cap by 2, now that the power line capacity is actually measured. ! The result could nearly triple the original 15% cap on local solar power. 2
  25. 25. S O U R C E S • Renewable Energy Integration Study (KEMA, 2013): http://cl.ly/0c0e0E0E0G05 • Northern Mariana Islands Quick Facts (EIA, 2014): http://1.usa.gov/1giOmLV • Commonwealth of the Northern Mariana Islands Initial Technical Assessment Report: http://cl.ly/0D1r370i3t3y • Energy Storage: The Next Charge for Distributed Energy (ILSR, 2014): http:// bit.ly/1sPXFTV jfarrell@ilsr.org
  26. 26. C O S T A N A LY S I S A S S U M P T I O N S • Installed costs • Solar: $3200/kW; Wind: $4000/kW • Storage: $480/kW + $565/kWh • Finance terms: 6% interest over 20 years • Installed capacity • Solar = 95% of total nameplate capacity • Storage • kW = 50% of solar nameplate + 20% of wind nameplate • kWh = time to allow diesel plant to ramp @ 30 kW per second • Avoided energy costs: $0.30/kWh Most assumptions from KEMA Renewable Energy Integration Study, 2013; those in blue from ILSR

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