Two Kentucky utilities – Louisville Gas and Electric Company and Kentucky Utilities Company – which generate 80% of their electricity from coal and 19% from natural gas (that’s 99% fossil fuels in total), have requested approval to build a 100 MWac solar power plant.
The Hardin County powerplant would be ten times larger than the state’s largest running facility, and would be more than double (probably triple) the state’s total installed capacity of ~45 MW. It would be the largest signed deal for the state, eclipsing last year’s signing of an 86 MWac project, the largest in Kentucky known to pv magazine USA.
The Public Service Commission of Kentucky has 64 days to consider the package of documents, with a final ruling coming no later than March 31, 2020.
The deal has an extra layer or two as can be seen in the above image. First, the two utilities directly contracted with the solar power developer, ibV Energy Partners, to purchase the electricity from Rhudes Creek Solar LLC for 20 years. The electricity will then be split up between Toyota, Dow and the customers of each utility. Toyota and Dow are both Kentucky Utility customers, and will take 50% and 25% respectively. The remaining 25% will be 9.75% sent to Louisville Gas and Electric Company, with 15.25% to Kentucky Utilities Company end-users.
The utility said that the contract is for a flat price per kilowatt-hour over its life, with the plant expecting to be commercially available by 2022.
Among the documents included in the filing, starting on page 68, is a large table of bids, costs, and systems sizes from the 16 companies that submitted 71 proposals – although it’s heavily redacted. In other filings, the energy companies requested and were given permission to redact all information that might harm the two companies in future negotiations.
Energy storage was considered, even though it wasn’t requested. However, it was too expensive – specifically noting the capacity costs in the filings:
As a point of comparison, the companies’ combustion turbines at the Brown Station have a levelized “stay-open” fixed cost of $0.96/kW-month, which equates to an annual capacity cost of between $1.4 and $1.5 million. These combustion turbines each provide more than six-times the capacity of the proposed battery and the ability to provide energy for a longer duration.
SEIA currently ranks the state of Kentucky 44th in solar volume in the U.S. with 44.89 MW deployed. SEIA projects 321 MW of new capacity over the next five years.
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Interesting, even in coal country solar PV is beginning to insert itself into the grid. I found it funny, about 3 years ago, the Kentucky coal mining museum installed solar PV to power the buildings to reduce electricity costs and overhead costs to keep the museum running.
“Energy storage was considered, even though it wasn’t requested. However, it was too expensive – specifically noting the capacity costs in the filings:”
One always has to wonder what “metrics” were used to determine “too expensive”. Energy storage in and of itself has been proven by the so called “big battery” installed by TESLA across the Neoen wind farm in Australia in 2017. This asset is said to have cost $63 million USD to construct and has generated stacked grid service revenues of $50 million in two years of operations. Where and how one uses the energy storage means as much as how big and at what cost. In an industry that is used to amortization periods of 30 to 40 years, they will have to figure out assets that are more efficient and can amortize in 10 years or less. I’m thinking the electric utility industry is unable to see, just how energy storage can become a low cost “spinning demand” or “spinning reserve” power plant with (stored potential) instead of burning fuel 24/7 just in case the grid demands require more generation resources online. There’s got to be several plants burning fuel without selling a product right now that could be replaced with a large energy storage facility that could use non-fueled generation during the day and shift the “spinning” operation to night when the grid demand increases. A solar PV plant doesn’t have to be (just) for generating power during the day time.
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