Xcel reports record low prices for solar plus storage

While the price of utility-scale solar keeps falling, often eclipsing even the low price of natural gas, adding energy storage has usually made PV much more expensive. However, the results of a solicitation by Public Service Company of Colorado (PSCo, Xcel’s subsidiary in the state) show PV plus battery storage falling to a range wherein it can also compete with conventional generation.

According to documents from PSCo’s 2017 request for proposals (RFP) leaked on Twitter, the company is reporting a median price for solar PV projects at $29.50 per megawatt-hour (MWh). This is roughly comparable to 2016 contract prices for utility-scale solar projects that are meeting California utility’s obligations under the state’s renewable portfolio standard.

But the real shocker is a median price of $36/MWh for 59 solar PV plus battery storage projects totaling 10.8 GW. GTM Research Senior Advisor Shayle Kann notes that this is the lowest price for solar plus storage that he has seen to date, much lower than the $45/MWh for PV + storage projects seen in Arizona.

Wind prices were even lower, with wind projects coming in at $18.10/MWh, and wind plus storage at $21/MWh.

These projects are a response to an all-source solicitation which PSCo published in August 2017. This coincided with the company’s filing of an energy plan that involved shutting down two units at the Comanche Generating Station in Pueblo, Colorado and replacing them with 700 MW of solar and 1 GW of wind.

However, these numbers are preliminary and procurement volumes are still subject to approval by state regulators, so PSCo is unable to say how much solar and wind will actually get built at this time.

The company will have no shortage of projects to choose from, as the 13.4 GW of solar and 10.8 GW of solar plus storage projects being offered well exceed 700 MW. We will know more when Xcel issues its report to Colorado regulators on the RFP in late April, towards a final decision on July 26.