Xcel Energy, electricity utility of Colorado, received a batch of bids whose medians were 2.1¢/kWh and 3.6¢/kWh for wind and solar power plus energy storage, respectively. The pricing was released in the public version of the ‘2017 All Source Solicitation.’
The world’s previous low for solar plus storage was a 4.5¢/kWh project in Arizona.
On August 30th, 2017, an all source solicitation was made by Xcel Energy of Colorado. The bids were received by the company on November 28, 2017. At the time of the report being filed – December 28th, 2017 – the bids were in the initial round of due diligence.
We don’t actually know the individual project bid prices, nor the company names from the report – as on page 11, some individual bids are listed, but with the Bidder Company/Project Name marked out.
On page 10, the below image breaks out the bid groups individually with their ‘Median Bid Price’ as the second to last column. In this column we see 5GW, across 8 wind+storage projects, with a median of 2.1¢/kWh – and 50 projects totaling 10.8GW of solar+storage at 3.6¢/kWh.
This bid was really full of amazing numbers. 17GW of wind power – across 42 projects – with a median bid of 1.81¢/kWh. Now, we might need a reminder on what ‘median’ is defined as – it is the middle point, ignoring weighted averages, of a number set. That means, if the median is 1.81¢/kWh – unless everyone bid exactly the same price of 1.81¢/kWh – someone is bidding to deliver this electricity below 1.81¢/kWh.
Carbon Tracker says, ‘Based on our modelling, the median bid for wind plus storage is lower than the operating cost of all coal plants currently in Colorado, while the median solar plus storage bid is lower than 74% of operating coal capacity.’
According to the EIA, in 2016 either operations or maintenance for ‘fossil steam’ electricity sources were above 5¢/kWh for existing facilities across the USA.
Lazards most recent Levelized Cost of Energy Analysis suggests new coal costs between 6-14.3¢/kWh.
We already know that Solar + batteries are prepping to take over 10GW of the US natural gas peaker power plant market – now we see where the coal market goes to die – and with the Tesla battery racing to save Australia’s grid from coal the plant crash – injecting 7MW in milliseconds – we’re getting to watch it happen in live motion.
Never forget when Jim Robo, NextEra Energy CEO said, “Post-2020, there may never be another peaker built-in the United States — very likely you’ll be just building energy storage instead.”
Two weird sets of bids – wind+solar and wind+solar+energy storage – were also included, also within these amazingly low numbers. Since wind and solar tend to complement each other, that’s a seemingly logical combination from a developer.
The solar+storage industry has seen this price coming. A complex deal in Arizona set a record price of 4.5¢/kWh for electricity from solar+storage. Shortly after that a new company made a brash announcement – Zinc-iron flow battery challenger ViZn proposed a 20 year 4¢/kWh deal.
With New York, Florida, Massachusetts, Oregon, Hawaii, Maryland and – of course – California pushing energy storage hard, you need to understand it’s coming. These factories making batteries for cars are going to love having these additional products to produce energy storage for.
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