It is hard to over-state the significance of Virginia’s Grid Transformation & Security Act of 2018. Among other things, the act which was signed into law in March deemed the deployment of 5 GW of wind and solar to be in the interest of the Commonwealth, and today the state’s largest utility took a big step towards making the first tranche of that a reality.
In line with the recommendations in the state’s 2018 Energy Plan, Dominion Virginia Power has issued a request for proposals (RFP) for 500 MW-AC of wind and/or solar projects which will need to come online by the end of 2020.
The plants can either be sold to Dominion, or the power sold under 20-year contracts. The utility will buy all the energy, capacity and environmental projects of winning projects, which must be at least 5 MW-AC in capacity. The RFP will not accept aggregations of smaller projects.
Dominion states that it prefers projects in its service area, but will also take projects in other service areas as long as they are in the state of Virginia.
Project bids and confidentiality agreements must be submitted by November 2nd, with final proposals for projects by December 13 and power contracts by March 14. Bids will be evaluated on both price and non-price criteria, which will include both economic benefit to the state of Virginia as well as the financial condition and experience of the developer and the risk inherent in the project.
This RFP represents a big move for Virginia, which has been only a mid-sized solar market to date. However these projects along with the 500 MW Pleinmont Solar project which is planned for Spotsylvania County promise to push Virginia into the big leagues.
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I think this is a very positive development and I hope it exerts appropriate pressure on the state of Maryland, which, up to these very recent developments had the bragging rights to solar between the two states. However, let’s keep this in perspective: at the end of 2017, according to the Solar Energy Industry Association, Maryland ranked 14th in the nation in solar power, with 83,000 residences deploying it, and increasing utility size installations, but the percentage of in state power generation from solar was only 2.9%.
Virginia, from the same set of data at the end of 2017, ranked 20th with 29, 423 homes but only .4% of state power coming from solar. California was 1st, with 5.2 million homes and 15.1% solar power and Hawii was up there too, with 201,000 homes and 10.1% of its power from solar.
Now lets take a closer look at some of the details of the proposed sPower 500 MW project in Spotsylvania County, VA. I’ve been researching it for three weeks now, and have a grasp, I hope of the overall dynamics. However, the details of the sale and purchase of these MW’s leaves me with some questions. And here they are:
The powerful corporate entities – Microsoft, Apple, Acamai, Swiss Re…Etsy and the Univ. of Richmond, who gets the smallest slice at 20 MW, have been signing PPA’s: in some descriptions, the contracts are called “contracts of difference, virtual PPA’s, fixed and floating swaps (on the price of the electricty). However, this doesn’t clear up the basics.
sPower is going to sell the 500MW they generate into the wholesale PJM market – exactly where and which of the several markets is privy info. At the same time, the journalistic accounts of these entities signing additional contracts for the power under whatever type of PPA do not make clear whether there is any steady cost to the purchasers, because as best as I can determine, they’re all still going to be paying a full electric bill issued by Dominion. It seems unlikely they are paying full price twice, once to the BigD and again to sPower. They will get exclamation rights – we’re buying locally generated solar – to be sure, and that’s an important symbolic measure for Microsoft, part of their long term strategic plan. But surely they’re not paying full price twice, right? Well, maybe someone can illuminate this for me further.
I’ve asked the basic citizen question: isn’t sPower selling the same power twice, their solar 500 MW’s: once to the PJM wholesale market, and again to this individual customers, who still receive a power bill from Dominion. I’m assured this couldn’t possible be the case, but so far the accounts I’ve read don’t clear it up very well. Some speak of a steady predictable price for power with sPower, as if Dominion is not part of the equation.
Have I reached the point where corporate privacy trumps public understanding?
No, they are not buying the same power twice. That’s not how a PPA works; however the details are complicated. The simple version is that there is an off-taker, and then there are sales into PJM, and a party who pays the difference between the node and PPA price.
I wrote about this in greater detail for pv magazine’s June print edition, but unfortunately that article is behind a paywall.
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