Devil in the details of Rhode Island’s 400 MW renewable energy RFP

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As she goes into what may be a challenging race for re-election, Rhode Island Governor Gina Raimondo is touting the successes of her first term. And as far as renewable energy goes, she has a lot to be proud of. Not only did Rhode Island build the nation’s first offshore wind farm, but it is has also given birth to full-scale wind and solar markets.

As calculated by pv magazine using U.S. Department of Energy data, the output of solar facilities in Rhode Island grew more than three-fold from the first half of 2016 to the first half of 2018, and wind output more than 14-fold.

Raimondo has set an even more aggressive goal for the state to reach 1 GW of renewable energy by 2020. As a major step to reaching this goal, last week utility National Grid issued a state-ordered request for proposals (RFP) for 400 MW of renewable energy.

However, the details of this RFP show a request that may be very difficult for developers to fulfill, for several reasons. The document requires that pricing for the contracts awarded must be “below the forecasted market price of energy and RECs over the term of the proposed contract”.

pv magazine’s internal estimates indicate that this would be $100 per megawatt-hour or less. While New England has less sun and much higher costs – including labor costs – than other regions, this could still be a workable price for large-scale solar.

However, the contracts will only be 10 to 15 years in length, meaning that developers will potentially be stuck with projects for which they have to sell the electricity on a merchant basis after the contract ends. For solar, the merchant market has been dicey at best, with merchant-only solar projects in Chile and Texas going underwater.

But the biggest problem may be the sheer scale demanded. The RFP is limited to projects at least 20 MW in capacity. The state’s largest operational solar project is only 4.7 MW, and there is only one under construction larger than 20 MW in the entire state. Not to say that larger projects have not been proposed, but Rhode Island has seen fierce battles over the use of farms and the clear-cutting of forest for large-scale solar, resulting in highly restrictive planning and zoning decisions in many parts of the state.

And while Governor Raimondo’s 1 GW by 2020 goal was always a long shot, the details of this latest RFP may put it entirely out of reach.